Achieves 5^th Consecutive Quarter of Record Gross Margin; 7^th Consecutive Quarter of Record Adjusted EPS and Revenue

PLANO, Texas — (BUSINESS WIRE) — November 7, 2022 — Diodes Incorporated (Diodes) (Nasdaq: DIOD) today reported its financial results for the third quarter ended September 30, 2022.

Third Quarter Highlights

• Revenue was a record $521.3 million, increasing 10.6 percent from $471.4 million in the third quarter 2021 and 4.1 percent from $501.0 million in the second quarter 2022;
• GAAP gross profit was a record $217.8 million, increasing 20.2 percent from $181.2 million in the third quarter 2021 and 5.5 percent from $206.5 million in the second quarter 2022;
• GAAP gross profit margin was a record 41.8 percent, an increase of 340 basis points from the 38.4 percent in the third quarter 2021 and 60 basis points from 41.2 percent in the second quarter 2022;
• GAAP net income was a record $86.4 million, compared to $68.4 million in the third quarter 2021 and $80.2 million in the second quarter 2022;
• Non-GAAP adjusted net income was a record $92.2 million, compared to $67.3 million in the third quarter 2021 and $86.9 million in the second quarter 2022;
• GAAP EPS was a record $1.88 per diluted share, a 25.3 percent improvement from the $1.50 per diluted share in the third quarter 2021 and a 7.4 percent increase compared to $1.75 per diluted share in the second quarter 2022;
• Non-GAAP EPS was a record $2.00 per diluted share, a 36.1 percent improvement from the $1.47 per diluted share in the prior year quarter and a 5.3 percent increase from the $1.90 per diluted share last quarter;
• Excluding $8.1 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 $141.9 million, or 27.2 percent of revenue, compared to $114.5 million, or 24.3 percent of revenue, in the third quarter 2021 and $130.6 million, or 26.0 percent of revenue, in the second quarter 2022; and
• Achieved cash flow from operations of $132.2 million and $62.4 million of free cash flow, including $69.8 of capital expenditures. Net cash flow was a positive $78.3 million.

Commenting on the results, Dr. Keh-Shew Lu, Chairman, President and Chief Executive Officer, stated, “Our gross margin and earnings per share continued to expand in the quarter to record levels, driven by another quarter of record revenue combined with outstanding execution by the team, especially considering the COVID-related lockdowns and power outages in certain regions of China for part of the quarter. Contributing to our strong performance was the achievement of record revenue in our automotive and industrial end markets that together totaled 44% of revenue, which is above 41% for the second consecutive quarter and above our 2025 target model. Diodes’ automotive business represented 16% of total revenue for the first time, reflecting the ongoing success of our customer and content expansion initiatives as well as share gains in this end market.

“Over the past several quarters, Diodes has consistently proven its ability to execute amidst one of the most challenging supply chain environments that the industry has experienced and was still able to deliver multiple consecutive quarters of record results, expanded margins and increased profitability. When looking back over the past two years, our revenue has grown 68%, gross margin expanded 590 basis points and adjusted earnings per share increased over 220%. These achievements truly set Diodes apart as a consistent operator through diverse business and economic environments. We are well on our way toward our 2025 financial targets of $2.5 billion in revenue and $1 billion in gross profit.”

Third Quarter 2022

Revenue for third quarter 2022 was a record $521.3 million, increasing 10.6 percent from $471.4 million in the third quarter 2021 and 4.1 percent from $501.0 million in the second quarter 2022.

GAAP gross profit for the third quarter 2022 was a record $217.8 million, or a record 41.8 percent of revenue, increasing from $181.2 million, or 38.4 percent of revenue, in the third quarter of 2021 and $206.5 million, or 41.2 percent of revenue, in the second quarter 2022.

GAAP operating expenses for third quarter 2022 were $105.4 million, or 20.2 percent of revenue, and on a non-GAAP basis were $101.3 million, or 19.4 percent of revenue, which excludes $3.9 million of amortization of acquisition-related intangible asset expenses and $0.1 million of acquisition-related costs. GAAP operating expenses in the third quarter 2021 were $104.0 million, or 22.1 percent of revenue, and in the second quarter 2022 were $100.3 million, or 20.0 percent of revenue.

Third quarter 2022 GAAP net income was a record $86.4 million, or $1.88 per diluted share, compared to GAAP net income in the third quarter 2021 of $68.4 million, or $1.50 per diluted share, and GAAP net income of $80.2 million, or $1.75 per diluted share, in the second quarter 2022.

Third quarter 2022 non-GAAP adjusted net income was a record $92.2 million, or $2.00 per diluted share, which excluded, net of tax, $3.2 million of acquisition-related intangible asset costs, $2.1 million non-cash mark-to-market adjustment of investments, $0.1 million of acquisition-related costs and a $0.4 million gain on the sale of investments. This compares to non-GAAP adjusted net income of $67.3 million, or $1.47 per diluted share, in the third quarter 2021 and $86.9 million, or $1.90 per diluted share, in the second quarter 2022.

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):