Taiwan Semiconductor Manufacturing Company (TSM) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue reached NT$989.92 billion (US$33.10 billion), up 10.1% sequentially and 30.3%–40.8% year-over-year, driven by strong demand for advanced nodes and HPC.

• Net income attributable to shareholders was NT$452.30 billion, up 13.6% sequentially and 39.1% year-over-year.

• EPS was NT$17.44, up 13.6% sequentially and 39% year-over-year; ROE was 37.8%.

• Q4 2025 revenue is guided between $32.2B and $33.4B, a 1% sequential decrease but 22% year-over-year growth at midpoint.

• Full-year 2025 revenue expected to increase by close to mid-30% year-over-year in USD terms.

Financial highlights

• Gross margin improved to 59.5%, up 0.9 percentage points sequentially and 1.7 points year-over-year; operating margin rose to 50.6%.

• Net profit margin was 45.7%, up 3.0 points from 2Q25.

• Free cash flow for Q3 2025 was NT$139.38 billion.

• Cash and marketable securities at quarter-end were TWD 2.8T ($90B); cash balance increased by TWD 106B to TWD 2.5T.

• CapEx for Q3 2025 was NT$287.45 billion (US$9.70 billion); Q2 2024 dividend payout was TWD 117B.

Outlook and guidance

• Q4 2025 gross margin expected between 59%-61%, operating margin 49%-51%.

• CapEx for 2025 narrowed to $40B-$42B, with 70% allocated to advanced process technologies.

• AI-related demand remains robust, supporting continued investment and growth.

• Gross margin dilution from overseas fabs expected to be 1%-2% for full-year 2025, lower than previous guidance.

• Board approved a NT$5.00 cash dividend for 2Q25, with distribution scheduled for January 8, 2026.