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- Revenue: $222.4 million, a decrease of 7.2% sequentially.
- Gross Margin: 30%, in line with guidance.
- Profit per Diluted ADS: $0.074, above the guidance range of $0.015 to $0.045.
- Large Display Drivers Revenue: $30.7 million, a sequential decrease of 21.2%.
- Small- and Medium-Sized Display Driver Revenue: $155.4 million, a decline of 2.2% sequentially.
- Non-Driver Sales: $36.3 million, a decline of 13.1% from the previous quarter.
- Operating Expenses: $60.8 million, an increase of 28.4% from the previous quarter.
- Operating Income: $5.9 million or 2.6% of sales.
- After-Tax Profit: $13 million or $0.074 per diluted ADS.
- Cash and Financial Assets: $206.5 million at the end of September 2024.
- Operating Cash Outflow: Approximately $3.1 million for the third quarter.
- Inventory: $192.5 million, lower than $203.7 million last quarter.
- Accounts Receivable: $224.6 million, down from $242.4 million last quarter.
- Capital Expenditures: $2.6 million for the third quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Q3 revenues and profits surpassed guidance, driven by strong order momentum in automotive, tablet, and Tcon product lines.
- Automotive business remained the largest revenue contributor, representing nearly half of total sales.
- Automotive Tcon sales saw an impressive sequential increase of over 30%, with significant adoption by major panel manufacturers and automotive manufacturers worldwide.
- Himax Technologies Inc (NASDAQ:HIMX) is confident in the business outlook for automotive, AI, WLO, and OLED product lines, expecting these to drive significant growth.
- The company has a strong market position in automotive display technologies, including LCD TDDI, OLED, and Tcon, providing sustainable long-term growth opportunities.
- Q3 revenues decreased by 7.2% sequentially, with a decline in large display driver sales due to weaker monitor and TV IC sales.
- Gross margin declined to 30% from 31.4% in the same period last year, affected by an unfavorable product mix.
- Operating expenses increased by 28.4% sequentially, primarily due to annual bonus compensation.
- The macroeconomic environment remains challenging, with panel customers reducing production to stabilize prices, leading to a conservative Q4 outlook.
- Non-driver sales declined by 13.1% from the previous quarter, driven by a double-digit sequential decline in Tcon sales for monitor applications.
A: Jordan Wu, President and CEO, explained that the volatility is due to rush orders, particularly from China, driven by renewed stimulus plans. Himax is confident in its Q4 projections due to its leading market position and ability to fulfill rush orders. However, visibility for 2025 remains uncertain due to macroeconomic factors. Despite this, Himax expects growth in automotive TDDI and local dimming Tcon due to numerous design wins and market dominance.
Q: Why is Himax's automotive sales expected to outperform peers in Q4?
A: Jordan Wu noted that rush orders are widespread across various panel makers and not limited to a few customers. This includes orders for both DDIC and TDDI Tcon. The ability to meet these demands, despite long production lead times, is a key factor in outperforming peers.
Q: Is CPO contributing to non-driver IC sales growth in Q4?
A: Jordan Wu clarified that CPO is not contributing to Q4 growth. The revenue from CPO is minimal and primarily for engineering verification and trial production. Significant contributions from CPO are expected in the future as the technology progresses.
Q: What is the timeline for meaningful sales contribution from CPO?
A: Jordan Wu explained that the focus is on increasing optical fiber lines in limited space to enhance data transmission rates. While specific timelines are not disclosed, Himax is accelerating development to meet customer demands. Existing WLO capacity is expected to handle future production needs, potentially generating substantial revenue and profit.
Q: How is Himax preparing for future demand in the WLO business?
A: Jordan Wu stated that Himax is leveraging existing WLO capacity, initially built for consumer electronics, to meet future LPO/CPO demands. The company is confident in its ability to generate more revenue and profit due to the sophisticated optical design and manufacturing required for these products.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.