DIODES INC /DEL/ Q4 FY2024 earnings call

• Gary Yu noted that the fourth quarter revenue showed 5% growth over Q4 2023, with improving momentum in Asia, especially China and Southeast Asia, despite challenging global demand in Europe and North America. Diodes maintained a 42% automotive and industrial mix in product revenue. - Brett Whitmire discussed fourth quarter and fiscal 2024 financial results, including revenue, gross profit, operating expenses, net income, cash flow, balance sheet, and the acquisition of Fort Media. - Emily Yang provided details on end market performances, such as industrial still undergoing inventory correction, automotive focusing on content expansion, compute seeing strong growth in AI server applications, and new product introductions (e.g., 755 new part numbers in 2024, 330 for automotive).

The end markets for Diodes Inc. in the fourth quarter of 2024 had the following revenue contributions: Industrial was 23% of product revenue, Automotive was 19%, Compute was 25%, Consumer was 18%, and Communication was 15% of product revenue. The automotive and industrial revenue combined totaled 42% of total product revenue. In terms of financial performance, revenue for the fourth quarter of 2024 was $339.3 million, full year 2024 revenue was $1.3 billion. Gross profit for the fourth quarter was $110.9 million (32.7% of revenue), full year GAAP gross profit was $435.9 million (33.2% of revenue).

• For the first quarter of 2025, revenue is expected to be approximately $323 million, plus or minus 3%, representing a 4.8% sequential decrease. - GAAP gross margin is expected to be 32.5% plus or minus 1%. - Non-GAAP operating expenses are expected to be approximately 30% of revenue, plus or minus 1%. - Net interest income is expected to be approximately $1.5 million. - Income tax rate is expected to be 18.5% plus or minus 3%.

• The company's forward-looking statements are subject to risks and uncertainties, as actual results may differ from discussions. - Global demand environment remains challenging, especially in Europe and North America. - Inventory adjustments in automotive and industrial end markets may persist.

Q: David Williams asked about seasonality, especially in China and its impact on automotive and industrial demand.

A: Emily Yang responded that Chinese New Year was within expectation, with some customers having extended shutdowns but overall within expectations, and the first quarter guidance of 4.8% down is slightly better than usual seasonality.

Q: William Stein inquired about operating leverage.

A: Brett Whitmire stated that there are no structural additions to OpEx, and there will be good operating leverage as revenue recovers, with expectations of leverage in margin as products are sourced inside the company versus outside.

Q: David Williams asked about pricing trends.

A: Emily Yang said pricing is stable, within a 1.5% to 2% bill in per quarter range, and the company is strategically defocusing from commodity areas. Gary Yu added that the company is emphasizing product portfolio enhancement with new products enjoying better ASP and GP percent.

Q: William Stein asked about Q1 end market performance.

A: Emily Yang said automotive would be challenging due to inventory rebalancing and weaker demand, industrial would have ongoing inventory rebalancing likely through Q2, compute would be slightly down due to Chinese New Year impact, consumer and communication would also be down, with enterprise traditional networking in communication showing some inventory rebalancing improvement but smart being challenged.