Novatek Microelectronics (3034) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue was NT$24.57 billion, down 6% quarter-over-quarter and 11.8% year-over-year, at the high end of guidance.

• Gross profit for Q3 2025 was NT$8.9 billion, down 6% sequentially and 19% year-over-year.

• Operating income for Q3 2025 fell 20% quarter-over-quarter and 38% year-over-year to NT$3.86 billion.

• Net income for Q3 2025 was NT$3.65 billion, down 2% sequentially and 30.5% year-over-year.

• EPS for Q3 2025 was NT$6.01, down from NT$6.14 in Q2 and NT$8.64 a year ago.

Financial highlights

• Gross margin for Q3 2025 was 36.3%, flattish quarter-over-quarter but down from 39.7% a year ago.

• Operating margin for Q3 2025 was 15.7%, down from 18.44% in Q2 and 22.4% a year ago.

• Non-operating income in Q3 2025 was NT$518 million, mainly from Forex gain and interest income.

• Inventory at September 30, 2025 was NT$9.20 billion, little changed from June 30, 2025; inventory days in Q3 were 59.

• Tax rate in Q3 2025 was 16.46%, slightly higher than 16.2% in H1; full-year guidance remains 16%-17%.

Outlook and guidance

• Q4 revenue expected between NT$22 billion and NT$23 billion, with gross margin guidance of 35%-38% and operating margin of 14.5%-17.5%.

• Q4 is expected to be a low season for consumer and IT products, with panel makers controlling production.

• Revenue growth projected for 2026, driven by new product launches and increasing demand for AI-enabled edge devices.

• Monthly sales for January–October 2025 were flat compared to the same period in 2024, indicating stabilization after prior declines.

• Management expects no material impact from newly adopted or upcoming accounting standards.