Diodes Q2 Earnings Call Highlights

Diodes reported strong second-quarter growth: Revenue rose 22% year over year to $445.5 million, while adjusted EPS more than doubled to $0.70. Gross margin improved to 33.1%, supported by cost and operating initiatives. Management expects acceleration in the third quarter: Revenue is forecast at approximately $510 million, representing 30% year-over-year growth at the midpoint, with a projected 35% GAAP gross margin and adjusted EPS of $1.05. Automotive, computing and AI infrastructure are driving demand: Computing revenue increased 33% year over year and automotive revenue rose more than 37%, while the proposed Elevate Semiconductor acquisition is expected to add higher-margin products and about $15 million in first-year revenue. Diodes NASDAQ: DIOD reported second-quarter revenue growth of 22% from a year earlier and issued third-quarter guidance that calls for continued expansion in sales, gross margin and adjusted earnings, citing demand across automotive, industrial and AI-related applications. Revenue for the quarter ended June 30 was $445.5 million, up from $366.2 million in the same period of 2025 and 10% above $405.5 million in the first quarter. President and CEO Gary Yu said the result marked the company’s sixth consecutive quarter of double-digit year-over-year revenue growth and was supported by growth in every geographic region as well as record global point-of-sale activity. Get Diodes alerts: Sign Up Yu said Diodes’ automotive revenue reached a record 21% of product revenue during the quarter. He attributed the performance to expanding semiconductor content and market-share gains in automotive, industrial and AI-server applications. Profitability Improved as Revenue Expanded Second-quarter gross profit was $147.6 million, representing a gross margin of 33.1%, compared with 31.5% a year earlier and 31.8% in the prior quarter. Yu said cost and operating initiatives implemented during the market slowdown contributed to a 160-basis-point year-over-year improvement in gross margin. GAAP net income was $46.6 million, or $1.00 per diluted share, compared with $46.1 million, or $0.99 per diluted share, in the prior-year quarter. The GAAP result included approximately $20 million in unrealized gains on investments, according to CFO Brett Whitmire. On a non-GAAP basis, adjusted net income was $32.5 million, or $0.70 per diluted share, compared with $15 million, or $0.32 per diluted share, a year ago and $19.8 million, or $0.43 per diluted share, in the first quarter. Adjusted results excluded, net of tax, investment gains, acquisition-related intangible amortization, board and officer retirement expenses, and acquisition-related costs. Cash flow from operations totaled $68.5 million, while free cash flow was $34.8 million after $33.6 million in capital expenditures. The company had approximately $442 million in cash equivalents, restricted cash and short-term investments at quarter-end, against approximately $40 million of total debt. Inventory days declined to approximately 152 from 157 in the first quarter. Finished-goods inventory days fell to 51 from 55. Whitmire said inventory dollars increased by $11.8 million to $504.6 million to support customer requirements, anticipated growth and longer manufacturing lead times. Third-Quarter Outlook Calls for Further Growth For the third quarter, Diodes expects revenue of approximately $510 million, plus or minus 3%. At the midpoint, that would represent a 30% year-over-year increase and a 14% sequential increase. The company forecast GAAP gross margin of 35%, plus or minus 1%, and non-GAAP adjusted earnings per share of $1.05, plus or minus $0.10. Yu said the...