Advantech (2395) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached NT$20.39 billion (TWD 20.4 billion), up 17% year-over-year and 14% quarter-on-quarter, setting a record high and beating guidance.

• Net income was NT$3.33 billion, up 22% year-over-year; EPS was NT$3.85.

• All major regions and sectors posted double-digit growth, with China and Taiwan leading at 38% and 75% year-over-year, respectively.

• Strong demand from semiconductor, medical, and transportation sectors drove performance.

• Operating profit and net income saw significant increases, driven by effective operating expense control.

Financial highlights

• Gross margin was 39.1%, slightly lower year-on-year due to higher component/raw material costs.

• Operating profit reached NT$3.73 billion (18.3% margin), up 28% year-over-year.

• Effective tax rate was 18.4%.

• Inventory turnover days improved to 97 days; cash conversion cycle at 84 days.

• Cash and cash equivalents at quarter-end were NT$10.00 billion, down from NT$15.27 billion a year earlier.

Outlook and guidance

• Q2 2026 revenue expected between US$650 million and US$670 million; gross margin guidance of 38%-40%, operating margin 16%-18%.

• Edge AI revenue target for 2026 remains at 30% of total revenue, with Q1 at 20.5%.

• System and IoT automation expected to outpace embedded and Intelligent Service in 2026.

• BB ratio at 1.77 in Q1, indicating strong order backlog and aggressive customer ordering.

• Management expects continued growth in all major business units and regions, with a focus on digital transformation and IoT solutions.