Novatek Microelectronics Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
Is Novatek Microelectronics a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
As a Free StocksGuide user, you can view scores for all 9,127 stocks worldwide.
StocksGuide Premium
StocksGuide Unlimited
Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = NT$331.64b | Revenue (TTM) = NT$99.20b
Market Cap = NT$331.64b | Estimated Revenue = NT$112.64b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = NT$277.92b | Revenue (TTM) = NT$99.20b
Enterprise Value = NT$277.92b | Forward Revenue = NT$112.64b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Novatek Microelectronics Stock Analysis
Analyst Opinions
24 Analysts have issued a Novatek Microelectronics forecast:
Analyst Opinions
24 Analysts have issued a Novatek Microelectronics forecast:
Novatek Microelectronics Events
Past Events
|
MAY
6
Q1 2026 Earnings Call
5 months ago
|
|
FEB
6
2025 Earnings Call
8 months ago
|
|
NOV
6
Q3 2025 Earnings Call
11 months ago
|
StocksGuide Free
Novatek Microelectronics — Q1 2026 Earnings Call
1. Management Discussion
[Interpreted] Good afternoon, everyone. I would extend a warm welcome to everyone for joining Novatek's 2026 First Quarter Online Earnings Call. This is David Chen, Vice President and Company Spokesperson. I'll be the host for today's conference.
Joining me on the call are Vice Chairman, Steve Wang; and our CFO, Jane; and our IR Director, Tony Tseng and Yvonne. Thank you so much for joining in, and good to see you all online. The agenda for today's event is as follows: First, Tony will report on Novatek's first quarter results in English. Following that, our Vice Chairman, Steve, will provide further details on our Q1 results and guidance for the second quarter of 2026. Next, we'll proceed with the question-and-answer session. We've already received some questions from our investors. And if you have any additional questions, please feel free to submit them online. Tony will help to bring up the questions in both Chinese and English. Afterwards, our Vice Chairman, Steve and Jane and myself will try to answer all your questions in Chinese, and I'll later translate them into English. We do encourage your active participation and look forward to addressing your concerns.
And now I'll hand over the time to Tony to report our Q1 results. Yes, Tony, please.
Thank you, David. Good afternoon. This is Tony. Let me report our first quarter results in more detail. The first page, please take a look at our safe harbor notice. As for consolidated sales, first quarter at TWD 23.15 billion increased 1.4% quarter-over-quarter from TWD 22.82 billion, but decreased 14.7% year-over-year from TWD 27.12 billion in first quarter 2005.
Now moving to the gross profit. First quarter of TWD 9.04 billion increased 3.8% quarter-over-quarter from first quarter but decreased 16.2% year-over-year from TWD 10.78 billion in first quarter 2005.
Now moving to the gross margin. First quarter gross margin of 39.06% increased 87 basis points from 38.19% in first quarter, but decreased 70 basis points from 39.76% a year ago. This is exceeding our guidance of 36% to 39%.
Now moving to the operating expense. First quarter of TWD 5.01 billion increased 3.3% quarter-over-quarter from TWD 4.85 billion, but decreased 1.5% year-over-year from TWD 5.09 billion. As for operating income, first quarter of TWD 4.03 billion increased 4.3% quarter-over-quarter, but decreased 29.3% from TWD 5.7 billion a year ago.
Let's take a look at our operating margin. Our first quarter operating margin of 17.4% increased 48 basis points quarter-over-quarter from TWD 16.92 billion 6.92% in quarter 4 last year, but decreased 360 basis points from 21% a year ago, and this is meeting our guidance of 15% to 18%.
Next, as for net income, first quarter of TWD 3.77 billion increased 2.1% quarter-over-quarter from TWD 3.69 billion in quarter 4, but decreased 28.4% year-over-year from TWD 5.26 billion a year ago. Next, as for EPS, first quarter of TWD 6.19 increased TWD 0.12 quarter-over-quarter from TWD 6.07 but decreased TWD 2.46 from TWD 8.65 a year ago.
Next, this is our income statement summary for first quarter compared with quarter 4 last year and also first quarter 2025. This page shows our revenue breakdown for our 3 business groups. For first quarter, SoC business accounted for 44% of overall revenue, which is one of the highest level in our history and up from 35% in quarter 4 last year. As for small medium-sized drivers, this business accounted for 33% of revenue in first quarter, down from 43% in quarter 4 last year.
Lastly, as for large-size driver, this business accounted for 23% of revenue in first quarter compared with 22% in quarter 4. We are also reporting our April revenue. April revenue of TWD 9.23 billion increased 1.16% from TWD 9.12 billion and also increased 8.93% month-over-month. For the first 4 months, the combined revenue of TWD 32.37 billion decreased 10.68% from TWD 36.24 billion a year ago. As for the revenue breakdown for the April, we'd like to highlight our SoC business hit a record level in terms of percentage of revenue, reaching 53.7% in April revenue.
This page shows our monthly revenue from January 2025 until April '26. As you can see from here, we are telling year-over-year growth from April this year. This page shows some key summary for our financials and the balance sheet. For cash in first quarter reached TWD 48.92 billion, increased 15.32% quarter-over-quarter from TWD 42.42 billion, but decreased 8.1% year-over-year from TWD 53.23 billion. Accounts receivable first quarter of TWD 17.92 billion decreased 15.05% quarter-over-quarter from TWD 21.10 billion and also decreased 12.03% year-over-year from TWD 20.38 billion. Inventory first quarter of TWD 10.85 billion increased 25.58% quarter-over-quarter from TWD 8.64 billion and also increased 13.05% year-over-year from TWD 9.60 billion.
Now I'm handing back the call to David.
Thank you, Tony, for the report on our Q1 results. And here, we have some recent major events. We would like to share with you our latest achievement on corporate governance. Novatek has once again been ranked among the top 5% in corporate governance for the fourth consecutive year. And our Board of Directors also proposed a cash dividend of TWD 23 per common share with a total amount of TWD 13.995 billion, which resulted in a payout ratio of 85.61%.
We would also like to give you a heads-up. Novatek Board of Directors also approved the date of our AGM, which will be held on May 29, Friday, 2026. And we are also pleased to share an update on the status of our Novatek 2025 ESG report. Throughout 2025, Novatek has made significant progress across multiple ESG areas, and we are on track to publish our report in June, and we warmly invite you to download or review the report upon release and welcome your valuable feedback.
And now I'll turn over the call to our Vice Chairman, Steve, to provide us more details on Q1 results and Q2 guidance.
[Foreign Language]
[Interpreted] Our Q1 revenue reached TWD 23.15 billion, increased by 1.44% quarter-on-quarter. And the revenue increased reaching the upper end of our guidance, and this is mainly due to growth in the SoC and large display driver IC business despite the negative impact of the weak smartphone demand. And as for the Q1 margins, our Q1 gross margin reached 39.06%, quarter-on-quarter increased by 0.87 percentage points, and this has also exceeded our guidance, and this is mainly due to favorable product mix.
Regarding our second quarter outlook, in the second quarter, memory supply remains tight and price continues to rise. As a result, price of some end products, for example, smartphones, PC and notebooks have been -- the price has been adjusted upward and consumer demand trends in the second half of the year will need close monitoring and a bit expectations of price increase, system customers pulled in orders, resulting in a stronger demand in Q2. Accordingly, Novatek Q2 operating guidance is projected as follows: Revenue will be between TWD 27.5 billion to TWD 28.5 billion at an exchange rate of TWD 1 to TWD 31.3 and gross margin will be between 38% to 38% to 41% range. And operating margin is expected to be around 16% to 19% range, which will be around -- the top line will be around quarter-on-quarter growth by 19% to 23%.
Next, we will move on to Q&A session. Please be reminded if you have any questions that you would ask please send it online. Now I'll hand over the time to Tony, and Tony will try to read out some of the questions that we already have on hand, and we'll answer them one by one.
[Foreign Language]
[Interpreted] Could management share the view on the sequential trend across major applications in terms of order flow into second quarter?
According to the panel production across a major application into second quarter, TVs are expected to be slightly up quarter-on-quarter. Monitor production to be flattish and as for notebook demand, we are expecting it to improve quarter-on-quarter, mainly driven by early order pull-ins from brand OEMs in anticipation of rising memory price. And tablet demand is largely unchanged and mobile phones are flattish, but demand for LCD TDDI is increasing quarter-on-quarter. And as for automotive, demand in the China market, we are seeing a slight increase, while other regions remain flat.
[Foreign Language]
[Interpreted] Therefore, could you also provide your quarterly revenue trend across 3 of your business groups?
Based on the earlier guidance that we gave you, all the 3 of Novatek's major product lines are expected to deliver meaningfully quarterly growth in Q2. And as for our SoC we are seeing the revenue is projected to grow the most, driven primarily by rising demand for machine vision edge-related AI chips, along with selective ASP adjustment for certain products because of the memory price. And as for the large panel driver and small medium-sized driver, we are expected to have a similar quarter-on-quarter growth rate. And as for the large driver IC, growth will be mainly supported by early pull-ins of notebook and on the panel orders. And the small, medium-sized growth will be driven by increased shipment of LCD TDDI for tablets, flattish demand for OLED smartphones and a slight increase in automotive applications.
[Foreign Language]
[Interpreted] Could management also share the view on the second half across major applications? And also, could you also highlight your major product launch in the second half?
Well amid the expectations of price increase, consumer electronics demand has seen order pull in and coupled with geopolitical factors, including tensions in the Middle East and uncertainties in the second half of the year have increased. And accordingly, Novatek will closely monitor the consumer end market demand trend. And in the second half, we do plan to launch a number of new products, particularly in high-end applications such as machine vision, edge AI solutions and OLED TDDI for foldable smartphones. OLED for notebook and also gaming monitor products. And as a result, we expect full year revenue to grow year-over-year.
[Foreign Language]
[Interpreted] Could management also update the progress on advanced ASIC project over the past 3 months?
Regarding our 4-nanometer HPC POC demo system, it is still under development, and we don't expect any revenue contribution from this advanced ASIC in the near term. But we'll be more focusing on the edge AI, which we think should have more contribution in the short-term.
[Foreign Language]
[Interpreted] As management mentioned the positive outlook on your image SoC for 2026, could you also provide the year-over-year or quarter-over-quarter revenue growth on this product line in first quarter? And also, could you also elaborate the major growth driver for this business?
Well, as the industry enters into the era of AI agents, edge device with embedded AI capabilities are expected to become a key structural growth trend. And the demand for Novatek's Edge AI image or vision solutions has remained pretty strong, and particularly in market outside China because of the geopolitical reasons and supported by expanding adoption across a broad range of emerging applications. So we remain confident in the long-term growth potential of this business.
[Interpreted] Has penetrated into the Tier 1 customers, particularly on the smartphones over the past 2 years. What are major factors behind this breakthrough? Will Novatek continue to grow revenue from this customer year-over-year in year 2026 and even next year?
Well, the Novatek's new product development programs and projects and also shipments with the international Tier 1 customers basically are progressing pretty smoothly. And as a result, meaningful revenue contribution from these initiatives to the driver IC product line are expected for the next 1 to 2 years. And this progress reflects our customers' strong recognition of Novatek's technological capabilities, and this includes design expertise, advanced process nodes along with our product quality and services.
And currently, Novatek is highly regarded by our customers as a trusted long-term strategic partner. And continued expansion of the customer base and application portfolio remains a core long-term strategic focus for the company.
[Foreign Language]
[Interpreted] First quarter gross margin exceeded the guidance of 36% to 39% range and also increased by 87 basis points quarter-over-quarter. What are those positive factors?
Basically, there are 2 reasons for the improvement in our margin. Number one is a favorable product mix that really helps us better margin. And the second one is because the KGD price hike, some of our selective product ASP has been adjusted accordingly.
[Foreign Language]
[Interpreted] Given the gross margin guidance for the second quarter, major factors to compare with the result in first quarter. Could you also provide a comment on cost increase and the selling price adjustment?
Well, there are 2 key factors that are driving the impact on our margins. Number one, the rising costs across certain materials and OTAT services including KGD, the nongood die, gold, wafers, substrate. And these all prompting Novatek to continue discussions with our customers to reflect these cost increases.
And secondly, as I mentioned earlier, the favorable product mix supported by higher contribution from our SoC product shipments that really helps to improve our margin in the second quarter.
[Foreign Language]
[Interpreted] Given ASP adjustment for your SoC product post surging memory cost, how will your gross margin for SoC change?
Well, certain SoC products has KGD in it, but not all of them, but a certain portion do have KGD in it. And given the tight supply and rising price of memory, we are making every effort to meet the customer demand while also engaging with our customer on pricing adjustment. However, such price adjustments are not expected to fully offset the impact on our product gross margins.
[Foreign Language]
[Interpreted] Raw material will continue to rise price in the second half. Could you also comment on the magnitude potentially in the second half compared with those in the first half?
Looking at the second half, driven by the strong AI-related demand, which resulting in capacity allocation effect, cost for certain materials, packaging testing service, as mentioned earlier, are expected to remain elevated in the second half of the year. And given the continued uncertainty surrounding consumer electronics demand in the second half, we are maintaining ongoing discussions and negotiations with our suppliers.
[Foreign Language]
[Interpreted] Among your 3 product lines, could you provide the status on selling price adjustment -- could you also roughly maintain your gross margin into the second half?
Considering the rising cost and the tight material supply, Novatek will prioritize supply stability and make every effort to ensure reliable product deliveries. And as for pricing adjustments, where applicable, will be made in a timely and appropriate manner, and it will be based on market demand through close communication with customers and suppliers with the aim in mind of navigating the challenges together.
[Foreign Language]
Major items for your nonoperating income of TWD 362 million in the first quarter compared with TWD 554 million in quarter 4 last year. The non-op income of TWD 362 million in the first quarter mainly came from interest income of TWD 228 million and ForEx gain of TWD 84 million.
[Foreign Language]
[Interpreted] Your inventory days as of first quarter 2026 compared with those in quarter 4 last year. Could you also provide the comments into second quarter this year?
The inventory days for first quarter were 74 days, up from 59 days in the first quarter, increased by 15 days. This is mainly due to the rising raw material costs, but it is still at a healthy level. And do you expect the inventory days at the end of second quarter to increase slightly from first quarter due to further rising raw material costs.
[Foreign Language]
[Interpreted] Operating expense of TWD 5.01 billion in first quarter was similar to the amount in both quarter 4 last year and also first quarter last year, while operating expense in 2026 still increased year-over-year from 2025.
We expect our operating expense to increase modestly in 2026, primarily driven by higher R&D investments, particularly in the advanced process technologies and also the recruitment of key talent.
[Foreign Language]
[Interpreted] Why is the tax rate of 14.2% in first quarter lower than the guidance? Could you also provide the guidance for the second quarter? And also, will you maintain the full year guidance of 16% to 17% of tax rate for 2026?
The tax rate of 14.2% in the first quarter was lower than guidance, mainly due to higher tax credits from Industrial Innovation Act implemented in 2024. And the tax rate guidance for 2026 is unchanged at the range of 16% to 17%, which is similar to 2025. I think we have covered most of the questions that we collected and that we've seen. So give us a few more minutes to review some of the other questions online.
[Foreign Language]
[Interpreted] Could management also provide your strategy and product development for your upcoming AI chips?
Well, the application for edge AI is pretty broad. Besides what we already know about surveillance, we also have other application for drones for robotics and also the Vblock camera and it is. And then -- so we are exploring all these areas. And especially all these applications are related to machine vision and also related to the...
[Foreign Language]
[Interpreted] We noticed you recently announced CapEx investment plan for your data center. Could you also provide more color in terms of the purpose and also your expected return on this investment?
In order to support our revenue growth we need more advanced nodes. And using all this advanced nodes, we definitely need more computing power and storage. And therefore, we need to build our own data center to support all these needs.
[Foreign Language]
[Interpreted] We noticed that even the legacy wafer capacity, foundry capacity and the packaging capacity has been pushed or getting more tied from the strong demand on AI and the memory. Could you also provide the recent capacity status? And could you also secure your enough capacity in the second half of this year?
Yes, you're right. I mean the strong AI-related demand did result in the capacity allocation effect. And we are currently working very closely with our suppliers to secure our capacity. Our main purpose is to make sure that we have a stable supply and make the deliveries to our customers.
Okay. Thank you so much. We have covered nearly all the questions that we have on hand. And thank you once again for joining in and wish you all the best.
[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]
Novatek Microelectronics — Q1 2026 Earnings Call
Q1 shows steady revenue with margin gains and SoC-driven growth.
📊 Quarter at a Glance
- Revenue: 23.15B TWD, +1.4% QoQ; -14.7% YoY
- Gross margin: 39.06% (+87 bps QoQ; -70 bps YoY)
- Operating margin: 17.4% (+48 bps QoQ; -360 bps YoY)
- Net income: 3.77B TWD, +2.1% QoQ; -28.4% YoY
- SoC mix: SoC revenue 44% of Q1; April SoC share 53.7%
🎯 What Management Says
- Q1 performance: Revenue at the upper end of guidance; margin benefited from favorable product mix, led by SoC and large driver ICs.
- Q2 outlook: Revenue guidance of 27.5–28.5B; GM 38–41%; OPM 16–19%; price adjustments to offset memory costs; demand monitored in 2H.
- Strategy: Launch multiple high-end AI and display products in 2H (machine-vision edge AI, OLED TDDI for foldables, OLED notebooks/gaming monitors) and expand capacity for AI-driven growth.
🔭 Outlook & Guidance
- Outlook: Q2 revenue 27.5–28.5B; GM 38–41%; OPM 16–19%; full-year revenue growth expected; risks include volatile consumer demand and memory price moves; pricing and supply discipline to mitigate.
❓ Analyst Q&A
- Topics: Q2 order flow and product mix; SoC margins and ASP adjustments amid memory pricing; progress on 4-nm HPC ASIC; capacity security and data-center investment; engagement with Tier-1 customers in edge AI.
⚡ Bottom Line
Novatek delivered a solid Q1 with revenue at the upper end of guidance and margin expansion from favorable mix. Q2 guidance remains constructive, supported by broad-based growth and a clear product-roadmap in high-end AI and display applications, plus capacity expansion. Investors should note ongoing pressure from rising raw materials and memory costs, which may cap margin gains despite robust demand.
Disclaimer: This analysis was generated with AI. AI can also make mistakes. This is not investment advice.
Novatek Microelectronics — 2025 Earnings Call
1. Management Discussion
[Interpreted] Good afternoon, everyone. I would like to extend a warm welcome to everyone for joining Novatek 2025 Fourth Quarter Online Earnings Call. This is David Chen, Vice President and Company's Spokesperson. I'll be the host of today's conference.
Joining me on the call are Vice Chairman, Steve Wang; and our IR Director, Tony Tseng and [ Ivan ]. Today, we would like to extend a special welcome to our newly appointed CFO, Ms. Jane Chen. Jane, would you please say hello again for those who didn't understand what we said earlier in Mandarin?
Hi, everyone. This is Jane.
Okay. Thank you, Jane. Welcome on board.
Thank you.
The agenda for today's event is as follows: First, Tony will report on Novatek's fourth quarter results in English. Following that, our Vice Chairman, Steve Wang, will provide further details on our fourth quarter results and guidance for the first quarter of 2026. Next, we'll proceed with the Q&A session.
We have already received some questions from our investors. If you have any additional questions, please feel free to submit them online. Tony will review and read each question in both Chinese and English. Afterwards, our Vice Chairman, Steve Wang; and CFO, Jane and myself will try to answer all your questions in Chinese. I'll later translate them into English. We do encourage all of you to participate actively and look forward to addressing your concerns.
Now I'll hand over the time to Tony to report our Q4 results.
Thank you, David. This is Tony. First, please take a look at our safe harbor notice. Also from this page, we will show our quarter 4 financial figures. But please bear in mind all these figures are unaudited and will be reviewed by the auditors and also our Board of Directors.
Let's first look at our revenues. For quarter 4, our consolidated revenue of TWD 22.8 billion were down 7% quarter-over-quarter and also down 10% year-over-year, but at the high end of our guidance of TWD 22 billion to TWD 23 billion.
Now this page shows our gross profit for quarter 4 and also the comparison. Gross profit of TWD 8.7 billion in quarter 4, also down 32% quarter-over-quarter from quarter 3 2025, also down 13% year-over-year from a year ago.
Now let's look at our gross margin. For quarter 4, gross margin of 38.2% was down from 39.5% a year ago, but improved from 36.9% in quarter 3 last year and also exceeded our guidance of 35% to 38% range.
Now let's look at our operating expense. For quarter 4 operating expense of TWD 4.85 billion was down 4% quarter-over-quarter and also 4% year-over-year, showing our good cost control.
Now let's move down to see our operating income. For quarter 4, our operating income of TWD 3.86 billion was flattish quarter-over-quarter, but down from TWD 4.9 billion a year ago.
Now this page shows the operating margin trend. For quarter 4, the operating margin of 16.92% was down from a high level of 19.46% a year ago, but improved from 15.70% in quarter 3 and also made the guidance of 14.5% to 17.5%.
Now let's look at our net income. Net income in quarter 4 reached TWD 3.69 billion, increased 1% year-over-year, but down from -- quarter-over-quarter, but down from TWD 4.08 billion a year ago.
This page shows our EPS. For quarter 4, our EPS of TWD 6.07 increased from TWD 6.01 in quarter 3, 2025, but down from TWD 7.89 a year ago.
This page shows the overall income statement for quarter 4, along with the comparison with quarter 3 and also a year ago 2024.
Now this page shows the full year of 2025 results compared with those for 2024. For revenues, we reached TWD 100.7 billion, down 2% quarter-over-quarter. Gross -- year-over-year gross profit of TWD 37.9 billion was down around 9% year-over-year.
Operating expense of TWD 19.67 billion was flattish year-over-year. Operating income of TWD 18.24 billion was down from TWD 21.81 billion. Net income of TWD 16.35 billion was also down from TWD 20.34 billion a year ago. As for EPS, 2025 reached TWD 26.87, down from TWD 33.43 a year ago.
This page shows our product mix for our 3 business groups. Small medium drivers, SoC and the large-size drivers represented 43%, 35% and 22% of quarter 4 revenues. This compared with 41%, 37% and 22% in quarter 3, 2025 and also 21%, 36% and 22% in quarter 4, 2024. Basically, the percentage has been relatively stable across the quarter.
We are also reporting the general revenues now. General revenue of TWD 7.62 billion, increased 4% month-on-month but down 10% year-over-year due to a high base a year ago due to the China subsidy policy.
The next page shows the monthly revenue trend for 2025 and 2024. For here, you can see the monthly trend for 2025. Again, due to the China subsidy program particularly in the first half for last year, our first half revenue was higher than in the second half.
This page shows our key financial figures in our balance sheet. For our cash position, basically, our cash increased sequentially due to our positive earnings from operations, but quarter 3 is always down quarter-over-quarter due to distribution of cash dividend. Our account receivable inventory dollar has been relatively stable.
Now let me pass the call back to David on our ESG activity.
Thank you, Tony. The following slide is a recap of our recent major events. Regarding the biodiversity, we have signed MoU with Yushan National Park to support Formosan Black Bear Conservation Education. We've been collaborating with Yushan National Par for the past 2 decades, and we are just expanding our collaboration to biodiversity, which is a good move.
And as for the CDP for 2025, we are delighted to show you that our climate change has moved from B to A- and maintaining a water security at B level. We have also completed our product carbon footprint inventory verification for our SoC chips. And our renewable energy have reached 24.2% in 2025. And we also achieved an outstanding enterprise for promoting workplace gender equality. And we have also received excellent Leadership Award for 2025 Buying Power. And also the Novatek Foundation also wins the Ministry of Education 3rd Youth Volunteer Award for outstanding promoter. And we also passed the TIPS, Taiwan Intellectual Property Management System for the third consecutive year. And for more information on our ESG, please visit our website.
And now I'll turn over the call to our Vice Chairman, Mr. Steve Wang, to provide us more details on our Q4 results and Q1 guidance.
[Foreign Language]
Hello, everyone. Tony has already reported our Q4 results. And our Q4 revenue were TWD 22.82 billion, Q-o-Q declined by 7.15%. And this revenue decreased by the 7.15% is mainly due to the consumer market low season, but actually, it reached the upper end of our guidance. And as for Q4 margins, it reached 38.19%, which is up Q-o-Q by 1.9 percentage points. Also, this exceeded our guidance. And this is mainly due to favorable ForEx and positive product mix.
Looking ahead of 2026, tight memory supply and rising memory price will require close monitoring as they may lead to higher end product pricing for consumer electronics and a potential impact for market demand, especially on the smartphone and PC product line. And as for Novatek, we'll continue to diversify beyond driver applications with a particular focus on image and machine vision products integrated with the AI capabilities for numerous edge AI applications. And we have invested quite resources into all these areas. And in Q1, due to the traditional Lunar New Year holidays and the reduced number of working days, Novatek expects our revenue to be as follows: the revenue will be TWD 22.2 billion to TWD 23.2 billion, and this is at an exchange rate of USD 1 to TWD 31.2. And the gross margin is expected to be around 36% to 39%. The operating margins between 15% to 18% range.
Thank you, Steve, for the Q1 guidance. Next, we'll move on to Q&A sessions. Please be reminded if you have any questions that we'll be covering. And if it's not included there, and you can send them to us online. Okay. Now I'll hand over the time to Tony. Please go through some of the questions that you already have on hand.
[Interpreted] Could management share the view on the sequential trend across major applications in terms of order flow into first quarter?
[Foreign Language]
[Interpreted] According to the panel production base across major applications into Q1, what we see here is that TV is slightly down and monitor is also expected to be down Q-o-Q. And as for notebook, it is expected to be up as brand OEMs are pulling in earlier, while tablets are flattish. As for mobile phone, we are expecting it to be down Q-o-Q. This is mainly due to the tight supply of memory and the rising price. And as for automotive, it should be flattish.
[Interpreted] Consequently, could you also provide your quarterly revenue trend into first quarter across 3 business groups?
[Foreign Language]
[Interpreted] As for the 3 main business groups, what we are seeing here is the SoC will be up the most. This is mainly due to strong demand on imaging and machine vision, edge AI related. And following that will be our large driver IC, which will also increase quarter-on-quarter, and this is mainly due to the demand from notebook products. As for the small, medium-sized driver, we are expecting it to decrease, as mentioned earlier, mainly due to the high memory price, which really impacted the smartphone demand. And while for the tablets and automotives, we're expecting it to be flattish.
[Interpreted] Could you maintain your 2026 revenue outlook with a positive growth, if any major growth driver? Also, you have mentioned about memory price. Could you also comment on the impact?
[Interpreted] Given the current memory shortage and price increase, we definitely should closely monitor the effects on electronic end user price and also the market demand. And for Novatek actually, we will launch new products across different lines, particularly high-end devices such as the OLED TDDI for foldable phones and imaging and machine vision for edge device, AI device and also the high-end gaming monitor. So we are expecting these products to contribute to the revenue growth in 2026.
[Interpreted] For your advanced ASIC progress, given your 4-nanometer test chip was released in quarter 4 last year, could you update the progress of time table? Could you also recognize revenue either by the end of this year or sometime next year?
[Foreign Language]
[Interpreted] Our [ 4-nano HPC POC ] demo system is basically still under development. And we do not expect any revenue contribution from advanced node ASIC in the near term. But we do aim to leverage the ARM CSS ecosystem together with the leading process technologies and also the advanced packaging and to integrate the high-speed interface and also the system integration expertise altogether to offer flexible ASIC design services for the various applications that meet our customers' diverse requirements.
[Interpreted] Could you provide some update on your view regard with Edge PC and notebook PC?
[Foreign Language]
[Interpreted] Demand for Edge AI PC and notebook has not picked up as fast as we expected. But Novatek believes that maximizing AI application with AI PC and notebook is still the future trend, especially as we see that in future we will have the human and machine interaction will become more and more important. And a lot of these features will be integrated into the AI PC and notebook.
[Interpreted] About SoC product lines, which one has the best visibility of growth opportunity for your company in 2026? And also, could you give us a little bit more color on the growth driver?
[Foreign Language]
[Interpreted] We are continuously introducing imaging and machine vision products with the embedded AI for multiple edge AI cases of, for example, smart home, vacuum robots, drones, action cameras, smart glasses, et cetera. The customers' reactions have been pretty favorable, and these offerings are likely to bolster future SoC revenues. And we do expect the portion of SoC revenue related to AI-enabled products should grow each year.
[Interpreted] About driver IC product line, which one has the best visibility of growth opportunity for the company in 2026? And could you also give a little bit more color in terms of growth drivers?
[Foreign Language]
[Interpreted] As for the DDIC product line, we're launching numerous new products in 2026, including OLED TDDI for foldable phones, OLED DDIC for high-end smartphones and also OLED driver IC for IT product line and also the automotive TDDI, all of which will definitely generate revenue momentum.
[Interpreted] As for your efforts in customer diversification, could you also provide update on DDIC in terms of opportunity and the challenge particularly about your OLED product?
[Foreign Language]
[Interpreted] To further diversify customer base and application is one of our major and long-term targets. And regarding OLED, the development and shipment of projects related to the new customers basically are progressing smoothly, and they are expected to contribute to near-term 1 to 2 years DDIC product revenues.
[Interpreted] With multiple OLED TDDI, could you give us the shipment units for 2025? And also any shipment target for this year 2026? Could you also update us on the progress and the customers' expansion?
[Foreign Language]
[Interpreted] The shipments for OLED TDDI for 2025 actually exceeded 10 million units, higher than our expectation. Given the addition of new customers and new model launch, shipment for 2026 are expected to grow Y-o-Y.
[Interpreted] Quarter 4 gross margin exceeded the guidance of 35% to 38% and increased by 190 basis points sequentially. While those are positive factors, could you also comment on the impact on gold and the memory side?
[Foreign Language]
[Interpreted] Yes. I mean our Q4 margin did improve by 1.9 percentage points. And this sequential improvement came from favorable ForEx and also positive product mix.
[Interpreted] According to your positive gross margin guidance for the first quarter, what are the major positive factors, particularly given the rising cost pressure on gold and memory prices?
[Foreign Language]
[Interpreted] Yes, the rising gold price and memory price does have impact on our cost. And despite this, we are taking multiple actions to improve our gross margin, such as the reduction of gold consumption, the replacement of gold with alloy and also negotiations with customers to reflect higher costs. And last but not the least, we are also trying to improve our product mix and also new product launch to improve our margins.
[Interpreted] Could management provide a sensitivity analysis of gold and memory price on your gross margin?
[Foreign Language]
[Interpreted] Basically, the -- each product cost structure actually differs. And Novatek will dynamically negotiate with customer to reflect the cost.
[Interpreted] Would you share the situation in the supply chain, such as which part is in tight supply, such as the foundry, packaging and other parts?
[Foreign Language]
[Interpreted] Yes, you're right. I mean KGD, Known Good Die, substrate materials and also the logic testers and also the ABF substrate are currently tight in supply and have longer lead times. And that said, Novatek has long-standing partnerships with the supply chain to deal with these changes.
[Interpreted] Could you update the pricing mechanism of the supply chain at this moment? How about the growth trend into the second quarter compared with first quarter? And could you also even share some preliminary view for your gross margin in 2026 compared with 2025?
[Foreign Language]
[Interpreted] Well, due to the current tightening in the supply of certain materials and rising costs, Novatek will continue to negotiate dynamically and with our customers, and we'll try to pass on the cost and based on the market supply and demand conditions. And also, we'll continue to take actions to reduce the cost.
[Interpreted] Major items for nonoperating income of TWD 554 million in quarter 4 compared with TWD 518 million in quarter 3.
[Foreign Language]
[Interpreted] The nonoperating income of TWD 554 million in the fourth quarter came from ForEx gains of TWD 176 million, dividend income of TWD 93 million and also interest income of TWD 219 million.
[Interpreted] What are your inventory days in quarter 4 compared with those in quarter 3. Could you also provide the trend into the first quarter? Could you also provide more color on the inventory days or trend for some key raw materials at this moment, such as KGD, gold and even other key components?
[Foreign Language]
[Interpreted] Inventory days for fourth quarter were 59 days, flattish compared with the third quarter. And we expect inventory dollars at the end of Q1 to be slightly up Q-o-Q due to selective component rising costs, but should be still at the healthy level. And as for these selective key components, Novatek will continue to manage inventory level and costs through a long-term sourcing strategy and supply chain management and also product optimization.
[Interpreted] Given your operating expense dollar in 2025 was similar to that in 2024, how about the trend into 2026 compared with 2025?
[Foreign Language]
[Interpreted] The OpEx dollars in 2026 is expected to grow slightly from 2025 last year. And this is due to the increase in R&D and also the reinforcement of key talent.
[Interpreted] Given your tax rate of 16.3% for 2025, in line with your earlier guidance of 16% to 17%, what's your guidance for first quarter of 2026 for tax rate?
[Foreign Language]
[Interpreted] The tax rate guidance for 2026 is at the range of 16% to 17%, which should be similar to 2025.
Tony, did you cover all the questions? So we'll just go through and see if there's any further questions that we haven't yet covered.
I think the first question, as we mentioned about a very good momentum in both first quarter and 2026 coming from some image and the machine vision device. So investors wonder if this is existing product or is coming from new product launch.
[Foreign Language]
[Interpreted] Okay. As Tony already used [indiscernible] to ask the questions. And basically, the momentum that we just mentioned about the imaging and some machine vision, some of these products, actually, we've been working on it for a while. And some of the products that we mentioned earlier, it's already in mass production. And what we are doing is we are adding our imaging product and add to it some of the AI functions for some of those edge devices. And we are launching more new products in the future.
[Interpreted] The question is more about the impact on DRAM price on TV SoC. Wanted to know how we can mitigate the DRAM cost inflection on our TV SoC products.
[Foreign Language]
[Interpreted] Well, as you know, for the TV SoC, the KGD is supplied by our supplier. And so we'll try to reflect the cost to our customer. On the other hand, at the same time, we're also trying our best from the system level to minimize the memory size to reduce the cost.
I think we have covered most of the questions that -- okay. Thank you so much, and we'll end our Q4 investor conference here. And thank you, all of you, for joining in and wishing you all a very happy and fruitful year of the horse. Thank you.
[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]
Novatek Microelectronics — 2025 Earnings Call
📊 Quarter at a Glance
- Revenue: Q4 revenue of TWD 22.82B, down 7.15% QoQ and 10% YoY; at the high end of guidance (22–23B).
- Gross Margin: 38.19% in Q4, up 1.9pp QoQ; above prior year and within guidance of 35–38%.
- Operating Margin: 16.92% in Q4; down vs 19.46% a year ago, but inside the 14.5–17.5% guidance.
- Net Income / EPS: Net income TWD 3.69B; EPS TWD 6.07; modest QoQ decline, slight YoY improvement.
🎯 What Management Says
- Q4 performance: Revenue at the upper end of guidance; margin benefited from favorable forex and product mix.
- Strategic shift: Accelerate diversification beyond driver IC into imaging, machine vision and edge AI; launch high-end products (OLED TDDI for foldables) and AI-enabled lines.
- 2026 plan: Growth supported by new products and disciplined cost control; monitor memory pricing and end-market demand.
🔭 Outlook & Guidance
- Q1 Revenue: Guidance of TWD 22.2–23.2B; exchange rate assumed USD1 = TWD 31.2.
- Margins: Gross margin 36–39%; Operating margin 15–18%.
- Risks: Memory price volatility, rising gold costs, Lunar New Year seasonality, and supply-chain tightness could affect margins and volumes.
❓ Analyst Q&A
- Topics: Order-flow by application into Q1; timing of 4-nm ASIC revenue; margin sensitivity to gold and memory prices with supply-chain context.
⚡ Bottom Line
Novatek delivers solid Q4 results with margins above guidance and revenue at the high end of expectations. The strategic pivot toward imaging, edge AI and OLED-enabled products aims to sharpen 2026 growth, but margins face near-term pressure from memory and gold costs plus supply-chain dynamics. Shareholders should watch product launches, end-market demand, and cost management as keydrivers of next year’s performance.
Disclaimer: This analysis was generated with AI. AI can also make mistakes. This is not investment advice.
Novatek Microelectronics — Q3 2025 Earnings Call
1. Management Discussion
[Interpreted] Good afternoon, everyone. I would like to extend a warm welcome to everyone for joining Novatek 2025 Third Quarter Online Earnings Call. This is David, Vice President and Company Spokesperson. I'll be the host for today's conference. Joining me on the call are Vice Chairman, Mr. Steve Wang; and our AVP, Mr. Chou; and IR Director, Tony and [ Ivan ].
The agenda for today's event is as follows: first, Tony will report on Novatek's third quarter results in English. Following that, our Vice Chairman, Steve will provide further details on our Q3 results and guidance for the fourth quarter of 2025. Next, we'll proceed with the Q&A session.
We've already received some of the questions from our investors. If you have any further questions, please feel free to submit them online. Tony will review and read them one by one in both Chinese and English. And afterwards, we'll try our best to answer all your questions in Chinese and later on translate it into English. We encourage your active participation and look forward to addressing your concerns.
Now I'll hand over the time to Tony to report our Q3 results.
Thank you, David. Good afternoon. This is Tony. First, please take a look at our safe harbor notice. Now this page shows our consolidated sales for quarter 3. Our quarter 3 revenue of TWD 24.57 billion, down slightly quarter-over-quarter and also year-over-year, but in the high end of our guidance of TWD 23.7 billion to TWD 24.7 billion. Next.
In terms of gross profit, our gross profit of TWD 8.9 billion in quarter 3 is also down quarter-over-quarter 6% and 19% year-over-year.
Now moving to our gross margin trend. For quarter 3, our gross margin of 39.29% was flattish compared with 33.3% in the second quarter, but down from 39.74% a year ago. Sorry, flattish compared with 36.3% in the second quarter, but down from 39.74% a year ago. But again, that's actually in line with our guidance of 34% to 37%. Next.
Now moving to our operating expense. Operating expense of TWD 5.06 billion both increased quarter-over-quarter and year-over-year by 8% and around 5% year-over-year. Next.
Now moving to the operating income. For quarter 3 operating income of TWD 3.86 billion decreased 20% quarter-over-quarter and 38% year-over-year.
Now let's take a look at our operating margin. For quarter 3, our operating margin of 15.7%, down from 18.44% in second quarter and 22.4% a year ago, but still in line with our guidance of 15% to 18%.
Now let's take a look at our net income. For net income of TWD 3.66 billion in quarter 3, is down 2% quarter-over-quarter and also down from TWD 5.26 billion a year ago.
Now let's take a look at our EPS. For quarter 3, our EPS of TWD 6.01 is down from TWD 6.14 in quarter 2 and also down from TWD 8.64 a year ago.
On this page shows our income statement for quarter 3 compared with the figures in the second quarter as well as a year ago. As we highlighted earlier, you can see the revenue, gross profit, operating expense, operating income as well as net income and EPS at this page.
This page shows our income statement for the first 3 quarters compared with the same period a year ago. Overall speaking, the revenue is flattish year-over-year. Gross profit is down slightly year-over-year and operating expense is roughly flattish, but operating income and the net income down slightly over 10% year-over-year and with TWD 20.8 EPS for the first 3 quarters.
Now this page shows our revenue breakdown for our 3 key business group. For the quarter 3 the small medium-sized driver remain our largest group with 41% of revenue, slightly up from 40% in the second quarter. SoC business still accounting for 37% of quarter 3 flattish compared with second quarter in terms of percentage. Lastly, in terms of the large-sized driver, the percentage came down to 22% in quarter 3 from 23% in second quarter.
We are also reporting our October revenue. October revenue of TWD 7.88 billion is down both year-over-year and month-on-month in single digits. For the first 10 months, the cumulative revenue of TWD 85.7 billion is roughly flattish compared with the same period a year ago. And also the table also shows the revenue breakdown for October for both SoC and the driver IC.
The next page shows the monthly revenue trend for 2024 and the first 10 months of 2025.
This page shows some key figures for our balance sheet. The cash and the cash equivalent of TWD 39.6 billion is down both quarter-over-quarter and year-over-year. The sequential decline mainly caused by the distribution of cash dividend. Account receivable and inventory is roughly flattish both quarter-over-quarter and year-over-year at a healthy level.
Now let me pass the call back to David.
Thank you, Tony. The following slide is a recap of our recent major events. Novatek MSCI ESG rating has been upgraded from BB to BBB mainly because of the recognition of our efforts in corporate governance and particularly Board practices. And Novatek has also been awarded the excellence in Corporate Social Responsibility Award, advancing from last year's 18th position to #9 this year. And we have also received the following awards from Commonwealth Magazine like the Talent Sustainability Award, Family-Friendly Workplace Award and there's various other awards. Please visit our website for more information on our ESG achievement. .
And now I'll turn over the call to our Vice Chairman, Mr. Steve Wang, to provide us more details on our Q3 results and Q4 guidance. Please, Steve.
[Foreign Language]
The Q3 revenues reached TWD 24.57 billion, quarter-on-quarter declined by 6%. And the decrease by 6% basically still reached the upper end of our guidance, and this is mainly due to the appreciation of NT dollars and as well as the fading effect of China's subsidy policy and U.S. tariff. And the Q3 gross margin was 36.29% quarter-on-quarter kind of flat. Q4 is a low season for consumer product and IT industry. Therefore, we expect our Q4 revenue to decline. Basically, we are also seeing the panel makers, they are controlling the production.
In the first half, the consumer electronics market benefited from early purchase driven by Chinese government subsidies and advanced shipments in response to U.S. tariff policy. And this has basically changed the normal seasonality, resulting in the second half weaker than the first half. And based on the above, our 2025 Q4 guidance will be as follows: revenue will be from the range of TWD 22 billion to TWD 23 billion with the exchange rate of $1 to TWD 30.5 and gross margin will be between 35% to 38% range, and operating margins will be around 14.5% to 17.5% range.
Thank you, Steve. Now we'll move on to Q&A session. Please be reminded if you have any questions that you would like to ask, you can send them online. And we'll proceed with some of the questions we already received. Tony, please go ahead with some of the questions that we already have.
[Interpreted] Could management share the view on the sequential trend across major applications in terms of order flow into quarter 4 this year?
[Foreign Language]
[Interpreted] The following is the major applications demand in Q4 based on the panel production. What we are seeing is that TV is slightly down and monitored due to the low season will also be down quarter-on-quarter. Demand on notebook is down a little bit more after the inventory buildup in third quarter, but with the limited replacement. But we are seeing the tablets Q-o-Q are up. As for the demand for mobile phones in China is basically flattish as the -- we are also seeing the sequential increase of TDDI, but it's offset by the downtrend of the OLED orders. And as for the automotive, we're seeing it kind of flattish Q-o-Q.
[Interpreted] Consequently, could you also provide your quarterly revenue trend across 3 business groups?
[Foreign Language]
[Interpreted] The small and medium driver IC in Q4 will decrease at a milder rate basically supported by smartphone TDDI. And also we've seen the tablets also, as mentioned earlier, it's expecting to grow Q-on-Q. While OLED smartphone, we expect to decrease quarter-on-quarter. Revenue from automotive will be flat, but we are seeing the automotive TDDI shipment will increase quarter-on-quarter. And following the small medium driver IC will be the SoC. Basically, it is affected by inventory adjustment of TV SoC and also the gaming monitors. But we are expecting imaging-related SoC to increase quarter-on-quarter, basically because of the multiple applications demand that we are seeing at this moment. And as for the large driver IC, this product line will decrease the most. And this is basically due to the boost from subsidies and tariffs has tapered off and has led to lower demand for large-sized panels.
[Interpreted] Could you also provide the preliminary outlook for first quarter of 2026 in terms of the revenue or your major products?
[Foreign Language]
[Interpreted] Given the multiple challenges from geopolitics and tariffs, demand on consumer electronics remains uncertain and needs to be monitored carefully. But Novatek will be launching numerous new products next year. And hence, we believe our revenue will grow steadily in 2026. And furthermore, demand for edge devices with AI capability is beginning to emerge and replacement demand is projected to occur in 2026 with the integration of touch functions and various other functions.
[Interpreted] Given your licensing agreement with Arm last year, could you also share with us our ASIC progress in terms of direction of node process applications and the customers?
[Foreign Language]
[Interpreted] Well, as mentioned previously, the cooperation with Arm at Neoverse platform, it's the extension of Novatek's ASIC business in preparation for customers' future needs. And Novatek to complete the [ full ] nano HPC POC demo system by the end of 2025. But we do not expect any revenue contribution this year. The -- what we are aiming at is to leverage the Arm CSS ecosystem and TSMC's advanced process and packaging support to offer flexible ASIC design services basically customized for various applications and fulfilling customers' diverse the requirements.
[Foreign Language] What percentage of SoC revenue do AI-enabled product account for at this moment? Could you also provide some color on how they can differentiate your product or enhance the competitiveness?
[Foreign Language]
Well, what Steve just mentioned is that by integrating our proprietary high performance, low-power AI accelerator like the TPU and NPU and also the tool change into our various SoCs, we provide customers with improved audiovisual experience and user engagement while enabling edge AI applications, including machine vision, smart home and surveillance back ends. And these are some of the AI-related functions that we have designed into our SoC product. And product with integrated AI functions at this moment, roughly accounts for 20% of our SoC revenue, and we are anticipating the future revenue to continue to grow related to the AI product.
[Interpreted] Given the popularity of the social media, along with various new form factors of cameras, will this make contributions to your image SoC business?
[Foreign Language]
[Interpreted] Driven by the surge in the social media usage, demand for vlog AI camera basically has increased. And our imaging division has been working very closely with numerous brand partners and unit shipments are gaining momentum at this moment. And we expect related product revenue to grow in 2026.
[Interpreted] For smartphone OLED TDDI, first question, do you still maintain a shipment target of over 10 million units for 2025? Two, could you also update the progress at the customers' expansion? And three, will this be positive to your market share among handset OEMs in China?
[Foreign Language]
[Interpreted] Well, our customers have started the OLED TDDI mass production as scheduled, and we mentioned earlier, it's pretty much on track. And we expect this year's shipment to exceed 10 million, and there shouldn't be any problem. We're also expecting new clients to commence evaluation and deployment next year. And we also anticipate that the OLED TDDI adoption will have a favorable impact on Novatek's market share within the China smartphone segment, and this should be a very positive trend for Novatek.
[Interpreted] As for your effort in customer diversification, could you also provide updates on your customer in the state in terms of smartphone OLED driver IC shipments or revenue contribution?
[Foreign Language]
[Interpreted] It is our goal to continue to diversify customer base and applications. And the mobile OLED TDDI shipment and new project development are very much on track. And basically, it's a long-term strategic partnership.
[Interpreted] Additionally, could you also provide updates on your customers on panels in Korea or handset OEMs outside of China?
[Foreign Language]
[Interpreted] As mentioned earlier, for us, we'll continue to expand our customer base and applications. And as for the progress with the panel customer in Korea and the non-China handset OEM, at this moment, it is proceeding smoothly and positively. And as a result, our shipments are expected to begin in early 2026.
[Interpreted] Could you provide updates on the deployment of shares and OLED product outside of smartphones? And any thoughts on the adoption of OLED panels next year after the mass production of new 8.5 generation OLED panel line?
[Foreign Language]
[Interpreted] Smartphones remains as the primary OLED applications and the penetration into other areas such as TV, notebook, gaming monitor, automotive is still low and concentrated at the high-end products. However, Novatek has developed related products, and some of them are already in mass production and expect the shipment to increase next year. And then we have some new products that's still under development.
[Interpreted] Third quarter gross margin was at the high end of the guidance and flattish quarter-over-quarter by how much has FX affected your gross margin and any other factors?
[Foreign Language]
[Interpreted] The ForEx continued to appreciate in third quarter versus second quarter and then stabilize later on. And it's reducing its effect on gross margin for the quarter. The other factors that impacted our margins were the increase in gold price.
[Interpreted] According to the gross margin guidance for quarter 4, how much is affected by FX and any other factors?
[Foreign Language]
[Interpreted] We expect Q4 gross margin to be between 35% to 38%. And given the recent stable exchange rate, we do not anticipate any material impact from the foreign exchange movements. The further rise of gold price and the KGD which is called the known good die will be negative to gross margin.
[Interpreted] Should you expect the gross margin to improve in 2026? And what are the major swing factors for your gross margin? Could you also provide trends for foundry and packaging costs into 2026?
[Foreign Language]
[Interpreted] The revenue growth and gross profit margins basically are the 2 key index for Novatek's management that we really focus on. And factors influencing -- impacting our gross margins are basically the currency appreciation, if there is any, and the gold price trend and the shortage of certain raw materials like the known good die or the substrate. And at this moment, we are working closely with our suppliers to jointly manage the rising wafer and packaging and testing costs. And at the same time, we also seek our customers' understanding and to pass on the increasing cost of raw materials to our customers at the right timing.
[Interpreted] What are major items for the nonoperating income of TWD 518 million in quarter 3 compared with loss of TWD 221 million in the second quarter?
[Foreign Language]
[Interpreted] The non-op income of TWD 518 million in third quarter actually came from a ForEx gain of TWD 249 million and interest income of TWD 222 million.
[Interpreted] Inventory dollar of TWD 9.2 billion in quarter 3 increased slightly from the level of second quarter. While your inventory days in quarter 3, could you also provide some comments into the quarter 4?
[Foreign Language]
[Interpreted] Inventory days for third quarter were 59 days, up by 1 day from 58 in the second quarter. And we're expecting inventory dollar at the end of fourth quarter to be at the same level as third quarter and should be still at the healthy level.
[Interpreted] What are the major factors for operating dollar up by 8% quarter-over-quarter in quarter 3? Also given the 1% year-over-year increase for operating dollar for the first 3 quarters, where operating expense in 2025 increased year-over-year?
[Foreign Language]
[Interpreted] The operating expense dollar in the third quarter increased sequentially by TWD 391 million from second quarter. And basically, it is due to higher R&D spending. And based on the fourth quarter revenue guidance, our operating expense dollar in 2025 should be similar to those in 2024.
[Interpreted] What are the major factors for higher tax rate of 16.5% in quarter 3, slightly up from 16.2% in the first half. Did you maintain the tax rate guidance of 16% to 17% for the full year of 2025?
[Foreign Language]
[Interpreted] The tax rate of 16.46% in third quarter was marginally higher than 16.2% in the first half. And the tax rate guidance for 2025 is unchanged and should be around 16% to 17% range.
Tony, is there any further questions? We have covered most of them and see if there's any other questions that we haven't yet covered.
[Interpreted] There is some follow-up question about the progress of Novatek AI-related ASIC. Could management provide more color on this business?
[Foreign Language]
[Interpreted] Basically, as you know, the AI-related ASIC is pretty much very broad application. There's a lot of applications, and we're working very closely with our customers. And we are targeting various applications, not just the server side. So currently, we're working with various customers to explore various opportunities.
[Interpreted] So there's some follow-up about the cost structure, particularly for the key materials such as memory. Could management also tell us how you react to the recent surge on the memory price and other related key components?
[Foreign Language]
[Interpreted] As you know, the KGD pricing going up and basically is a result of supply and demand issues. And for us, we'll work closely with our customers and to manage the cost together and at appropriate time, we'll pass on the cost.
[Interpreted] The next question is about the smartphone OLED driver. Could you also give more color in terms of the ASP trend and the competition?
[Foreign Language]
[Interpreted] Well, for the OLED driver for the low-end product line, we do see some pricing pressure in that area. But for Novatek, what we are doing is we are trying to add value to our product. For example, TDDI -- OLED TDDI and also adding some extra functions to our driver to add value to our customers. And also, for example, the foldable OLED phone.
Okay. It seems that there aren't that many other questions that we didn't cover. So we'll end our investor conference. At this point, thank you so much for joining in. See you next quarter.
[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]
Novatek Microelectronics — Q3 2025 Earnings Call
📊 Quarter at a Glance
- Revenue: TWD 24.57B, -6% QoQ and down YoY; within guidance of 23.7–24.7B.
- Gross Margin: ~36% (Q3), flat QoQ; in line with guidance of 34–37%.
- Operating Margin: 15.7%; below prior year but within guidance of 15–18%.
- Net Income: TWD 3.66B, -2% QoQ; down from TWD 5.26B a year ago.
- EPS: TWD 6.01, down from 6.14 QoQ and 8.64 YoY.
🎯 What Management Says
- Q4 Guidance: Revenue 22–23B, gross margin 35–38%, operating margin 14.5–17.5%, reflecting seasonality and macro headwinds.
- AI/ASIC Strategy: Extend Arm Neoverse collaboration; complete nano HPC POC by end-2025 with no 2025 revenue expected, aiming for flexible, customer-specific ASIC design services.
- OLED TDDI & Growth: OLED TDDI shipments above 10M in 2025; expanding to Korea and non-China handset OEMs in 2026; focus on value-added features.
🔭 Outlook & Guidance
- Guidance snapshot: Q4 revenue 22–23B, GM 35–38%, Op Margin 14.5–17.5%; FX deemed unlikely to materially affect margins; risks include currency moves, gold price, KGD costs, tariffs, and demand volatility.
❓ Analyst Q&A
- Order flow & mix: TV/monitor demand softening; tablets up modestly; automotive flat; OLED TDDI upside supports SoC mix into Q4/Q1 2026.
- AI ASIC progress: Broad applications with Arm/Neoverse; 2025 POC; no revenue in 2025; future growth tied to ecosystem and customer uptake.
- Margins & costs: FX impact limited in Q4; manage higher gold/KGD costs via supplier cooperation and selective pass-through.
⚡ Bottom Line
Novatek shows near-term softness driven by seasonality and macro headwinds, but maintains a deliberate growth path through AI-enabled SoCs, ASIC collaboration, and OLED TDDI expansion. With 2025 Q4 guidance modestly down yet revenues leveraged by new products, the stock centers on execution of AI/ASIC projects and broader geographic diversification to drive 2026 growth.
Disclaimer: This analysis was generated with AI. AI can also make mistakes. This is not investment advice.
Financial data from Novatek Microelectronics
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 99,196 99,196 |
7%
7%
100%
|
|
| - Direct Costs | 60,368 60,368 |
7%
7%
61%
|
|
| Gross Profit | 38,828 38,828 |
6%
6%
39%
|
|
| - Selling and Administrative Expenses | 2,911 2,911 |
0%
0%
3%
|
|
| - Research and Development Expense | 17,490 17,490 |
6%
6%
18%
|
|
| EBITDA | 18,428 18,428 |
16%
16%
19%
|
|
| - Depreciation and Amortization | 216 216 |
26%
26%
0%
|
|
| EBIT (Operating Income) EBIT | 18,212 18,212 |
16%
16%
18%
|
|
| Net Profit | 17,440 17,440 |
9%
9%
18%
|
|
In millions TWD.
Don't miss a Thing! We will send you all news about Novatek Microelectronics directly to your mailbox free of charge.
If you wish, we will send you an e-mail every morning with news on stocks of your portfolios.
Company Profile
Novatek Microelectronics Corp. engages in the design, development, and sales of display driver integrated circuit (IC) and system on a chip (SoC) solutions. The company is headquartered in Baoshan, Hsinchu. The company went IPO on 2001-04-24. The firm's main products include flat-panel display drive wafers and system-on-chip (SOC) wafers. Flat-panel display drive wafers mainly include large-size liquid crystal display (LCD) and active matrix organic light-emitting diode (AMOLED) panel drive wafers, LCD touch and touch controller and display drive integration (TDDI) and AMOLED drive wafers for mobile phones, and automotive panel drive wafers. SOC wafers include LCD panel timing control wafers, digital TV system control single wafers, LCD monitor control wafers, motion estimation and motion compensation (MEMC) image processing wafers, driving recorders, image sensor wafers for reversing display, security control wafers, image sensor wafers for external computer cameras.
StocksGuide Premium
| Head office | Taiwan |
| Employees | 2,653 |
| Website | www.novatek.com.tw |
