Magnachip Semiconductor (MX) Q1 2026 earnings summary

Executive summary

• Q1 2026 consolidated revenue reached $46.2 million, up 3.3% year-over-year and 13.9% sequentially, exceeding typical seasonality and at the midpoint of guidance, aided by a one-time sales incentive program to reduce channel inventory.

• Gross profit margin was 15.6%, up from 9.3% sequentially but down from 20.9% year-over-year, mainly due to unfavorable product mix and ASP erosion in China.

• The company is executing a multi-year transformation focused on product competitiveness, new product launches, and profitable growth, with 55 new generation products launched in 2025 and another 55 targeted for 2026.

• Operating loss from continuing operations was $7.2 million, improved from $12.4 million in Q4 2025 but worse than $5.3 million in Q1 2025; adjusted operating loss was $6.5 million.

• Adjusted EBITDA was negative $3.6 million, better than negative $8.9 million in Q4 2025 but worse than negative $1.2 million in Q1 2025.

Financial highlights

• Power Analog Solutions revenue was $41.6 million, up 4.5% year-over-year and 13.1% sequentially; Power IC revenue was $4.6 million, down 6.2% year-over-year but up 21.3% sequentially.

• Gross profit was $7.2 million, up from $3.8 million in Q4 2025 but down from $9.4 million in Q1 2025.

• SG&A expenses were $7.7 million, down from $9.2 million year-over-year; R&D expenses increased to $6.7 million, reflecting accelerated investment in new product development.

• Cash and cash equivalents at quarter-end were $94.6 million, down from $103.8 million at year-end 2025, mainly due to $3.9 million in CapEx and operating cash outflows.

• Total borrowings were $42.3 million, with $26.4 million reclassified as short-term due to March 2027 maturity.

Outlook and guidance

• Q2 2026 revenue is expected between $44.5 million and $48.5 million, roughly flat sequentially and down 2.3% year-over-year at the midpoint.

• Gross profit margin guidance for Q2 is 17%-19%, higher than Q1 but below Q2 2025.

• Gross margins are expected to decline in Q3 and Q4 2026 due to a planned electrical substation upgrade impacting factory utilization.

• New generation products are expected to comprise 10% of total revenue in Q4 2026, up from 2% in 2025.