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01/11 03:19
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed outlook: strong financial metrics with YoY growth in revenue and profit, but weak guidance with expected revenue decline. Positive factors include a high cash dividend and share repurchases. However, concerns about customer demand uncertainty, automotive market risks, and competitive pressures in OLED dampen optimism. The Q&A section reveals management's reluctance to provide guidance, adding to uncertainties. Overall, these factors suggest a neutral stock price movement over the next two weeks, with no clear positive or negative catalysts dominating the sentiment.
Revenue $215.1 million, a decrease of 9.3% sequentially but a 3.7% increase year-over-year. The year-over-year increase was attributed to strong demand in certain segments despite seasonal slowdowns.
Gross Margin 30.5%, flat from last quarter and up from 29.3% in the same period last year. The year-over-year increase was driven by product mix and continued cost optimization.
Profit per diluted ADS 11.4 cents, exceeding the guidance range of 9 to 11 cents, primarily due to lower operating expenses.
Revenue from large display drivers $25.0 million, flat from last quarter, driven by demand spurred by Chinese government subsidies.
Revenue from small and medium-sized display driver segment $150.5 million, reflecting a sequential decline of 9.8% amid a typical low season.
Non-driver sales $39.6 million, a 12.8% decrease from the previous quarter, primarily due to the absence of a one-time ASIC Tcon shipment.
Operating Expenses $45.7 million, a decrease of 7.0% from the previous quarter and a decline of 9.8% from a year ago, due to strict budget and expense controls.
Operating Income $19.8 million, or 9.2% of sales, compared to 9.7% of sales last quarter and 4.8% of sales for the same period last year. The year-over-year increase was due to higher sales, improved gross margins, and lower operating expenses.
After-tax Profit $20.0 million, or 11.4 cents per diluted ADS, compared to $24.6 million last quarter and up from $12.5 million a year ago.
Cash and Cash Equivalents $281 million as of March 31, 2025, compared to $277.4 million at the same time last year and $224.6 million a quarter ago.
Operating Cash Flow $56 million for the first quarter, indicating strong cash generation.
Inventories $129.9 million, lower than $158.7 million last quarter and $201.9 million same period last year, reflecting a steady decline over ten consecutive quarters.
Accounts Receivable $217.5 million, down from $236.8 million last quarter but slightly up from $212.3 million a year ago.
Capital Expenditures $5.2 million, compared to $3.2 million last quarter and $2.7 million a year ago, mainly for R&D related equipment.
Annual Cash Dividend 37.0 cents per ADS, totaling $64.5 million, with a payout ratio of 81.1% of the previous year's profit.
New Product Launches: Himax debuted its ultra-luminous, miniature Dual-Edge Front-lit LCoS microdisplay, targeting up to 350,000 nits brightness and 1 lumen output at just 250mW maximum total power consumption.
WiseEye AI Technology: WiseEye AI technology is expanding into various applications, including notebooks, smart door locks, and smart retail, with mass production slated for later this year.
Automotive OLED Technology: Himax is expanding its OLED portfolio into the automotive market, with mass production of advanced OLED on-cell touch-control technology expected to begin later this year.
Market Expansion: Himax established a strategic alliance with Powerchip and Tata Electronics to explore the Indian market, aligning with the 'Make in India' strategy.
Automotive Market Positioning: Himax holds a 40% share in DDIC and over 50% in TDDI, reinforcing its leadership in the automotive display market.
Operational Efficiencies: Himax achieved a gross margin of 30.5%, driven by product mix and cost optimization, while operating expenses decreased by 7.0% from the previous quarter.
Inventory Management: Himax's inventory levels have declined for ten consecutive quarters, reflecting conservative management amid macroeconomic uncertainty.
Strategic Shifts: Himax is diversifying its supply chain presence in Taiwan, China, Korea, and Singapore to mitigate geopolitical risks and enhance production flexibility.
Focus on AI and AR Technologies: Himax is committed to ultralow power AI, AR glasses, and co-packaged optics, with ongoing collaborations to expand business opportunities.
Currency Risk: The recent abrupt appreciation of the NT dollar against the US dollar has limited impact on Himax’s Q2 financial results, as most revenues and costs are US dollar denominated, providing a natural hedge.
Tariff Measures: US tariff measures have intensified global trade tensions, creating volatility in capital markets and uncertainty in market demand. While tariffs have not significantly impacted Himax directly, they have led to cautious customer behavior and deferred orders.
Macroeconomic Challenges: Ongoing macroeconomic challenges are impairing visibility across the ecosystem, prompting Himax to manage inventory conservatively and enforce strict budget controls.
Supply Chain Risks: Himax is deepening its supply chain in Taiwan and strengthening its presence in other regions to mitigate geopolitical risks and ensure production flexibility amid tariff-driven supply chain restructuring.
Customer Demand Uncertainty: Customers are adopting a make-to-order model and keeping inventories lean, reflecting a cautious stance towards the global economic outlook and end market demand.
Automotive Market Risks: The automotive driver IC sales are expected to decline mid-teens sequentially due to tariffs and the waning effect of China’s automotive subsidy program.
Competitive Pressures: Himax faces competitive pressures in the automotive OLED market, where strategic alliances with leading panel makers are crucial for maintaining market share.
Automotive Business: Himax’s automotive business, comprising DDIC, TDDI, Tcon, and OLED IC sales, remained the largest revenue contributor in Q1 2025, representing more than 50% of total sales.
WiseEye AI Technology: WiseEye AI technology is positioned to scale rapidly across the broader AIoT market and emerge as a key growth driver for Himax in the years ahead.
Strategic Alliance: Himax established a three-party strategic alliance with Powerchip and Tata Electronics to create a powerful ecosystem, aligning with India's 'Make in India' strategy.
CPO Technology: Himax is advancing its technology roadmap in silicon photonics packaging, critical for co-packaged optics (CPO) technology, to meet escalating bandwidth requirements driven by AI and HPC applications.
Q2 2025 Revenue Guidance: Himax expects second quarter revenues to decrease 5.0% to increase 30% sequentially.
Q2 2025 Gross Margin Guidance: Gross margin is expected to be around 31% depending on the product mix.
Q2 2025 Profit Guidance: Profit attributable to shareholders is estimated to be in the range of 8.5 cents to 11.5 cents per fully diluted ADS.
Capex: First quarter capital expenditures were $5.2 million, mainly for R&D related equipment.
Annual Cash Dividend: Himax announced an annual cash dividend of 37.0 cents per ADS, totaling $64.5 million, payable on July 11, 2025, with a payout ratio of 81.1% of the previous year's profit.
Share Repurchase Program: Himax will continue to focus on maintaining a healthy balance sheet while driving sustainable long-term growth to deliver value for its shareholders through high dividends and share repurchases.
The earnings call reveals several negative aspects: a sequential revenue decrease, increased operating expenses, and a significant drop in after-tax profit. Although there are some positive long-term prospects, such as automotive OLED growth and AI business, the immediate financial metrics are weak. The Q&A section highlights cautious EPS guidance due to tax adjustments and high R&D expenses, along with vague timelines for revenue from new technologies. The overall sentiment leans negative, reflecting near-term challenges despite potential future growth.
The earnings call presents mixed signals: while the company reported better-than-expected revenue and gross margin, smartphone and tablet IC sales declined, and operating income fell. The strategic alliance and strong automotive business are positives, but the projected Q3 loss due to employee bonuses and management's lack of clarity on CPO mass production timing are concerns. The annual dividend payment is a positive, but the overall sentiment is balanced by uncertainties, resulting in a neutral outlook.
The earnings call showed mixed results: a sequential revenue decline but year-over-year growth, stable gross margins, and profit exceeding guidance. The share buyback program is positive, but reliance on Chinese subsidies and competitive pressures pose risks. The Q&A highlighted management's caution about macroeconomic uncertainties and lack of specific guidance, which could temper investor enthusiasm. Overall, the sentiment is neutral due to these balanced positives and negatives.
The earnings call presents a mixed outlook: strong financial metrics with YoY growth in revenue and profit, but weak guidance with expected revenue decline. Positive factors include a high cash dividend and share repurchases. However, concerns about customer demand uncertainty, automotive market risks, and competitive pressures in OLED dampen optimism. The Q&A section reveals management's reluctance to provide guidance, adding to uncertainties. Overall, these factors suggest a neutral stock price movement over the next two weeks, with no clear positive or negative catalysts dominating the sentiment.
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