Silicon Motion Technology (SIMO) investor relations material

Executive summary

• Achieved record Q2 2026 revenue of $451 million, up 32% sequentially and 127% year-over-year, with gross margin above 50% and robust profitability across all product lines.

• Growth driven by strong performance in embedded eMMC/UFS, Ferri for automotive and enterprise boot drives, and initial ramp of MonTitan enterprise SSD products.

• Transformation underway from a NAND flash controller maker to a diversified supplier spanning AI infrastructure, edge, and enterprise markets.

• Ferri and enterprise boot drive solutions now represent nearly 30% of total revenue, up from 4% a year ago, with sales surging 110%-115% sequentially and 1,690%-1,695% year-over-year.

• Significant product launches and ramp-ups in SSD, eMMC/UFS, and enterprise/datacenter controllers contributed to performance.

Financial highlights

• Q2 2026 revenue: $451 million, exceeding guidance ($393M-$411M); third consecutive quarter of record revenue.

• Gross margin: 50.2% (GAAP and non-GAAP), up from 47.1% in Q1 2026 and above guided range.

• Operating margin: 23.1% (non-GAAP), 22.4% (GAAP), both up sequentially and above guidance.

• Non-GAAP net income: $83.1 million ($2.43 per ADS); GAAP net income: $136.1 million ($3.99 per ADS).

• Cash and equivalents: $181.8 million at quarter end, down from $210.9 million due to dividends and inventory build.

Outlook and guidance

• Q3 2026 revenue expected to grow 15%-20% sequentially to $519M-$541M, representing 114%-124% year-over-year growth.

• Gross margin expected to rise to 50%-51% in Q3, with operating margin projected at 27.5%-28.5%.

• 2026 revenue expected to more than double year-over-year, with operating margins targeted to exceed 30% exiting the year.

• Management anticipates continued strong top-line growth and record annual revenue, supported by new enterprise/AI infrastructure products.