Realtek Semiconductor (2379) investor relations material

Executive summary

• Q1 2026 revenue reached TWD 36.4 billion, up 38.6% sequentially and 4.0% year-over-year, surpassing expectations due to strong end market demand and restocking after Q4 inventory control.

• Net income for Q1 2026 was TWD 4.33 billion, a 9.1% decrease year-over-year but a 63.1% increase sequentially.

• EPS for Q1 2026 was TWD 8.44, down TWD 0.84 year-over-year but up TWD 3.27 from the previous quarter.

• Inventory turnover days improved to 105 from 127 in Q4, reflecting robust restocking and customer preparations amid supply chain uncertainties.

Financial highlights

• Gross margin for Q1 2026 was 49.7%, up 1.6 percentage points from Q4 but down 1.9 points year-over-year.

• Operating profit was TWD 4.33 billion (11.9% of revenue), with operating margin up 3 points from Q4.

• Operating expenses were TWD 13.8 billion (37.8% of revenue), up 4.6% year-over-year and 33.5% sequentially, with OPEX ratio down 1.4 points from Q4.

• Non-GAAP income was TWD 646 million, stable quarter-over-quarter but down 8.0% year-over-year.

Outlook and guidance

• Q2 outlook supported by stable demand and continued restocking, with customers anticipating price hikes and supply uncertainties.

• Gross margin faces pressure from rising DRAM and manufacturing costs, with further price increases expected in Q2 2026.

• OPEX ratio expected to remain steady, balancing R&D investment with operational discipline.

• Visibility into H2 2026 remains limited; network connectivity products expected to outperform, while consumer-driven sectors may normalize.

• Sequential improvements in revenue and profitability indicate a positive trend heading into the next quarter.