Alchip Technologies (3661) Q4 2025 earnings summary

Executive summary

• Q4 2025 revenue was $152.7M, down 31.5% quarter-on-quarter and 32.2% year-on-year, with net income of $47.9M and EPS of NT$18.3, the highest quarterly EPS for the year.

• Full-year 2025 revenue was $991.9M, a 39% year-on-year decline, with net income of $179.5M and EPS of NT$69.2.

• Q4 2025 achieved record profitability due to a favorable gross margin mix, with NRE revenue exceeding 50% of total revenue.

• Revenue decline was mainly due to missing a product generation from the top customer, but the relationship was regained and new production is set to ramp in Q2.

• Automotive business in China overcame geopolitical challenges and began mass production, with next-gen development underway.

Financial highlights

• Q4 operating income was $39.1M, up 1% sequentially but down 27.9% year-on-year.

• Q4 net income grew 8.1% sequentially but declined 16% year-on-year.

• Gross margin in Q4 reached 42%, the highest for the year, driven by a high NRE mix.

• HPC/AI revenue accounted for 67% of Q4 revenue and 83% of full-year revenue.

• North America contributed 50% of Q4 revenue and 78% of full-year revenue.

Outlook and guidance

• Q1 2026 revenue and P&L expected to be similar to Q4 2025, with low production revenue and seasonally weak NRE.

• Significant revenue ramp anticipated from Q2 as 3nm AI accelerator production resumes.

• 80% of 2026 revenue expected in the second half, driven by production ramp.

• Full-year revenue growth expected to surpass 2024 peak, with strong long-term growth outlook in AI and HPC.

• Gross margin for 2026 guided to be higher than 2024 levels.