Diodes Incorporated — Third Quarter 2026 Earnings Summary

Financial Performance

• Revenue reached $532.6 million, a 35.8% year-over-year increase from $392.2 million in Q3 2025 and a 19.5% sequential increase from $445.5 million in Q2 2026.
• GAAP gross profit was $192.5 million (36.1% margin), up from $120.5 million (30.7% margin) in Q3 2025 and $147.6 million (33.1% margin) in Q2 2026.
• Non-GAAP gross profit was $192.9 million with a 36.2% margin, excluding $0.4 million of inventory accounting related to the ElevATE acquisition.
• GAAP net income was $43.7 million ($0.95 diluted EPS), compared to $14.3 million ($0.31 diluted EPS) in Q3 2025 and $46.6 million ($1.00 diluted EPS) in Q2 2026.
• Non-GAAP adjusted net income was $54.5 million ($1.18 diluted EPS), a 219% increase from $17.2 million ($0.37 diluted EPS) in Q3 2025 and a 68.6% increase from $32.5 million ($0.70 diluted EPS) in Q2 2026.
• EBITDA was $89.7 million (16.8% of revenue), compared to $46.6 million (11.9% of revenue) in Q3 2025 and $83.5 million (18.7% of revenue) in Q2 2026.
• Cash flow from operations was $97.2 million; free cash flow was $43.9 million after $53.2 million in capital expenditures.
• Net cash flow was positive $134.1 million, including approximately $35 million used for the stock buyback program.
• GAAP operating expenses were $129.1 million (24.2% of revenue), compared to $108.9 million (27.8% of revenue) in Q3 2025 and $114.3 million (25.6% of revenue) in Q2 2026.

Guidance and Future Outlook

• Full-year 2026 revenue is expected to increase approximately 30% over 2025 at the mid-point.
• Fourth quarter 2026 revenue is expected to be approximately $550 million (±3%), representing a 40.4% year-over-year increase and a 3.2% sequential increase at the mid-point.
• Fourth quarter 2026 non-GAAP gross margin is expected to expand to 37.0% (±1%).
• Fourth quarter 2026 non-GAAP adjusted EPS is expected to be $1.35 (±$0.10).
• Management anticipates continued growth driven by new product initiatives, market share gains, and increasing content at customers.

Business Segments and Product Lines

• Automotive revenue reached record levels, driven by continued market share gains.
• Industrial applications showed stronger demand across broad segments.
• Computing market revenue reached record levels, supported by sustained momentum in AI ecosystem applications.
• Global point of sale (POS) revenue increased more than 30% year-over-year to record levels.
• Completed the acquisition of ElevATE Semiconductor, a provider of high-performance integrated circuits for the Automated Test Equipment (ATE) market.

Market and Competitive Landscape

• Growth is attributed to targeted capacity expansion investments coming online, resulting in increased manufacturing facility loading.
• Gross margin expansion was supported by product mix and pricing improvements alongside manufacturing efficiency.
• The company leverages a flexible hybrid manufacturing model and an expanded product portfolio of analog and power solutions.

Risks and Challenges

• Forward-looking statements involve risks including the potential that expectations may not be met, acquisition integration delays, and failure to maintain growth strategies or manufacturing performance.
• Risks include inability to increase revenue or market share in automotive, industrial, or other sectors, domestic and foreign operational risks (labor shortages, tax rates), and cyclical semiconductor industry downturns.
• Potential impacts from unfavorable currency exchange rates, global economic weakness, trade restrictions, tariffs, embargoes, and IT system breaches are noted.

Management Commentary and Tone

• Gary Yu, President and CEO, highlighted record revenue and a 500+ basis point year-over-year gross margin increase to 36.1%.
• Management expressed confidence in strong demand momentum, citing benefits from capacity expansion, product mix, and pricing improvements.
• The tone reflects optimism regarding earnings leverage and cash flow generation in the fourth quarter.

Other Key Points

• Completed a private placement of 0.00% Convertible Senior Notes due 2031 in an aggregate principal amount of $375 million.
• As of September 30, 2026, the company held approximately $578 million in cash, cash equivalents, restricted cash, and short-term investments.
• Total debt was approximately $405 million, including $364.9 million from the convertible notes net of issuance costs.
• Working capital was approximately $1.1 billion.
• Results are preliminary and unaudited, subject to final closing procedures and independent accounting review prior to the Form 10-Q filing.
• A conference call was scheduled for November 5, 2026, at 4:00 p.m. Central Time to discuss results.