eMemory Technology (3529) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached NT$1,097 million, up 0.2% sequentially and 17.1% year-over-year, with operating margin at 60.7% and net income at NT$580 million, up 44.9% year-over-year.

• Security IP evolved from foundational OTP and PUF to integrated system-level security subsystems, now critical for AI server and data center applications.

• Royalty revenue comprised 60.8% of Q2 revenue, while licensing contributed 39.2%.

• Logic Flash technology collaboration with foundries is accelerating, aiming to replace legacy flash and drive long-term revenue growth.

• Gross margin remained at 100%, with net margin at 54.3% and ROE at 63.3%.

Financial highlights

• H1 2026 revenue totaled NT$2,190.6 million, up 18.5% year-over-year; net income for H1 was NT$1,176.04 million, up 36.5% year-over-year.

• Operating income for Q2 2026 was NT$666 million, up 0.6% sequentially and 22% year-over-year.

• EPS for Q2 2026 was NT$7.77, up 45% year-over-year.

• Licensing revenue grew 12.8% sequentially and 35.1% year-over-year; royalty revenue declined 6.4% sequentially but increased 7.8% year-over-year.

• ROE for Q2 2026 was 63.3%, up 7.7 percentage points year-over-year.

Outlook and guidance

• Licensing momentum expected to remain strong, driven by demand across advanced and legacy nodes, security, and next-gen Flash.

• Royalty revenue growth anticipated to accelerate in H2 2026, supported by higher ASPs from advanced nodes and new applications.

• Continued development of advanced-node OTP and PUF-based security for 2nm and sub-2nm nodes, and expansion into next-generation 1T Flash and security platforms for chiplets, data centers, and post-quantum security.

• Advanced node projects already account for over 50% of licensing NRE; royalty mix from advanced nodes expected to rise as mass production ramps.

• 1T Flash may enter mass production next year, with NOR Flash as initial focus and potential future expansion to NAND.