Diodes (DIOD) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 9.5% sequentially to $350.1M, surpassing guidance, but was down from $404.6M year-over-year.

• Automotive revenue increased 18% sequentially, now representing 19% of product revenue, driven by content expansion and design wins, especially in China.

• Net income was $13.7M, up from $8.0M in Q2 2024 but down from $48.7M in Q3 2023; non-GAAP EPS was $0.43, up 30% sequentially.

• Channel inventory improved as both inventory dollars and days decreased sequentially, signaling market recovery in Asia.

• Cash and equivalents at quarter-end were $325M, with total debt at $58M.

Financial highlights

• Q3 2024 revenue: $350.1M (up from $319.8M in Q2 2024, down from $404.6M in Q3 2023).

• Gross profit: $118M (33.7% margin), up from $107.4M (33.6%) in Q2, down from $155.9M (38.5%) in Q3 2023.

• GAAP net income: $13.7M ($0.30/diluted share), up from $8M ($0.17) in Q2, down from $48.7M ($1.05) in Q3 2023.

• Non-GAAP adjusted net income: $20.1M ($0.43/diluted share), up from $15.4M ($0.33) in Q2, down from $52.5M ($1.13) in Q3 2023.

• EBITDA: $46.9M (13.4% of revenue), up from $41.1M (12.8%) in Q2, down from $90.6M (22.4%) in Q3 2023.

Outlook and guidance

• Q4 2024 revenue expected at $337M, plus or minus 3%, a 3.7% sequential decrease but better than typical seasonality.

• GAAP gross margin expected at 33% ±1%; non-GAAP operating expenses at ~28% of revenue ±1%.

• Net interest income expected at $2.5M; effective tax rate at 18% ±3%; share count for EPS: 46.7M.

• Management expects Q4 to be better than typical seasonality, with continued inventory adjustments in automotive and industrial, and flat to slightly up computing.

• Liquidity and borrowing capacity expected to cover working capital, capex, and acquisitions for at least the next 12 months.