eMemory Technology (3529) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was NT$911.7 million, up 13.6% year-over-year but down 9.8% sequentially, with net income at NT$461.7 million, up 7.2% year-over-year but down 10.3% sequentially.

• Operating margin improved to 57.3%, up 4.9 percentage points year-over-year.

• Royalty revenue comprised 73.7% of total, up 16.9% year-over-year, while licensing revenue made up 26.3%, up 5.2% year-over-year.

• PUF-based security IPs saw a 542.2% year-over-year royalty increase, though still less than 1% of total revenue.

• Continued leadership in embedded non-volatile memory IP, with over 67 million wafers shipped and 1,270+ patents issued.

Financial highlights

• Operating income for Q1 2025 was NT$522.3 million, up 24.2% year-over-year but down 7.7% sequentially.

• EPS for the quarter was NT$6.18, up 7.1% year-over-year.

• Operating expenses were NT$389 million, down 12.5% sequentially and up 1.9% year-over-year.

• 12-inch wafers contributed 57.5% of royalty revenue, up 17.5% year-over-year.

• Net cash from operating activities was NT$578.5 million, with cash and cash equivalents at NT$3,788 million as of March 31, 2024.

Outlook and guidance

• Licensing revenue is expected to maintain strong growth momentum, driven by demand from foundries and NCHIP customers.

• Royalty revenue projected to continue growing as advanced process nodes enter production and market share increases in mature applications.

• New IP technologies, including post-quantum cryptography (PQC) modules, are being developed to support quantum migration.

• Strategic partnerships with TSMC and Intel to drive innovation in chiplet security and Security as a Service platforms.

• Licensing revenue in April and May already shows an uptick, with expectations for sustained growth through the year.