Realtek Semiconductor (2379) investor relations material

Executive summary

• Q1 2026 revenue reached NT$36,423 million (TWD 36.4 billion), up 38.6% sequentially and 4.0% year-over-year, surpassing expectations due to strong end market demand and restocking after Q4 inventory control.

• Net income for Q1 2026 was NT$4,330 million, down 9.1% year-over-year but up 63.1% sequentially, with EPS at NT$8.44, up from NT$5.17 in Q4 2025.

• Gross margin was 49.7%, up 1.6 percentage points from Q4 but down 1.9 points year-over-year, reflecting higher operating costs and inventory write-offs.

• Inventory turnover days improved to 105 from 127 in Q4, reflecting robust restocking and customer preparations amid supply chain uncertainties.

• Total comprehensive income rose to NT$5,662.7 million, driven by currency translation gains and fair value increases in equity investments.

Financial highlights

• Operating income for Q1 2026 was NT$4,332 million (11.9% margin), with operating expenses at NT$13,755 million (37.8% of revenue), and OPEX ratio down 1.4 percentage points from Q4.

• Non-GAAP income was NT$646 million, stable quarter-over-quarter but down 8.0% year-over-year.

• Cash and current financial assets stood at NT$64,721 million at quarter-end, with cash and cash equivalents at NT$10,988.6 million.

• Net cash from operating activities was NT$6,113.9 million, with a net decrease in cash of NT$2,077.3 million for the quarter.

• Cash dividends of NT$12,887.8 million were declared for 2025 earnings.

Outlook and guidance

• Q2 outlook supported by stable demand and continued restocking, with customers anticipating price hikes and supply uncertainties.

• Gross margin faces pressure from rising DRAM and manufacturing costs, with further price increases expected in Q2 2026.

• OPEX ratio expected to remain steady, balancing R&D investment with operational discipline.

• Visibility into H2 2026 remains limited; network connectivity products expected to outperform, while consumer-driven sectors may normalize.

• The company continues to focus on R&D and operational efficiency, with ongoing investments in property, plant, and equipment and intangible assets.