Himax(US:HIMX)2026-02-12 14:00Financial Performance - Q4 2025 revenue was $203.1 million, a sequential increase of 2.0% quarter-over-quarter, with a gross margin of 30.4%, consistent with guidance [4][5] - Full year 2025 revenue totaled $832.2 million, a decline of 8.2% compared to 2024, with operating income of $44.1 million or 5.3% of sales [11][13] - Q4 profit per diluted ADS was $0.036, at the high end of the guidance range of $0.02-$0.04 [5] Business Segment Performance - Revenue from large display driver IC was $21.7 million, a sequential increase, accounting for 10.7% of total revenue [5] - Small and medium-sized display driver revenue was $139.1 million, reflecting a slight decline of 1.3% sequentially, with automotive driver sales increasing approximately 10% quarter-over-quarter [6] - Non-driver sales reached $42.3 million, a 7.9% increase from the previous quarter, driven by increased ASP consumption [7][8] Market Performance - Automotive driver sales showed resilience, growing single-digit year-over-year despite global market softness [6] - The automotive display IC business is expected to remain strong, with Himax commanding a 40% market share in automotive DDIC and over half in D-TDDI [19][32] - The company anticipates growth in non-driver IC businesses, particularly T-Con and WiseEye, providing incremental support [18] Company Strategy and Industry Competition - Himax is focusing on advanced display technologies and expanding into ultra-low power AI for endpoint devices, smart glasses, and AR applications [20][24] - The company is strategically investing in non-display IC areas with long-term growth potential, expecting meaningful contributions starting in 2027 [11][19] - Himax is collaborating with leading panel makers to enhance its competitive position in the automotive OLED market [64][66] Management Commentary on Operating Environment and Future Outlook - The management noted ongoing macroeconomic uncertainties and price increases in memory affecting market sentiment [18] - The first quarter of 2026 is expected to be the trough of the year, with sales rebounding in the second quarter [18] - Management expressed optimism about long-term growth in the automotive display IC business, supported by strong design win pipelines and technological advancements [19] Other Important Information - Operating expenses for Q4 were $54.9 million, a decrease of 9.6% from the previous quarter, but an increase of 11.6% year-over-year [9] - The company had $286.2 million in cash and cash equivalents as of December 31, 2025, compared to $224.6 million a year ago [14] Q&A Session Summary Question: What is the outlook for gross margin in Q1? - Management indicated that gross margin is expected to be flat to slightly down due to product mix changes and ongoing material cost pressures [47][48] Question: Can you provide guidance on CPO revenue for 2026 and 2027? - Management stated that revenue contribution from CPO will be limited in 2026 due to validation processes, with potential meaningful contributions starting in 2027 [52][54] Question: What is the expected contribution of OLED sales in 2026? - Management expects OLED sales to contribute less than 10% of total sales in 2026, with a significant ramp-up anticipated in 2027 [61][66]