Compal Electronics (2324) Q4 2025 earnings summary

Executive summary

• 2025 revenue declined 17% year-over-year to TWD 757.5 billion, with Q4 revenue at TWD 190.9 billion, up 2% sequentially, driven by PC, server, and 5G product growth.

• Net profit for 2025 was TWD 6.03 billion (EPS 1.38), down from TWD 10.04 billion (EPS 2.30) in 2024; Q4 net profit was TWD 1.4 billion.

• Gross margin improved to 5.6% in 2025 from 5.0% in 2024, despite lower sales.

• Board approved a TWD 1.1 per share cash dividend for 2025, representing an 80% payout ratio, the highest in recent years.

• Transformation efforts focused on AI, automation, digitalization, and sustainability, with significant R&D investment and ESG recognitions.

Financial highlights

• Q4 2025 revenue was TWD 190.9 billion, up 2% sequentially but down 17% year-over-year; PC units shipped were 6.8 million.

• Q4 gross margin improved to 5.8% quarter-over-quarter; operating margin for 2025 was 1.4%, down from 1.6% in 2024.

• Q4 non-operating losses of TWD 213 million, mainly from equity method affiliates and mark-to-market adjustments.

• Full-year non-operating losses included TWD 1 billion in FX losses from NT/USD fluctuations.

• Cash and equivalents at year-end were TWD 83.3 billion (19% of total assets); cash conversion cycle improved to 50 days.

Outlook and guidance

• Q1 2026 PC units expected to decline 15%-20% due to seasonality, memory shortages, and rising component prices.

• Server sales projected to more than double quarter-over-quarter in Q1 2026; server revenue to exceed 10% of 2026 sales, with AI servers driving growth.

• Non-PC revenue targeted to reach 40% of total in 2026 (up from 29% in 2025); focus on sustainable computing and expanding non-PC business.

• Smart device business expected to deliver double-digit sequential growth in Q1 2026.

• Commercial PC segment expected to outperform consumer, with AI PC penetration rising to 60% in 2026.