Diodes (DIOD) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue was $392.2M, up 12% year-over-year and 7% sequentially, driven by strong demand in general computing, AI server, and data center applications, with Asia leading growth.

• Channel inventory levels decreased, with inventory dollars down over 25% from peak, and inventory days improved sequentially.

• Automotive and industrial markets showed sequential and year-over-year revenue growth, though recovery remains slower than expected.

• Free cash flow per share reached $1.35 for Q3 and $4.02 for the trailing twelve months, nearing historical highs.

• New product introductions, especially in automotive and industrial, are expected to drive future margin expansion and growth.

Financial highlights

• Q3 2025 revenue was $392.2M, up 12% year-over-year and 7.1% sequentially.

• Gross profit was $120.5M (30.7% margin), down from 33.7% margin a year ago.

• GAAP net income was $14.3M ($0.31/share), up from $13.7M ($0.30/share) last year, but down from $46.1M ($0.99/share) last quarter.

• Non-GAAP adjusted net income was $17.2M ($0.37/share), down from $20.1M ($0.43/share) last year, but up from $15M ($0.32/share) last quarter.

• EBITDA was $46.6M (11.9% margin), compared to $46.9M (13.4%) last year and $84.5M (23.1%) last quarter.

• Free cash flow was $62.8M, with $16.3M in capital expenditures.

• Cash and short-term investments totaled $392M; working capital was $890M; total debt was $58M.

Outlook and guidance

• Q4 2025 revenue expected at $380M (±3%), representing 12% year-over-year growth and fifth consecutive quarter of year-over-year growth.

• GAAP gross margin expected at 31% (±1%), non-GAAP operating expenses at ~27% of revenue.

• Full-year 2025 revenue growth projected at 12%.

• 2026 expected to be a double-digit growth year, with margin and profitability improvements targeted.

• Management expects liquidity and borrowing capacity to cover working capital, capital expenditures, and acquisitions for at least the next 12 months.