Exceeded Second Quarter Expectations with Strong Growth Anticipated for the Third Quarter

PLANO, Texas — (BUSINESS WIRE) — August 8, 2024 — Diodes Incorporated (Diodes) (Nasdaq: DIOD) today reported its financial results for the second quarter ended June 30, 2024.

Second Quarter Highlights

• Revenue was $319.8 million, compared to $302.0 million in the first quarter 2024 and $467.2 million in the second quarter 2023;
• Global Point of Sales (POS) increased over 7 percent sequentially;
• GAAP gross profit was $107.4 million, compared to $99.6 million in the first quarter 2024 and $195.4 million in the second quarter 2023;
• GAAP gross profit margin was 33.6 percent, compared to 33.0 percent in the first quarter 2024 and 41.8 percent in the second quarter 2023;
• GAAP net income was $8.0 million, compared to $14.0 million in the first quarter 2024 and $82.0 million in the second quarter 2023;
• Non-GAAP adjusted net income was $15.4 million, compared to $13.0 million in the first quarter 2024 and $73.3 million in the second quarter 2023;
• GAAP EPS was $0.17 per diluted share, compared to $0.30 per diluted share in the first quarter 2024 and $1.77 per diluted share in the second quarter 2023;
• Non-GAAP EPS was $0.33 per diluted share, compared to $0.28 per diluted share last quarter and $1.59 per diluted share in the prior year quarter;
• Excluding GAAP and non-GAAP $3.4 million and $2.8 million, respectively, net of tax, of non-cash share-based compensation expense, GAAP and non-GAAP earnings per share would have increased by $0.07 per share and $0.06 per share, respectively;
• EBITDA was $41.1 million, or 12.8 percent of revenue, compared to $48.3 million, or 16.0 percent of revenue, in the first quarter 2024 and $133.5 million, or 28.6 percent of revenue, in the second quarter 2023; and
• Cash flow provided by operations was $14.4 million and a negative $3.5 million of free cash flow, including $17.9 million of capital expenditures. Net cash flow was a negative $2.9 million, including the pay-down of $22.2 million of total debt.

Commenting on the results, Gary Yu, President of Diodes, stated, “Second quarter results exceeded our prior expectations as Diodes’ demand began to recover from the low point in the first quarter, especially in the computing market in Asia. Additional positive indicators included improvement in distributor inventory levels with a sequential decrease in channel inventory weeks. Demand improvement during the quarter was most prominent in our computing end market, where Diodes is increasingly participating in the growth of AI servers. In fact, POS across the 3C markets increased significantly over the prior quarter, and Diodes was able to maintain automotive and industrial product revenue at 41% of total due to content increases in both markets, even though the recovery remained slow due to the ongoing inventory adjustments.

“As we look to the third quarter, we are guiding for strong revenue growth of over 8% at the mid-point, supported by overall POS growth of more than 7% in the second quarter. Our near-term expectation for gross margin continues to reflect factory underloading related to our wafer service agreements as well as our internal demand. However, we expect to continue margin expansion toward our target model of 40% as loading improves combined with a resumption of growth in the automotive and industrial end markets. As global demand strengthens, we remain focused on driving further operational improvements to deliver increased earnings and cash flow.”

Second Quarter 2024

Revenue for second quarter 2024 was $319.8 million, compared to $302.0 million in the first quarter 2024 and $467.2 million in the second quarter 2023.

GAAP gross profit for the second quarter 2024 was $107.4 million, or 33.6 percent of revenue, compared to $99.6 million, or 33.0 percent of revenue, in the first quarter 2024 and $195.4 million, or 41.8 percent of revenue, in the second quarter of 2023.

GAAP operating expenses for second quarter 2024 were $103.7 million, or 32.4 percent of revenue, and on a non-GAAP basis were $90.9 million, or 28.4 percent of revenue, which excludes an $8.3 million restructuring charge, $3.9 million amortization of acquisition-related intangible asset expenses and $0.6 million in officer retirement costs. GAAP operating expenses in the first quarter 2024 were $86.6 million, or 28.7 percent of revenue and in the second quarter 2023 were $105.8 million, or 22.7 percent of revenue.

Second quarter 2024 GAAP net income was $8.0 million, or $0.17 per diluted share, compared to GAAP net income in the first quarter 2024 of $14.0 million, or $0.30 per diluted share, and $82.0 million, or $1.77 per diluted share, of GAAP net income in the second quarter 2023.

Second quarter 2024 non-GAAP adjusted net income was $15.4 million, or $0.33 per diluted share, which excluded, net of tax, $7.2 million in restructuring charges, $3.5 million non-cash mark-to-market investment value adjustment, $3.1 million of acquisition-related intangible asset costs and $0.5 million in officer retirement costs. This compares to non-GAAP adjusted net income of $13.0 million, or $0.28 per diluted share, in the first quarter 2024 and $73.3 million, or $1.59 per diluted share, in the second quarter 2023.

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):