Diodes Q2 2025 slides: revenue up 14% YoY, non-GAAP earnings surge 70% QoQ

Diodes Incorporated (NASDAQ:DIOD) presented its second quarter 2025 financial results on August 7, 2025, showcasing significant sequential and year-over-year growth across key metrics. The semiconductor manufacturer reported revenue of $366.2 million, exceeding expectations with 10.3% sequential and 14% year-over-year growth, marking its fourth consecutive quarter of year-over-year growth.

Quarterly Performance Highlights

Diodes reported substantial improvement in its financial performance for Q2 2025. Non-GAAP earnings per share reached $0.32, representing a 68.4% increase from the previous quarter, while non-GAAP net income grew 70.5% sequentially to $15 million. This marks a significant recovery from Q1 2025, when the company reported earnings below analyst expectations.

"We are guiding for the third consecutive quarter of year-over-year growth," stated Gary Yu, President of Diodes, reflecting the company’s confidence in its strategic direction.

The company’s GAAP gross profit reached $115.3 million, up 10.2% quarter-over-quarter, while maintaining a gross margin of 31.5%. EBITDA stood at $84.5 million, representing 23.1% of revenue, and cash flow from operations was $41.5 million (11.3% of revenue).

As shown in the following quarterly performance chart, Diodes has demonstrated consistent revenue growth over the past several quarters:

The company’s balance sheet remains strong with $333 million in cash and cash equivalents against just $54 million in total debt, providing substantial financial flexibility for future investments and potential acquisitions.

Revenue Distribution Analysis

Diodes’ revenue profile for Q2 2025 reveals a diversified business across multiple regions and end markets. The company continues to derive the majority of its revenue (78%) from the Asia Pacific region, with Europe and the Americas accounting for 12% and 10%, respectively.

The following chart illustrates the company’s revenue breakdown by channel, region, and end market:

Computing emerged as the largest end market at 26% of revenue, followed by Industrial at 23%, Automotive at 19%, Consumer at 18%, and Communications at 14%. The combined Automotive and Industrial segments represented 42% of Q2 2025 revenue, aligning with the company’s strategic focus on these higher-margin sectors.

Point of sales increased sequentially across all regions, with double-digit growth reported in Asia, indicating healthy demand for the company’s semiconductor products.

Detailed Financial Analysis

The company’s income statement reveals a significant improvement in profitability compared to both the previous quarter and the same period last year. GAAP net income reached $46.1 million, a substantial recovery from the $4.4 million loss reported in Q1 2025 and a significant increase from the $8.0 million reported in Q2 2024.

The following table provides a comprehensive view of the company’s Q2 2025 financial performance:

It’s worth noting that the GAAP results include several one-time items, including a gain on disposal of a subsidiary and unrealized gains on investments. On a non-GAAP basis, which excludes these items, the company’s adjusted net income was $15.0 million, slightly below the $15.4 million reported in Q2 2024 but significantly higher than the $8.8 million in Q1 2025.

Forward-Looking Statements

Looking ahead to Q3 2025, Diodes provided an optimistic outlook with revenue expected to reach approximately $392 million (±3.0%), representing 12% year-over-year growth. The company anticipates a GAAP gross margin of 31.6% (±1%) and non-GAAP operating expenses of 26.0% of revenue (±1%).

The company’s Q3 2025 guidance is detailed in the following slide:

This guidance suggests continued momentum in Diodes’ business, with Q3 2025 projected to be the fourth consecutive quarter of year-over-year growth. The company expects net interest income of approximately $1.0 million and an income tax rate of 18.0% (±3%).

Strategic Initiatives

Diodes continues to execute on its long-term strategy focused on profitability growth. The company’s vision is centered on expanding shareholder value, with a mission to drive 20%+ operating profit through profitability growth. Its next strategic goal is to achieve $1 billion in gross profit.

Key tactics in the company’s strategy include:

1. Total (EPA:TTEF) system solutions sales approach and content expansion driving growth

2. Increased focus on high-margin automotive, industrial, analog, and discrete power solutions

3. Investment for technology leadership in target products, fab processes, and advanced packaging

4. Accelerated fab process and product qualifications

The company’s historical performance demonstrates its ability to execute on this strategy, with a 10% compound annual growth rate (CAGR) in both revenue and gross profit from 2005 to 2024, and a 7.3% CAGR in earnings per share from 2012 to 2024.

As shown in the following highlights from Q2 2025, the company’s strategy is yielding positive results:

With a strong balance sheet, consistent revenue growth, and strategic focus on high-margin segments, Diodes appears well-positioned to continue its growth trajectory through 2025 and beyond. Investors will be watching closely to see if the company can maintain this momentum and deliver on its Q3 2025 guidance in the face of ongoing semiconductor industry challenges.

Full presentation:

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