Novatek Microelectronics (3034) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached NT$27.12 billion, up 11% year-over-year and 7% sequentially, at the high end of guidance.

• Net income for Q1 2025 was NT$5.26 billion, up 9.6% from Q4 and 7.6% year-over-year.

• EPS for Q1 2025 was NT$8.65, up from NT$8.04 in Q1 2024 and NT$7.89 in Q4 2024.

• Gross margin for Q1 2025 was 39.8%, up 25 bps sequentially, though down from 41.1% in Q1 2024.

• The company remains focused on integrated circuit design for flat panel displays and related products.

Financial highlights

• Operating income for Q1 2025 was NT$5.7 billion, up 16% quarter-over-quarter and 10.7% year-over-year.

• Operating margin reached 21% in Q1 2025, up 154 bps sequentially and stable year-over-year.

• Cash and cash equivalents at Q1 end were NT$53.23 billion, up from NT$48.77 billion at year-end 2024.

• Inventory at Q1 end was NT$9.6 billion, up 10.3% sequentially and 5.4% year-over-year.

• Operating cash flow for Q1 2025 was NT$5.33 billion, with free cash flow at NT$5.15 billion.

Outlook and guidance

• Q2 2025 revenue guidance: NT$26.5–27.7 billion (US$828–866 million), similar to Q1.

• Q2 gross margin guidance: 37%–40%.

• Q2 operating margin guidance: 18.5%–21.5%.

• Q2 demand: TV, tablet, and monitor up quarter-over-quarter; notebook flat to down; mobile phones flat to up; automotive flat.

• Inventory dollars expected to increase in Q2 but remain healthy.