eMemory Technology (3529) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached NT$911.7 million, up 13.6% year-over-year but down 9.8% sequentially, with strong royalty growth and continued investment in PQC security IP and hardware security modules.

• Net income was NT$461.7 million, a 7.2% increase year-over-year, but a 10.3% decrease sequentially; EPS was NT$6.18.

• Royalty revenue comprised 73.7% of total revenue, with licensing at 26.3%.

• The company is advancing PQC migration with the launch of a NeoPUF-based HSM edge server and expanding Security as a Service platforms.

• Leadership in embedded non-volatile memory IP continues, 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; operating margin rose to 57.3%.

• Gross margin remained strong at 57% for Q1 2025, up from 52% in Q1 2023.

• Royalty revenue grew 16.9% year-over-year, while licensing revenue increased 5.2%.

• 12-inch wafers contributed 57.5% of royalty revenue, up 17.5% year-over-year; 8-inch wafer royalties rose 16.1%.

• Net cash from operating activities was NT$578.5 million, up from NT$439.7 million in Q1 2023.

Outlook and guidance

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

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

• PQC modules and a full suite of security solutions are under development to address the upcoming decade of quantum migration.

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

• The company is evaluating the impact of new IFRS standards effective in 2026 and 2027, with no immediate material effect expected.