eMemory Technology (3529) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue reached TWD 937 million, up 2.7% sequentially and 4.9% year-over-year, with operating margin rising to 58.3% and gross margin at 100%.

• Licensing revenue surged 32.4% sequentially, while royalty revenue declined 7.9% sequentially but grew 4.3% year-over-year; royalty comprised 66% of total revenue.

• Over 110 PUF-related tables accumulated, with initial royalty contributions from mass production and expectations for rapid growth in security IP.

• Major operational reform underway to enhance efficiency and sustainability, with R&D headcount increased and non-R&D reduced.

• Operating income grew 4.5% sequentially and 10.2% year-over-year, while net income declined 13.4% sequentially but rose 15.7% year-over-year.

Financial highlights

• Q2 net income was TWD 400 million, down 13.4% sequentially and 15.8% year-over-year due to FX losses.

• EPS for Q2 was TWD 5.36.

• First half 2025 total revenue grew 9% year-over-year to TWD 1,848 million, with licensing up 5.7% and royalty up 10.5%.

• NeoFuse contributed 39.4% of Q2 licensing revenue, up 25.5% year-over-year; Path-based security IP licensing up 176.3% sequentially.

• Operating income for H1 2025 was TWD 1,068 million, up 17% year-over-year.

Outlook and guidance

• Licensing revenue expected to maintain growth momentum due to strong demand from foundries and fabless customers.

• Royalty revenue projected to accelerate as more PUF-related products enter mass production.

• New post-quantum cryptography IP fully developed and certified, with integration into customer designs underway.

• Advanced node solutions qualified on TSMC N3P, with ongoing development for 2nm and automotive applications.

• The group is assessing the impact of new IFRS standards effective from 2026 and is preparing for compliance.