Himax(US:HIMX)2026-02-12 14:02Financial Data and Key Metrics Changes - Fourth quarter revenue was $203.1 million, a sequential increase of 2.0% quarter-over-quarter, with gross margin at 30.4%, consistent with guidance [4][5] - Full year 2025 revenue totaled $832.2 million, a decline of 8.2% compared to 2024, with net profit at $43.9 million, down from $79.8 million in 2024 [11][14] - Operating profit for Q4 was $6.8 million, representing an operating margin of 3.4%, compared to -0.3% in the previous quarter [10] Business Line Data and Key Metrics Changes - 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, while automotive driver sales increased approximately 10% quarter-over-quarter [6][7] - Non-driver sales reached $42.3 million, a 7.9% increase from the previous quarter, with T-CON business accounting for over 10% of total sales [8] Market Data and Key Metrics Changes - Automotive driver sales showed resilience, growing single-digit year-over-year despite softness in global automotive markets [6] - The small and medium-sized display driver IC segment accounted for 68.5% of total sales for the quarter, down from 70.8% in the previous quarter [7] - The automotive display IC business is expected to remain strong, with a 40% market share in automotive DDIC and over half in the global TDDI market [20][33] Company Strategy and Development Direction - The company is focusing on expanding into ultra-low power AI for endpoint devices and smart glasses, leveraging advancements in AI technology [21][25] - Himax aims to complete mass production readiness for CPO technologies in 2026, with significant revenue contributions expected starting in 2027 [28][57] - The automotive market is seen as a significant growth area, driven by innovations in smart cabins and advanced display technologies [21][33] Management's Comments on Operating Environment and Future Outlook - The management noted ongoing macroeconomic uncertainties and price increases in memory affecting market sentiment [19] - The first quarter of 2026 is expected to be the trough of the year, with sales anticipated to rebound in the second quarter [19] - Management expressed optimism about long-term growth in the automotive display IC business, supported by a strong design win pipeline [20] Other Important Information - Operating expenses for Q4 were $54.9 million, a decrease of 9.6% from the previous quarter, attributed to reduced annual bonuses [9] - The company had $286.2 million in cash and cash equivalents as of December 31, 2025, an increase from the previous year [14] - Capital expenditure for 2025 was $20.1 million, up from $13.1 million in 2024, primarily for R&D-related equipment [17] 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, with meaningful contributions expected starting in 2027 as they finalize product validation [52][54] Question: What is the expected contribution of OLED sales in 2026? - Management noted that OLED sales are expected to contribute less than 10% of total sales in 2026, with a significant ramp-up anticipated in 2027 [60][61]