Achieves Record Revenue for Fourth Consecutive Quarter, Resulting in Market Share Gains, Record Gross Profit, Gross Profit Margin, Net Income, EPS and EBITDA

PLANO, Texas — (BUSINESS WIRE) — November 3, 2021 — Diodes Incorporated (Nasdaq: DIOD) today reported its financial results for the third quarter ended September 30, 2021.

Third Quarter Highlights

• Revenue was a record $471.4 million, increasing 52 percent from $309.5 million in the third quarter 2020 and 7 percent from $440.4 million in the second quarter 2021;
• GAAP gross profit was a record $181.2 million, increasing 63 percent from $111.1 million in the third quarter 2020 and 13 percent from $159.8 million in the second quarter 2021 and;
• GAAP gross profit margin was a record 38.4 percent, an increase of 250 basis points from the 35.9 percent in the third quarter 2020 and 210 basis points from the 36.3 percent in the second quarter 2021;
• GAAP net income was a record $68.4 million, or $1.50 per diluted share, a 194 percent improvement from the $0.51 per diluted share, or $27.2 million, in the third quarter 2020 and a 23 percent improvement from the $1.22 per diluted share, or $55.4 million, in the second quarter 2021;
• Non-GAAP adjusted net income was a record $67.3 million, or $1.47 per diluted share, a 137 percent improvement from the $0.62 per diluted share, or $32.8 million, in the third quarter 2020 and a 23 percent improvement from the $1.20 per diluted share, or $54.6 million, in the second quarter 2021;
• Excluding $8.0 million, net of tax, of non-cash share-based compensation expense, both GAAP and non-GAAP earnings per share would have increased by $0.18 per diluted share;
• EBITDA was a record $114.5 million, or 24.3 percent of revenue, compared to $63.3 million, or 20.5 percent of revenue, in the third quarter 2020 and $99.4 million, or 22.6 percent of revenue, in the second quarter 2021; and
• Achieved cash flow from operations of $98.9million and $57.8 million of free cash flow, including $41.1 of capital expenditures. Net cash flow was a negative $10.1 million, including the pay down of $49.7 million of total debt.

Commenting on the results, Dr. Keh-Shew Lu, Chairman, President and Chief Executive Officer, stated, “This quarter represented the fourth consecutive quarter of record revenue and our second consecutive quarter of gross margin expansion over 210 basis points, resulting in record gross margin and profits. Underpinning our growth has been the success of our content expansion initiatives, particularly in the automotive market where revenue grew over 65% year-over-year and 7% sequentially, contributing to a 8-year CAGR of 30%. Additionally, our Pericom products continued to set new revenue records, achieving 4 consecutive quarters of growth primarily driven by traction in high-end computing and server applications.

“Our growth in these higher-margin end markets combined with increased loading at our LITE-ON Semiconductor (LSC) facilities have enabled us to increase our top-line revenue and margins, even in the midst of this supply-constrained environment. Diodes is favorably positioned with a global manufacturing footprint that provides the flexibility to strategically expand our capacity and reduce costs, either by adding equipment to existing lines or converting equipment to larger wafers. These ongoing actions are expected to support our continued growth and margin improvement into next year and toward our longer-term target of $1 billion in gross profit by 2025 on $2.5 billion in revenue and 40% gross margin.”

Third Quarter 2021

Revenue for third quarter 2021 was a record $471.4 million, increasing 52 percent from $309.5 million in the third quarter 2020 and 7 percent from $440.4 million in the second quarter 2021.

GAAP gross profit for the third quarter 2021 was a record $181.2 million, or a record 38.4 percent of revenue, increasing from $111.1 million, or 35.9 percent of revenue, in the third quarter of 2020 and $159.8 million, or 36.3 percent of revenue, in the second quarter 2021.

GAAP operating expenses for third quarter 2021 were $104.0 million, or 22.1 percent of revenue, and on a non-GAAP basis were $99.6 million, or 21.1 percent of revenue, which excludes $4.1 million of amortization of acquisition-related intangible asset expenses. GAAP operating expenses in the third quarter 2020 were $73.2 million, or 23.7 percent of revenue and in the second quarter 2021 were $94.4 million, or 21.4 percent of revenue.

Third quarter 2021 GAAP net income was a record $68.4 million, or $1.50 per diluted share, compared to GAAP net income in the third quarter 2020 of $27.2 million, or $0.51 per diluted share and GAAP net income of $55.4 million, or $1.22 per diluted share, in the second quarter 2021.

Third quarter 2021 non-GAAP adjusted net income was a record $67.3 million, or $1.47 per diluted share, which excluded, net of tax, $3.3 million of acquisition-related intangible asset costs, $0.3 million of acquisition-related and restructuring costs, and a $4.7 million gain in value on certain LSC investments. This compares to non-GAAP adjusted net income of $32.8 million, or $0.62 per diluted share, in the third quarter 2020 and $54.6 million, or $1.20 per diluted share, in the second quarter 2021.

The following is an unaudited summary reconciliation of GAAP net income to non-GAAP adjusted net income and per share data, net of tax (in thousands, except per share data):