Phison Electronics (8299) Q1 2026 earnings summary

Executive summary

• Q1/1Q26 revenue reached TWD 40.967 billion, an all-time high, with gross profit at TWD 25.118 billion and EPS at TWD 68.8, also record highs, driven by AI ecosystem modules contributing over 38% of revenue.

• Business transformation focuses on AI storage and edge AI compute platforms, supported by heavy R&D investment and a large engineering workforce.

• Inventory levels increased 200% QoQ to secure supply for future demand, especially for AI and enterprise customers.

Financial highlights

• Gross margin reached 61.3%, an all-time high, despite a 1.5% inventory write-off for conservatism.

• Basic EPS for 1Q26 was TWD 68.8, with TWD 10–10.65 per share from investment and JV returns, and inventory write-downs impacting by -TWD 2.37.

• April revenue hit TWD 20.207 billion, a new monthly record, with fulfillment rates at 30-35% due to supply constraints.

• ASP increases drove much of the 80% QoQ revenue growth, especially in enterprise SSDs.

• Operating profit margin rose to 36.2%, and net profit margin to 37.0% in 1Q26.

Outlook and guidance

• AI ecosystem modules and solutions are expected to become the largest revenue contributor, with ongoing supply constraints anticipated.

• Ongoing investments in advanced nodes, AI storage, and talent are aimed at sustaining long-term revenue and profitability growth.

• Monthly revenue of TWD 20 billion seen as a new baseline, with higher levels possible as inventory is managed for Q4 demand.

• Gross margin expected to remain strong, supported by product mix and R&D-driven value creation.