DIOD - Earnings call transcript Q4 2024

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Operator

Good afternoon, and welcome to Diodes Inc. Fourth Quarter and Fiscal 2024 Financial Results Conference Call. [Operator Instructions].

As a reminder, this conference call is being recorded today, Tuesday, February 11, 2025. I would now like to turn the call over to Leanne Sievers of Shelton Group Investor Relations. ahead. go please Leanne,

Leanne Sievers

welcome Conference Fourth President Call. Investor Group, and XXXX of and Financial Diode's firm. Results I'm Relations to afternoon, Quarter Diodes Fiscal Shelton Good Leanne Sievers,

Yu, us Chief Vice Joining of and of and Sales Emily Worldwide Diodes Dhaliwal. Investor are President, Relations, President Financial Brett Gurmeet Whitmire; today Officer, Senior Yang; Director Marketing, Gary

closing quarterly subject that are preliminary I'd by today to company independent like accounting announced the to registered customary the firm. remind results procedures finalizing the company's its our review they are and listeners public as

subject As Form such, these to year results revision its for the are ended its unaudited files XX, XXXX. and company fiscal December until XX-K

may management's statements in contain forward-looking statements prepared to response which to addition, your risks remarks additional and make questions. forward-looking subject In management are and uncertainties,

Therefore, of protection the harbor Litigation statements that the Private Actual contained to those and for XXXX. and Exchange risks Reform company's and from results forward-looking Securities we safe the today, Securities company therefore, in in with including differ discussed filings a refer Form uncertainties the the is Act more and XX-Q. of and claims XX-K Commission, of the the discussion detailed you may

extent company's the may or to may as Diodes performance assumes by future market conditions In update law. the required as the projections applicable as no these February not XX, addition, any except to represent estimates obligation today, management's future of XXXX. projections to in change,

as conference and release during reconciliations Included in provide of Additionally, and Also, the GAAP of net throughout terms. GAAP in measures stockholders company's attributable to company's information the the conference press and GAAP press refer during this call will company's details. release management release certain are include additional we common discussions statements income press net and non-GAAP income. and management to which non-GAAP definitions to the statements call, financial items,

recording a this Yu. website www.diodes.com. call via go for the ahead. at please listen Investor will XX entire And webcast call the turn For Gary days Diodes' time, you to I'll to unable of of President, in Gary, the be Diodes' now those at available section to over Relations

Gary Yu

Welcome, everyone, call. and conference on us for today's you thank joining

revenue following the over above past as the the few Southeast Asia improving achieved have Our Asia in especially America. growth fourth X% and in quarter over of we global the market return fourth North XXXX, results the momentum in Even the the demand slowdown. Europe makes growth and to especially reflect the marketing seasonal gradually which challenging, remains quarter We a improved, overall though region. seen China year-over-year multiyear quarters environment

content Based the to on and applications. entered and mix to solid Asia year available, a XXXX. are sheet, than expanding markets for new a able XXXX. on maintain XXXX current initiatives. channel automotive product in with focus of expect which made dial committed percentage total data and our a on testament having a and inventory be industrial in opportunities have level POS a at our Improved product our new to and year new the industrial revenue. we progress of We XX% Diodes strong is on expansion target especially market, capitalizing combined balance for automotive growth we AI-related stronger in

develop to process our In further addition manufacturing and efforts and to our past costs technology lower capabilities.

minimize are improves. internal demand costs facilities more to underloading running in and near-term We products until are qualifying our

our quality remaining further improve consistently automotive focus audit the products investments Our and the analog With remains markets of and in prioritizing industrial our our portfolio. model. target auto mix the contribution industrial to with above from our on and revenue and

recovery expansion margin XXXX in and markets and growth broadened for positioned across beyond. end well are as We market our

fiscal to as XXXX Brett let quarter turn that, well now our XXXX quarter guidance as call over more and financial in me discuss detail. results fourth the With to first our

Brett Whitmire

Gross $X.X or to million of prior was and fourth billion $XXX.X and for XXXX profit quarter Thanks, the Full $XXX.X in Revenue compared year quarter XXXX of quarter. was compared prior revenue XX.X% billion revenue XXXX. $XXX in fourth the XXXX the afternoon, good revenue the fourth $XXX.X of in or of revenue for XXXX. everyone. XX.X% Gary, of or million million compared was to quarter to year million $X.X the $XXX.X in quarter quarter million in and $XXX.X million the third XX.X%

revenue For and or was or million fourth $XXX.X of non-GAAP million the operating of quarter of of acquisition-related for the full were $X.X excludes for profit million for in manufacturing a gross million facility. million XX.X% revenue, on year, costs $X.X XX.X% and restructuring expenses intangible or million expenses, charge $XX GAAP recovery $X XX.X% acquisition-related amortization revenue. were GAAP $XX.X insurance which asset basis, a

from in or revenue. GAAP million $XX.X operating the This consisting interest XXXX or million and quarter to of revenue. for quarter the in income of foreign taxes compared of other compares million and prior of fourth to interest before of Total in operating of million in $XX.X $XX.X Income $XX.X the the XX.X% of the million million XX.X% million and $XX.X to the noncontrolling quarter, was XXXX of the other expenses revenue and quarter million quarter year million interest of expenses unrealized income, XX.X% $X.X Non-GAAP currency $X.X previous in quarter. loss, quarter amounted fourth $X.X or $XX.X $X.X prior in million prior were losses of approximately expense. in $X.X investments in income million

taxes. income to Turning

$X.XX quarter full fourth net or XXXX diluted noncash diluted share shares in compared EPS the effective share excluded quarter was per GAAP used $X.X $X.XX approximately fourth GAAP for to XX.X per recovery. or quarter. income which the for share prior share per $X.XX $XX to Non-GAAP the in $XX.X million fourth tax net $XXX.X intangible assets investment $X.X XXXX, and the adjusted and value insurance diluted $X.XX was adjustment The XX.X% million or XXXX. last was million was diluted quarter acquisition-related share net year tax net $XX.X Full diluted was was and mark-to-market for million diluted the per approximately per year for or $X.X million the income acquisition-related full quarter compute to $XX.X for and million share charges, tax, million of rate of Our year per income or million both fourth The share $X.XX count costs compared quarter million $X.XX million million XX.X%. income $X.X amortization in GAAP the of rate or of diluted Restructuring $X.X year.

XXXX. $X.XX This prior or or diluted compares $XX.X million in diluted fourth million the $X.XX the per to share quarter $XX.X of per quarter in share and

non-GAAP share For per the $XX million share in income adjusted or $XXX.X per full was diluted diluted $X.XX as XXXX. compared year, net or $X.XX million to

fourth have share. expense million for the increased both net per earnings EPS by of compensation $X.XX and share-based tax, noncash $X.X GAAP diluted Excluding share quarter, per adjusted of would non-GAAP

year, share $X.XX of For expense $XX compensation $XX.X the excluding per tax, million, improved and respectively, share-based have diluted non-GAAP GAAP noncash earnings by $X.XX, net non-GAAP and would respectively. full of and and million

in revenue compared of the or of was and fourth in revenue the XX.X% the XX% to $XX.X prior or quarter for or revenue million quarter quarter million EBITDA of $XX.X XXXX. XX.X% fourth

million million XX.X% XX.X% or $XXX.X was of EBITDA $XXX.X year, compared in to full or revenue XXXX. of revenue the For

and million, a our included quarter operations GAAP earnings million reconciliation which non-GAAP fourth have net details. $XX.X for additional in expenditures. for full net for million Cash GAAP net income which was by Cash adjusted EBITDA, $XX.X We of flow the income was $XXX.X capital year. $XX.X to release flow income to and provides included provided million

the And for $X.X human Net flow $X.X $X.X net flow global million, of flow and full $XX enhance net consideration to to Fort for paydown high-quality which includes a a communications. paydown $X.X of the negative debt. was million includes voice was human for including of $XX.X develops total And the that operates cash million products in the $XX million free of which was semiconductor debt Media year, which well company, total negative a full and million cash acquisition of as million cash net solutions year, net for as Asia machine of total CapEx. million the

Diodes and processing company's targeted the enhance in primarily advanced expand footprint markets. to Media technologies, voice portfolio Fort compute our product at acquired automotive and

the total million. term was fourth cash, of balance restricted end short-term cash investments quarter, long to and $XXX Working Turning plus sheet. million term $XXX approximately capital was $XX At million. short debt, including approximately cash equivalents, our totaled approximately in

terms inventory, were XXX inventory last approximately as quarter. inventory end XX quarter, goods to quarter. In total of the last days XX% days of Finished compared were XXX to fourth compared at

of consisted basis X% finished a Capital increase cash $XXX the a in from million raw revenue. $X.X $XX.X revenue process low end X% Total decreased a the in dollars fourth million million prior revenue our or work quarter for goods. million inventory for full X.X% on were and at inventory to $X.X million. year, the in the range quarter the of in were X.X% to increase $XX of or of both which quarter targeted $X.X million materials, decrease million in of and of expenditures Total $XX.X

Now turning to our outlook.

to slightly we than a plus first million, decrease better Chinese holiday, Year revenue at to X.X% typical minus representing expect the XXXX, X%, sequential be but quarter due $XXX and midpoint For of seasonality. or approximately the New

which X% represents year-over-year growth plus minus be to of assets, of of extends X%. in margin adjusted our XX% GAAP growth expected plus for or our approximately is guidance of support operating minus amortization expenses, gross in and midpoint operating revenue, or X%. the expected expectation XX.X% We XXXX. Importantly, expenses acquisition-related momentum of are intangible Non-GAAP to GAAP are be

approximately interest $X.X We million. to expect income net be

million. expected the is in to as amortization turn for after that used previous With be or quarter tax is to EPS to acquisitions. of non income to first Emily $X.X X%. XX.X%, And included shares approximately calculate tax the Not call for Yang. now over I Our be $XX.X estimates million plus are these said, rate minus anticipated

Emily Yang

and Brett, in typical Revenue seasonality. our quarter the was fourth above Thank better and than afternoon. you, of good midpoint the guidance. slightly

the Asia we global over quarter, period of especially dollars news good Our growth the the channel terms POS same second strong, where in of in was and half in is inventory double-digit I the our both XXXX. XXXX for but year lower in decreased also saw the will was note, weeks. POS

the global Looking fourth quarter. the sales at in

Asia Europe, North represented and of XX%; America, X%. revenue; XX%

and XX% Diodes Compute, product terms industrial XX%; our product XX%; Consumer, XX%; revenue, revenue. of markets, automotive, In of end communication, XX% of was

as Our even automotive been above both and Maintaining the of is product same industrial though revenue design combined contact quarter. last ongoing our target the totaled revenue model product initiatives, expansion our reflects our XX% mix which has win continue adjustments. successful customers Diodes the and and undergo market over our these increase years. on of to technology inventory focus of development several component demand past of and content product key A existing

content In where part for approximately we of specifically market, introduced increased $XXX with car year over addressable new XXX XX% have we numbers this from $XXX. our XXXX per past to alone, XXX this automotive

market. in automotive me at product review inventory greater let Starting though We the continues Now and the quarter. maintained with even the the details. rebalancing throughout end market XX% the revenue

adjustments to We expect demand slower and into persist quarter. inventory the first

be content continues share gain to and auto market the on Our as Diodes to the market for expansion position recovers. growth focus

mentioned targeted driving, key product during year. new comfort products high number compliance and I Diodes connected As earlier, style are focus of areas These safety automotive a applications. introduced of our electrification at the

our creation, demand C small and we're real USB In seeing active strong for and applications. terms income cross the for boxes PCI and switches, momentum Type smart Express entertainment sea of copy re-drivers adoption packet product

and auto LDO in infotainment seeing ADAS, product received demand charging solid products design display wireless for and family SBR wins our applications. applications Our

quarter strong also We driving power for from growth products in applications. switching DC/DC experienced the connected our

across power seeing including Additionally, junction TVS product, bipolar power, are growth SBR multiple auto transistors our and applications. discrete MOS demand

the and control have in applications. up as lighting while traction as applications to gained the been multiple ultimo our driver harness, our LED rare used interior demand around high-voltage and in beam [ as new controllers being well electric designs which such drivers high, ramping also tail LED see business Also world. our low customers We across strong hose in various LED steering continued is front automotive, lighting. driver in gate ], for door lift

similar inventory In automotive end the industrial continues the correction market, market. to

Despite expect we to in design-in-design-win We quarter. continue make second the the may our demand last this progress softness, initiatives. into

seeing design are control while couplers industrial fans Our high-voltage DC switches motor seeing has traction openers and LDOs for applications, and photo window sands our in tools. wins are equipment, and power e-meter, motor

power. programmable as being design server supply mall control power rectifier larger into are as had units wins protection backup the designed our for devices battery Additionally, units. well in A multiple switch bridge

We designing X in motor and real also as as activities storage silicon supply new saw power carbide applications. SBD Tier electric energy several well

the applications, including switches computing the switches, and conditioners ultra continue market, packet strong loiter see AI server to and we in signal data center oscillators USB PCI crystal In XXXG growth modules. momentum optical and X.X and Express

interface, clocks cards in high-speed oscillators Nick the Our serial for GPU and [ system crystal expressed logic and are ] adopted being reference PCI Card clocks.

in AI for addressable approximately traditional the to box, per box last Our today content which $XX server is compared servers. year per $XX

compact computing and received across MOSFET controllers, ideal diode path our as control for various input the we ordering power switches well demand power Also as solid market, in and sequencing applications our applications. power for

they gaming are helped and capacity again also our with next-generation SSD software as Additionally, being controllers customers supported SSC bus console their the customers. gaming and double our storage protect received enterprise solutions redesign have piracy for switches portable well for consoles of

ins are in has protection and for the our notebook docking repeaters standard MPD communication products seeing two seeing repeaters are X and for gaining production Diodes CPE our also CPUs the and SBR and Lastly, we in XG the and design X high-bandwidth are become the bipolar in cameras modules. of new in communication designs shocking and interface the SoC smartphones. communication solid demand driving Also our to notebook products are market, winning market, mobile and for are applications. in shock LDOs our our new In where and momentum re-drivers transistors for processors the station USB XG eUSB channels achieve junction demand our devices continue traction.

momentum power in strong applications. ACDCPWM for controllers saw and product USB charging also [indiscernible] We smartphone

in battery SBD Lastly, in designs and in pad chip-scale delivery new charger the our package SBR consumer are market, securing products and power applications.

application. our are into rectifiers home gaming the being Additionally, applications, designed buck in bridge smart are our IoT adopted while converters high-voltage being

bipolar also care We personal have wins devices. in new for transistors products junction design

in In first following growth the slowdown. fourth achieve the summary, pleased we're to year-over-year of quarter multiyear market quarter the

Although we especially markets. have recovery, market across automotive seen yet a industrial not the broad

focus to the floor new drive recover. We as on initiatives executing content on and demand continue we our open market to the product increasing With creation global Operator? now to that, opportunities questions.

Operator

with Benchmark. today question come from And Instructions]. [Operator will David first your Williams

David Williams

Congratulations growth here. on the return

Emily Yang

David. you, Thank

David Williams

to to to speak it that's than kind of Emily, maybe you expected seasonality how that Chinese segments? what be both you're any the in the of the trends would you seeing China, down talking just be demand automotive maybe I could a around Year? industrial, taking bit China little maybe that the New further in some and there? helpful, think. color Are you're and you other And expecting Or as relates to

Emily Yang

Yes.

Chinese expectation. New first is So think I within all, Year, our abnormal. of much anything think, didn't I pretty see We

some are customers. there think with the I but shutdown, customers not extended all

actually I expectation. within it's think overall, our

-- for year employees QX, strong overall QX seasonality would together, we New and quarter than the New actually all impact, us down market, slightly everything because expectation. Chinese is the guided Year actually our Year we within better included usual actually and was our new never actually X.X% a I Chinese is for all, of in I say, which think return

David Williams

of than stronger on What a Great. improvement margin, on there? And I I nice seeing sequentially sequential you just then gross the margin, are the maybe, gross I little the appreciate there anticipated. have Brad, bump guess, feels that. given certainly the would kind

Emily Yang

Yes.

usually point I revenue margin. of goes gross the gross view, with margin think So the hand-in-hand and from

more overall. product really initiative improvement try So do is I the we to on really think what

new continue focus introducing products. We on to

talked just And in new We numbers As an I XXXX. XXX of is it. about than part more released than I XXX more out that, actually example, part. think automotive

and actually So overall. new and to commitment you product content continue see of expand market driving expansion our can the technology available the new

So focus, right? that to continue will be the

margin So improvement. drive a the really things couple that of

improvement product product on improvement is one initiative. So the mix

side is actually underloading The the situation. other on

right, time, to we're the takes as that our Gary continue alternative, fab some to continue mentioned, slowly, the actually Unfortunately, but own results. the like we to additional see products going minimize internal of right? So into impact,

say So profit actually guidance. gross probably margin better the that's reason expected margin I you're -- seeing the overall based would your on than

David Williams

to there how through process? or threshold there about Is the magnitude a just way Okay. this about you that Is gross way a a are over to point? at think far happening that's porting maybe to margin the think

Emily Yang

need quarter-by-quarter only ongoing the the be will not that process, we I qualify think technology, think devices. I right? the to effort,

qualify We therefore. the also onto with device work need to customers to that

of to say to improve would is that over going I be believe take actually probably we with ongoing year. continue and better process, strongly But number other XXXX it's it's a quarters to time. believe So an going

also the that's some the same So revenue of the driving time, at loading. of some to going drive

So we're within quarters XXXX. actually overall, see that to confident the pretty going you're improvements throughout

Operator

And William your next will today Stein question with Truist Securities. from come

William Stein

First, in I'm might revenue markets to QX. how the each us some hoping in to as perform of expect you clues give you end

Emily Yang

Okay. All right.

So automotive, especially and coupled overall, with weaker inventory the right, still Europe demand territory. going through from rebalancing

think QX going we be quarter So is overall. to challenging a

the the the see, try you think the the with As actually focus. that QX market focused mean, It's we can continue even the to overall share will to revenue content overall. I be maintain product XX% gain expansion I and of on challenging,

So rebalancing. over inventory we're industrial ongoing market, still seeing

the are others, customer situation some better, are Some everything not so than definitely worse equal.

Asia. the slightly we market will Chinese probably also quarter. all, see of New manufacturing, linger be in it QX, compute segment in that Year to a we continue Because second But that through down. expect And all probably is for lot

well never quarter to first expect a will quarter. don't consumer be as impacted consumer overall. communication. strong a in was the growth be quarter We as that So the And

networking. the the to traditional actually the that actually first challenged us side, I going seeing be give of is enterprise the some inventory quarter. probably improving rebalancing on overall, so the but communications think of some We're smart might upside, the in on

I quarter. would still down all all, So to say, going a in be it's

whole a guided So so down the conclusion, quarter. we right, for as X.X%

Gary Yu

better the seasonality first still that's But quarter.

Emily Yang

Yes.

William Stein

Okay.

Let X Compared of revenue quarters down about me your XXXX ask leverage. is but operating the ago, XX%. years December to

going to is but fixed level, only your is there's assuming your assume in should XX%, OpEx. as But cost way up? operating similar the that don't think down you way get revenue have make be the or we recovers, Or means positive which it costs might even OpEx down? as leverage significant grow we that to -- back less sort if exact we Your the I as you significant fine. on -- severe on of less the there's it was added that leverage make

Brett Whitmire

will And what that brought is years. had We 'XX instruments we things picked have, window. from we've added couple or 'XX. no we've across done 'XX overall across saw I -- that years, we up 'XX there's the of would last to say that then and the last number of and then new down that you that the basically spend across OpEx [indiscernible] real TIC the factory structural

what you'll there's is see as I forward. think to we a good go leverage that

lot I that will. think get we a of

footprint. see is versus pulling sourcing the now start get about of inside outside in products as some our of as that that company margin, that out. to infrastructure, talked we versus manufacturing don't growth, actually which going fourth We've the terms I But think coming see those -- is kind start expect inside back to think strongly scale of of that get start the to not was grow, then leverage There's going of as coming up. and the feel you're not you're the some only benefit of then obviously, I plateau back growth. down, revenues down the percentage And -- we is revenue a in leverage what those of we year-over-year we quarter that good. back I to

down that to growth, our expectation. the further out we'll continue side continue don't across guiding That's what through is you'll year. the of come we're our We and fully. OpEx guide the see kind quarters. to expect And we quarter, that efficiently, First that's but that's year-over-year on

Operator

today follow-up. from Benchmark come Your Williams David next a with will question of

David Williams

bit trends, And I from forgive to see? dropped seeing me does Or maybe out. there? I what perspective? you you would if pricing greater Have line come to just you're a ask that it, my typically seem seen missed erosion pricing than down on But wanted a

Emily Yang

Yes, David.

is our about pricing We talked the remember, think per think stable. -- X.X% bill in I within I still to quarter. range. pretty X% that

say defocusing. more the strategically We commodity overall a from have wouldn't and area area. competition also price So commodity That's we lot. the the been changed I environment see

I stable. would actually all all, say so And it's in

Gary Yu

the of And on products new but percent a another of emphasize we to kind thing product important enjoy ASP that of is on better our limited on probably enhancement a lot portfolio the different new than lot not much we're those can automotive going only we introduced market. segments also to that a kind GP products, for introduced

So it in some markets. loss like we can balance commodity

David Williams

one And I one, -- one Great. Okay. may. then just last if

this the year really nice growth seen AI some On box. you've per side,

As for trader mentioned, just is available? of by portfolio? that what's that product you? that driven kind it certain Or is the Or within driving really market you opportunity your sockets more

Emily Yang

I AI overall supporting portfolio. some think the or the product products newer expanding surfer So are combined right? of surfer We're the all we having it's of our applications.

of server Express with really required, switch We PCIe that's the we and Express additional application with portfolio certain actually additional PCI AI there packet requirement application support with also see is this this PCI chipset kind well of port have suited the ports. very

different quite combination of I say would So of things. a a number

volume overall course, beneficial it's growth. to Of overall the and market, the our change all

Operator

session. I our like Yu concludes That Gary any to to over closing would for the conference turn question-and-answer remarks. back

Gary Yu

forward progress look Operator, may conference next now disconnect. quarter's call. reporting you We on call. today's on to participating for everyone, you, Thank our

Operator

today's concluded. The attending now has presentation. conference Thank for you

your lines. You may now disconnect

Diodes (DIOD) 11 Feb 252024 Q4 Earnings call transcript