Novatek Microelectronics (3034) Q2 2025 earnings summary

Executive summary

• Q2 2025 consolidated sales reached NT$26.2 billion, up 3.65% year over year but down 4% quarter over quarter, driven by OLED driver IC growth.

• Q2 2025 net income was NT$3.74 billion, down 29% quarter over quarter and 30.61% year over year, impacted by lower operating profit, FX loss, and higher tax rate.

• First half 2025 revenue was NT$53.3 billion, up 7.28% year over year; net income for the first half was NT$9.0 billion, down 12.44% year over year due to FX loss and margin compression.

• Consolidated financials for H1 2025 were reviewed with a qualified conclusion due to certain subsidiaries' statements not being independently reviewed.

• The group operates mainly in flat panel display and IC design, with all operations aggregated into a single segment.

Financial highlights

• Q2 2025 gross margin was 36.3%, down from 41.1% year over year and 3.5 percentage points quarter over quarter, mainly due to FX and material costs.

• Q2 2025 operating income was NT$4.8 billion, down 15% quarter over quarter and 12.38% year over year.

• Q2 2025 EPS was NT$6.14, down from NT$8.86 year over year and NT$2.5 quarter over quarter.

• July 2025 revenue was NT$8.1 billion, down 12% year over year and 4% month over month.

• Cash and equivalents as of June 30, 2025 were NT$54.7 billion, up NT$1.5 billion sequentially.

Outlook and guidance

• Q3 2025 revenue guidance: NT$23.7–24.7 billion at an exchange rate of 1:29.5.

• Q3 gross margin guidance: 34%–37%; operating margin: 15%–18%.

• Q3 revenue for all product lines expected to decrease quarter over quarter, with small-medium driver ICs seeing a milder decline.

• Q4 revenue and margin trends will depend on U.S. tariffs, NT$ exchange rate, and China promotional demand.

• New IFRS standards adopted in 2025 had no material impact; further standards for 2026+ are under evaluation.