Cuộc họp công bố kết quả kinh doanh quý 3/2026 của Diodes Incorporated (DIOD): Doanh thu kỷ lục và định hướng biên lợi nhuận quý 4 cao hơn

Những điểm chính

• Diodes Incorporated công bố doanh thu quý 3/2026 đạt mức kỷ lục 532,6 triệu USD, tăng 35,8% so với cùng kỳ năm trước và tăng 19,5% so với quý trước, nhờ lực đẩy từ nhu cầu trong mảng ô tô, công nghiệp và các ứng dụng liên quan đến AI.
• Biên lợi nhuận gộp theo GAAP mở rộng lên 36,1% từ mức 30,7% cùng kỳ năm ngoái và 33,1% trong quý 2/2026. Ban lãnh đạo cho biết sự cải thiện này đến từ cơ cấu sản phẩm, chính sách giá và tỷ lệ tận dụng công suất nhà máy cao hơn.
• Thu nhập ròng điều chỉnh non-GAAP tăng lên 54,5 triệu USD, tương đương 1,18 USD trên mỗi cổ phiếu pha loãng, từ mức 17,2 triệu USD, tương đương 0,37 USD mỗi cổ phiếu trong quý 3/2025.
• Doanh thu mảng ô tô tăng 26% so với quý trước và gần 60% so với cùng kỳ năm ngoái, đạt mức kỷ lục theo quý. Doanh thu mảng máy tính cũng đạt kỷ lục, tăng 16% so với quý trước và 33% so với cùng kỳ năm trước.
• Đối với quý 4/2026, ban lãnh đạo dự báo doanh thu đạt khoảng 550 triệu USD, cộng trừ 3%; biên lợi nhuận gộp non-GAAP đạt 37%, cộng trừ 1%; và EPS điều chỉnh đạt 1,35 USD, cộng trừ 0,10 USD.
• Doanh thu tại điểm bán (POS) toàn cầu tăng hơn 30% so với cùng kỳ năm trước, trong khi lượng hàng tồn kho trên kênh phân phối vẫn thấp hơn mức bình thường từ 11 đến 14 tuần của công ty. Tuy nhiên, nguồn cung vẫn bị thắt chặt và thời gian giao hàng bị kéo dài.

Kết quả tài chính cốt lõi

Diodes kết thúc quý với khoảng 578 triệu USD tiền mặt, tương đương tiền, tiền mặt bị hạn chế và các khoản đầu tư ngắn hạn. Vốn lưu động đạt khoảng 1,1 tỷ USD, trong khi tổng nợ vào khoảng 405 triệu USD.

Công ty đã hoàn tất đợt phát hành riêng lẻ 375 triệu USD trái phiếu cao cấp chuyển đổi lãi suất 0% đáo hạn năm 2031. Số tiền thu ròng đạt 342,9 triệu USD sau khi trừ chi phí phát hành nợ và phí quyền chọn mua có giới hạn (capped-call). Diodes đã sử dụng 35 triệu USD để mua lại 360.119 cổ phiếu.

Hàng tồn kho đạt tổng cộng 535 triệu USD và số ngày tồn kho giảm xuống còn 141 ngày từ mức 152 ngày ở quý trước. Tổng số này bao gồm 29,5 triệu USD liên quan đến thương vụ mua lại Elevate Semiconductor; nếu loại trừ khoản này, giá trị hàng tồn kho gần như đi ngang so với quý trước.

Hiệu quả kinh doanh và hoạt động

Mảng ô tô và công nghiệp chiếm tổng cộng 46% doanh thu sản phẩm, tăng hai điểm phần trăm so với quý trước. Mảng máy tính chiếm 27%, công nghiệp 24%, ô tô 22%, tiêu dùng 17% và truyền thông 10%.

Doanh thu mảng ô tô tăng 26% so với quý trước và gần 60% so với cùng kỳ năm ngoái. Tăng trưởng phản ánh sự gia tăng giá trị linh kiện trên mỗi xe và việc mở rộng thị phần trong các phân khúc ADAS, viễn thông xe hơi, thông tin giải trí, buồng lái kỹ thuật số, hệ thống chiếu sáng, điện tử thân xe, hệ thống an toàn, hệ thống truyền động xe điện, bộ sạc tích hợp và các ứng dụng pin.

Doanh thu mảng công nghiệp tăng 26% so với quý trước và 50% so với cùng kỳ năm trước. Ban lãnh đạo viện dẫn nhu cầu trên diện rộng từ hạ tầng AI, tự động hóa, năng lượng, đo lường thông minh và robot. Diodes cũng ghi nhận nhu cầu ngày càng tăng đối với các sản phẩm silicon carbide trong bộ nguồn máy chủ và nền tảng AI điện áp 800V và 400V. Thương vụ Elevate Semiconductor giúp công ty tăng cường hiện diện tại thị trường thiết bị kiểm thử tự động bán dẫn.

Doanh thu mảng máy tính tăng 16% so với quý trước và 33% so với cùng kỳ năm ngoái, đạt mức kỷ lục theo quý. Máy chủ AI, trung tâm dữ liệu và các ứng dụng doanh nghiệp tiếp tục tăng trưởng mạnh, trong khi nhu cầu máy tính xách tay hạ nhiệt. Diodes nhấn mạnh sự tăng trưởng ở các bộ chuyển mạch gói PCI Express có thể cấu hình, các sản phẩm định thời PCI Express 6.0 và 7.0, ổ SSD doanh nghiệp và bộ lưu trữ NVMe.

Doanh thu mảng tiêu dùng tăng hơn 20% so với quý trước và 30% so với cùng kỳ năm ngoái. Doanh thu mảng truyền thông tăng 10% so với quý trước và khoảng 6% so với cùng kỳ năm trước, nhờ lực đẩy từ mạng lưới AI, các mô-đun quang học 800G và giai đoạn đầu triển khai 1.6T. Thị trường điện thoại thông minh Trung Quốc vẫn ảm đạm.

Châu Á đóng góp 79% doanh thu, châu Âu 11% và Bắc Mỹ 10%. Doanh thu của Pericom đạt mức kỷ lục và cao gấp hơn ba lần so với thời điểm được mua lại.

Kế hoạch kinh doanh của ban lãnh đạo

Đối với quý 4/2026, Diodes đưa ra triển vọng như sau:

Ban lãnh đạo kỳ vọng các ứng dụng trong mảng ô tô, công nghiệp và liên quan đến AI sẽ hỗ trợ đà tăng trưởng, bất chấp việc quý 4 thường giảm từ 5% đến 6% so với quý trước. Dựa trên điểm giữa của mức dự báo hiện tại, công ty kỳ vọng doanh thu cả năm 2026 sẽ tăng khoảng 30% so với năm 2025.

Diodes tiếp tục hướng tới mô hình mục tiêu dài hạn với doanh thu 2,5 tỷ USD và biên lợi nhuận gộp 40%. Ban lãnh đạo cho biết có thể xem xét lại các mục tiêu ba năm trong cuộc họp báo cáo kết quả kinh doanh tiếp theo. Thuế suất dự kiến cho cả năm 2026 vẫn ở mức khoảng 18%, cộng trừ ba điểm phần trăm.

Rủi ro và các yếu tố cần theo dõi

• Nguồn cung vẫn eo hẹp và thời gian giao hàng bị kéo dài, dù ban lãnh đạo cho biết việc mở rộng công suất đã giúp tăng đáng kể sản lượng xuất xưởng.
• Nhu cầu máy tính xách tay và PC còn yếu, trong khi thị trường điện thoại thông minh Trung Quốc tiếp tục ảm đạm.
• Hàng tồn kho trên kênh phân phối thấp hơn mức bình thường từ 11 đến 14 tuần, hạn chế khả năng tái tích trữ hàng và đòi hỏi phải phối hợp chặt chẽ với khách hàng.
• Tình trạng tồn kho của một số khách hàng vẫn ở mức chỉ đủ đáp ứng nhu cầu trước mắt, theo các cuộc trao đổi của ban lãnh đạo với các khách hàng cấp 1 (Tier 1).
• Thu nhập và chi phí khác trong quý 3 bao gồm khoản lỗ đầu tư chưa thực hiện trị giá 6 triệu USD và 3 triệu USD lỗ tỷ giá hối đoái.
• Công suất không hoàn toàn có thể hoán đổi giữa các sản phẩm, dù ban lãnh đạo cho biết công suất xử lý đầu vào (front-end) và wafer mang lại sự linh hoạt nhất định.

Điểm nhấn phiên hỏi đáp với các nhà phân tích

Về chất lượng nhu cầu, ban lãnh đạo chỉ ra mức tăng trưởng doanh thu tại điểm bán (POS) toàn cầu hơn 30% so với cùng kỳ năm trước và số tuần tồn kho trên kênh phân phối đang giảm. Công ty cho biết đang theo dõi chặt chẽ tốc độ bán hàng thực tế và cơ cấu sản phẩm nhằm tránh các vấn đề tồn kho từng xảy ra trong các chu kỳ trước.

Về mức độ đóng góp từ AI, Diodes không định lượng tổng doanh thu AI. Ban lãnh đạo cho biết máy chủ trung tâm dữ liệu chiếm tỷ trọng lớn và viện dẫn giá trị linh kiện đạt khoảng 109 USD trên mỗi thiết bị, cùng các cơ hội bổ sung trong bộ nguồn công nghiệp, thiết bị mạng, bộ chuyển mạch, bộ định tuyến, bộ thu phát và mô-đun quang học.

Về biên lợi nhuận, ban lãnh đạo cho biết có thể cải thiện thêm nhờ tỷ lệ tận dụng công suất nhà máy đúc wafer cao hơn, tăng trưởng doanh thu, tối ưu cơ cấu sản phẩm, kích thước wafer lớn hơn và giảm chi phí do hoạt động dưới công suất. Các cơ sở tại Scotland và South Portland vẫn chưa hoạt động hết công suất, tạo dư địa để nâng cao hơn nữa hiệu suất sử dụng.

Về công suất, ban lãnh đạo cho biết tốc độ giao hàng quý 3 tính theo năm đạt khoảng 60 tỷ đơn vị sản phẩm, so với khoảng 45 tỷ đơn vị được giao trong năm dương lịch 2025. Tỷ lệ vận hành cao hơn phản ánh cả nhu cầu gia tăng lẫn việc chuyển giao hoặc bổ sung nguồn cung thứ hai đối với một số hoạt động sản xuất về các cơ sở nội bộ.

Toàn văn biên bản cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good afternoon, and welcome to the Diodes Incorporated Third Quarter 2026 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded today, Thursday, November 5, 2026.

I would now like to turn the call over to Leanne Severs of Shelton Group Investor Relations. Leanne, please go ahead.

Leanne Sievers

Good afternoon, and welcome to Diodes' Third Quarter 2026 Financial Results Conference Call. I'm Leanne Severs, President of Shelton Group, Diodes' investor relations firm. Joining us today are Diodes' President and CEO, Gary Yu; CFO, Brett Whitmire; Senior Vice President of Worldwide Sales and Marketing, Emily Yang; and Vice President of Corporate Marketing and Investor Relations, Gurmeet Dhaliwal.

I'd like to remind our listeners that the results announced today are preliminary as they are subject to the company finalizing its closing procedures and customary quarterly review by the company's independent registered public accounting firm. As such, these results are unaudited and subject to revision until the company files its Form 10-Q for its quarter ended September 30, 2026.

In addition, management's prepared remarks contain forward-looking statements, which are subject to risks and uncertainties, and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995.

Actual results may differ from those discussed today, and therefore we refer you to a more detailed discussion of the risks and uncertainties in the company's filings with the Securities and Exchange Commission, including Forms 10-K and 10-Q. In addition, any projections as to the company's future performance represent management's estimates as of today, November 5, 2026. Diodes assumes no obligation to update these projections in the future as market conditions may or may not change, except to the extent required by applicable law.

Additionally, the company's press release and management statement during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms. Included in the company's press release are definitions and reconciliations of GAAP to non-GAAP items, which provide additional details. Also, throughout the company's press release and management statements during this conference call, we refer to net income attributable to common stockholders as GAAP net income.

For those of you unable to listen to the entire call at this time, a recording will be available via webcast for 90 days in the Investor Relations section of Diodes' website at www.diodes.com.

And now I'll turn the call over to Diodes' President and CEO, Gary Yu. Gary, please go ahead.

Unknown Speaker

Welcome, everyone, and thank you for joining us on today's conference call.

As announced in our press release earlier today, our third quarter revenue reached record levels, coupled with an over 500 basis point year-over-year increase in gross margin to 36.1%, driving significant expansion in non-GAAP earnings. Global POS was also at a record level in the quarter, increasing more than 30% year-over-year.

Our sequential revenue growth of more than 19% was primarily driven by record automotive revenue from continued market share gains, stronger demand for broad industrial applications, and the sustained momentum in AI ecosystem applications that contributed to record revenue in the computing market.

Underpinning this growth is the benefit of the targeted investments we made in capacity expansion over the past year coming online. The resulting increase in loading at our manufacturing facilities also benefits gross margin, along with product mix and pricing improvements. Based on our current projection for continued growth in the fourth quarter, we expect full-year revenue to increase approximately 30% over 2025 at the midpoint.

In addition to being well above our historical CAGR of 10%, we continue to see strong demand momentum resulting from our new product initiatives, market share gains, as well as increasing content at customers. This anticipated sequential growth is once again coupled with further non-GAAP gross margin expansion of 80 basis points sequentially to 37% at the midpoint, and increasing earnings leverage as well as strong cash flow generation.

With that, let me now turn the call over to Brett to discuss our third quarter financial results as well as our fourth quarter guidance in more detail.

Brett Whitmire

Thanks, Gary, and good afternoon, everyone.

Revenue for the third quarter of 2026 was $532.6 million, an increase of approximately 36% over $392.2 million in the third quarter of 2025, and up approximately 20% compared to $445.5 million in the second quarter of 2026.

Gross profit for the third quarter was $192.5 million or 36.1% of revenue, compared to $120.5 million or 30.7% of revenue in the prior-year quarter, and $147.6 million or 33.1% of revenue in the prior quarter. Non-GAAP gross profit was $192.9 million and non-GAAP gross profit margin was 36.2%, which excluded 0.1% or $0.4 million of inventory accounting associated with the acquisition of Elevate Semiconductor.

GAAP operating expenses for the third quarter were $129.1 million, or 24.2% of revenue, and on a non-GAAP basis were $122.1 million, or 22.9% of revenue, which excludes $5.2 million of acquisition-related intangible asset costs and $1.8 million of acquisition-related costs. This compares to GAAP operating expenses in the third quarter of 2025 of $108.9 million or 27.8% of revenue, and $114.3 million or 25.6% of revenue in the prior quarter. Non-GAAP operating expenses in the prior quarter were $108.6 million, or 24.4% of revenue.

Total other income and expense amounted to approximately $0.4 million expense for the quarter, consisting of $6 million in unrealized loss on investments, $3 million in foreign currency losses, $0.8 million in interest expense offset by $4.8 million in interest income, $3.8 million on gain on disposal of subsidiary, and $0.8 million in other income.

Income before taxes, equity in net earnings of equity investments, and non-controlling interest in the third quarter of 2026 was $63 million, compared to $19.5 million in the prior-year period and $58 million in the previous quarter. Turning to income taxes, our effective income tax rate for the third quarter was approximately 23.2%. In 2026, we continue to expect the tax rate for the full year to remain at approximately 18% plus or minus 3%.

GAAP net income for the third quarter was $43.7 million, or $0.95 per diluted share, compared to a net income of $14.3 million, or $0.31 per diluted share in the prior-year quarter, and net income of $46.6 million, or $1.00 per diluted share last quarter. The share count used to compute GAAP diluted income per share for the third quarter of 2026 was 46.2 million shares.

Non-GAAP adjusted net income in the third quarter was $54.5 million, or $1.18 per diluted share, which excluded, net of tax, $7.9 million unrealized loss on investments, $4.2 million of acquisition-related intangible asset amortization costs, $3 million gain on disposal of subsidiary, $1.4 million of acquisition-related costs, and $0.3 million of acquisition-related inventory amortization costs. This compares to non-GAAP adjusted net income of $17.2 million, or $0.37 per diluted share, in the third quarter of 2025, and $32.5 million, or $0.70 per diluted share, in the prior quarter. Excluding non-cash share-based compensation expense of $7.4 million for the third quarter, net of tax, both GAAP net income and non-GAAP adjusted net income would have increased by $0.16 per share.

EBITDA for the third quarter was $89.7 million, or 16.8% of revenue, compared to $46.6 million, or 11.9% of revenue in the prior-year period, and $83.5 million, or 18.7% of revenue in the prior quarter. We have included in our earnings release a reconciliation of GAAP net income to non-GAAP adjusted net income and GAAP net income to EBITDA, which provides additional details.

Cash flow provided by operations was $97.2 million for the third quarter. Free cash flow was $43.9 million, including $53.2 million of capital expenditures. Net cash flow was a positive $134.1 million, which includes $35 million for the stock buyback program.

Turning to the balance sheet, at the end of the third quarter, cash, cash equivalents, restricted cash, plus short-term investments totaled approximately $578 million. Working capital was approximately $1.1 billion, and total debt was approximately $405 million.

During the quarter, we completed a private placement of 0% convertible senior notes due 2031 in the aggregate principal amount of $375 million, including the initial purchasers' exercise of their option to purchase additional notes in full, generating net proceeds of $342.9 million after deducting $10.2 million in debt issuance costs and $21.9 million of capped call transaction premiums. The company also used $35 million of the net proceeds to repurchase 360,119 shares of our common stock in a privately negotiated transaction.

In terms of inventory, at the end of the third quarter, total inventory days decreased 11 days to approximately 141 as compared to 152 last quarter. Finished goods inventory days were approximately 44 compared to 51 days last quarter. Total inventory dollars increased $30.5 million from the prior quarter to $535 million, consisting of a $25.1 million increase in work in process, a $14.8 million increase in raw materials, and a $9.4 million decrease in finished goods. The increase in inventory helps to support our customers and expected growth, as well as our longer wafer manufacturing lead times. For the third quarter, there was a $29.5 million addition to inventory associated with the acquisition of Elevate Semiconductor. Without this increase, total inventory dollars would have been approximately flat compared to last quarter.

Capital expenditures on a cash basis were $53.2 million for the third quarter, or 10% of revenue, which is above our targeted annualized range of 5% to 9% of revenue, but within the range year-to-date at 8.6% of revenue.

Now turning to our outlook. For the fourth quarter, we expect revenue to be approximately $550 million, plus or minus 3%. At the midpoint, this represents a 40.4% increase year-over-year, and a 3.2% increase sequentially. Non-GAAP gross margin is expected to expand to 37%, plus or minus 1%. Non-GAAP adjusted EPS is expected to be $1.35, plus or minus $0.10.

With that, I now turn the call over to Emily Yang. Thank you.

Emily Yang

Thank you, Brad, and good afternoon.

As Gary and Brad mentioned, revenue in the third quarter was up 19.5% sequentially and up 35.8% over the prior-year period, exceeding the midpoint of our guidance. This was mainly driven by very strong demand across all regions, led by North America, followed by Asia and Europe. Pericom product revenue reached a record high, which is greater than 3x since the acquisition. Global POS also reached record revenue, driven by the Americas, followed by Europe and Asia. Channel inventory decreased in terms of weeks again this quarter, with weeks lower than our normal range of 11 to 14 weeks. While supply continues to be tight, we remain strategically focused on long-term sustainable business and demand creation.

Our third quarter results and the expectation for continued growth into the fourth quarter reflect our commitment to the supply chain, our focus on key customer partnerships, as well as market share gains combined with our strong operational performance, capacity expansion activities, and the success of our hybrid manufacturing strategy. Looking at the fourth quarter, we see continuous strength in automotive, industrial, and AI-related applications. With a strong backlog and demand pipeline, we're guiding more than 3% quarter-over-quarter growth compared to our usual 5% to 6% down.

During the quarter, our margin also improved 300 basis points from 33.1% to 36.1%. This was mainly driven by product mix improvement, price adjustments, and capacity underloading improvement. Our fourth quarter guidance of 37% underscores our continuous momentum in margin improvement.

Looking at global sales in the third quarter, Asia represented 79% of the revenue, Europe 11%, and North America 10%. In terms of our end markets, computing was 27% of Diodes' product revenue, industrial 24%, automotive 22%, consumer 17%, and communication 10% of product revenue. Automotive and industrial revenue combined totaled 46% of product revenue, which was up 2 percentage points from last quarter.

Now, let me review the end markets in greater detail. Starting with the automotive market, revenue grew 26% sequentially and almost 60% year-over-year to reach a quarterly record, driven by content expansion and market share gains. This momentum is extending into the fourth quarter as demand remains strong. We continue to benefit from the application trend of connected driving, advanced vehicle electronics, and electrification, which are driving higher semiconductor content per vehicle.

During the quarter, we saw continuous design win momentum across ADAS, telematics, infotainment, and digital cockpit applications. As vehicles incorporate more displays, sensors, processors, and communication interfaces, demand for our timing, connectivity, and power management solutions continues to increase. We also saw strong traction across lighting, body electronics, and safety applications supported by new production ramps and design wins for LED drivers, smart power devices, current monitors, and protection products. In electrification, we secured additional wins in EV power systems, onboard charging, and battery-related applications. Overall, our expanding content position across connected driving, vehicle electronics, lighting, safety, and electrification continues to create growth opportunities across both ICE and EV platforms and support our long-term automotive growth strategy.

Turning to the industrial market, revenue increased 26% sequentially and 50% year-over-year. Market demand continues to strengthen, especially for expanded content opportunities across AI infrastructure, automation, energy, smart metering, and emerging robotic applications. In humanoid robotics, we secured design-ins for our level shifter portfolio on robot control boards. Demand for power management solutions also remains strong across smart meters, energy systems, embedded systems, industrial automation, cooling applications, smart buildings, outdoor lighting, and power adapters. We also continue to strengthen our position in AI data center power structures, seeing increasing demand for our silicon carbide solutions in high-power 800-volt and 400-volt server and AI platform power supplies.

Through our acquisition of Elevate, we are benefiting from favorable conditions in the semiconductor automated test equipment market, which is experiencing one of the strongest growth cycles in its history. Industrial growth is being driven by increasing demand for higher voltage and more capable test platforms. We believe Elevate is well positioned to capitalize on this trend with its differentiated high-voltage product portfolio and new product introductions.

In the computing market, revenue increased 16% sequentially and 33% year-over-year to reach a quarterly record and remain the largest end market for Diodes. During the quarter, we continued to see strong momentum in AI server, data center, and enterprise, whereas notebook demand was a little bit soft. We expect AI server, data center, and enterprise storage will continue to drive momentum in the fourth quarter to offset the slowdown in the notebook and PC market. AI infrastructure investment is also driving growth across our broader server portfolio.

Our configurable low-power PCI Express packet switch business saw significant growth. Demand for our PCI Express 6.0 and 7.0 timing products remains strong, with new clock generators, multiplexers, and buffers gaining adoption across next-generation AI server platforms. Our PCI Express timing portfolio has gained huge traction with several recent design wins with major AI cloud and server customers. We're also seeing solid momentum in enterprise SSDs and AI data center storage supported by growing NVMe SSD demand. Increasing AI server power density is creating additional opportunities across power management, monitoring, protection, and thermal management. Overall, increasing AI infrastructure complexity and power requirements are expanding our content opportunities across timing, connectivity, storage, power management, protection, and thermal management, positioning computing as an important growth driver for Diodes.

In the consumer market, revenue increased over 20% sequentially and 30% year-over-year. We continue to see positive momentum in our consumer business supported by growth across premium home audio, consumer controls, energy-efficient lighting, USB-C power, and protection products. USB-C adoption continues to expand across connected consumer devices, including TV set-top boxes, routers, and handheld gaming systems, driving growth for our USB-C power solutions as the interface becomes more widely used for both charging and data connectivity. This opportunity demonstrates the increased breadth of our product portfolio across audio, power, protection, connectivity, and timing for consumer applications.

Lastly, in the communication market, revenue increased 10% sequentially and approximately 6% year-over-year, representing 10% of our total product revenue. Networking driven by AI applications continues with strong momentum, while the smartphone market in China remains soft. AI-driven networking is creating new growth opportunities, with continued demand for 800G optical modules and the beginning of the 1.6T ramp expanding opportunities for our connectivity and timing products. Our timing solutions are also gaining traction with optical module manufacturers. As data centers move to higher network speeds, optical transceivers require increasingly precise, ultra-low jitter timing to support high-speed connectivity between servers and cloud infrastructure. This plays to core Diodes strengths in quartz-based timing solutions, including differential oscillators used as reference clocks for optical modules and other communication applications.

In summary, we are very pleased with the achievement of our record quarterly revenue and strong gross margin expansion as we benefit from an improved product mix through record revenue in automotive and computing markets combined with pricing and loading improvements. With our broad portfolio and diversified end markets, we are less dependent on any one market segment. Our key focus areas of automotive, industrial, and AI applications are well balanced and will continue to drive Diodes' future growth momentum. In the fourth quarter, we are guiding for further expansion across revenue, gross margin, and non-GAAP earnings, which puts us well ahead of our timeline towards achievement of our three-year financial goals.

With that, we now open the floor to questions. Operator.

Operator

We will now begin the question-and-answer session. [Operator Instructions] The first question today comes from David Williams with Needham. Please go ahead.

Phần hỏi đáp

David Williams

I guess maybe first thing that comes to mind, and Emily mentioned this, but your three-year targets you set earlier this year are looking a bit out of date, given your success here. Just curious if that is something you would revisit here in the near term or if there's anything we should be thinking about in terms of those targets and how you're thinking about the growth over the next year?

Emily Yang

Yes. Hi, David, this is Emily. We will definitely revisit again during probably the next earnings call to reset some of the goals. But now for this quarter, I think our IR material will actually reflect the results as of today or as of the end of Q3, so you should be able to get some of the information out from the IR presentation. But thank you.

David Williams

All right. Very good. And then just kind of thinking about the lead times and the inventories, can you talk a little bit about the pricing environment that you did mention, but also how are your lead times trending and is that creating any issues in terms of are you able to meet demand and maybe how long your forecast customers are providing you?

Emily Yang

Thanks. Yeah, so in general, lead time is still extended, right? The supply is still a little bit constrained. What we are doing is actually working with the customers, understanding their true demand, and providing the best support we can. If you look at overall unit shipment that we provided, I think calendar year 2025, we shipped about 45 billion units, and using the Q3 run rate, we are actually at a run rate of about 60 billion units. So as you can see, we actually increased the shipment volume significantly. This is actually driven by some of the aggressive initiatives that we put together, including capacity expansion, product mix improvement, and stuff like that. I would say, all in all, it's a good representation of the increased focus on expanding our capacity and better supporting the customer.

David Williams

Okay, great. And if I could sneak just 1 last one in, and that is on the AI infrastructure or AI opportunity for you all. That's been a very big area of growth. Is there a way for us to think about the magnitude of what that contribution is today in terms of your total revenue base?

Emily Yang

Yes, we haven't really broken out the AI revenue and reported it that way, but I did mention before the whole AI ecosystem, data center servers are definitely a major portion of it. We also mentioned the total content per box is about $109. But on top of that, we have industrial applications, including all the power supplies. We see that as a big potential upside for us, especially next year, with some of the new designs, transition to 800-volt, 400-volt, and stuff like that. We also see networking as an example, whether it's switches or routers. Also, the transceivers, the optical modules will continue to drive a lot of momentum.

But I would say all in, this is really positive for us and we are excited for the growth. But 1 thing I do want to point out, right? I know AI is a really hot topic today or for the last few months, but 1 thing about Diodes is we have very well diversified into a lot of different end markets. Using the example of automotive, we actually grew more than 60% or close to 60% year-over-year. Even industrial, we actually grew 50% year-over-year, right? So I think that's 1 thing I want to point out. AI will continue to drive the momentum as well as automotive, industrial, and some other applications.

David Williams

All right. Thanks so much.

Operator

The next question comes from Will Stein with Truist. Please go ahead.

William Stein

Hi, this is Elliot on for Will. First, if we could start with margins. As we move into calendar year '27, can you help us think about potential margin expansion and incrementals for both gross and operating, and maybe just generally the puts and takes as we get outside of the next couple of quarters?

Brett Whitmire

Sure. Yes, Elliot, this is Brett. I'll make a couple of comments here. I think as we've kind of said before, I think we'll continue to have improvement of our margin and leverage based on improved utilization in our wafer fabs that we have positioned for expansion. We're also going to see improved margin as our revenue grows, which we would expect that to continue. I think we're growing at a really great rate in the back half. We would expect to continue to grow to gain share as we go into next year. And so I think those are the main—from an additional leverage, we have the manufacturing, but you've also got the improved product mix and the improvement that we're going to be making that will benefit us on the margin side.

Unknown Speaker

Yes, this is Gary. At this moment, we are hitting on 37% as we keep building guidance in the fourth quarter. I think our target model is like $2.5 billion with a 40% margin, and we're marching forward on the right track toward that direction.

William Stein

Okay, great. Thank you. And then for my follow-up, could you talk a little bit about just demand linearity you saw through such a strong quarter? Did it build as the quarter went? You've guided for more accelerating growth as we move forward. So how did the linearity trend throughout the quarter and maybe anything you've seen in October relative to your prior such strong quarter? Thanks.

Emily Yang

Yes, so this is Emily. I think Q4 usually is a down quarter, about 5% to 6%. For us, we guided more than 3% quarter-over-quarter. This is actually based on the strong backlog and the design pipeline that we actually have visibility on. I think if you really look at the end market, automotive, industrial, and AI-related applications will continue to drive some of the momentum into Q4. October, compared to the previous quarter, we definitely have good visibility from the backlog, as well as a very strong beginning backlog. So with all these factors put together, we actually provided much stronger guidance than our usual seasonality.

Operator

Thank you. The next question comes from Tristan Gerra with Baird. Please go ahead.

Tristan Gerra

Given the decline that's been well advertised in PCs and notebooks into 4Q, is it fair to assume that there is fungibility and you can reallocate quickly via distribution to other end markets, which presumably will be higher margin and that helps mix, but also to reduce maybe lead times in some areas that are very constrained?

Emily Yang

Hi, Tristan, this is Emily. So of course it's product by product. It's not across the board, but in general, the capacity should be able to be shared among different products, as well as sometimes the front-end capacity as well as the wafers. So not 100%, but there's a lot of flexibility that we can work things around. Just also keep in mind that I think I mentioned the AI portion of the servers and the data center will continue to be strong and that also will help us to offset some of the softness in a specific market segment.

Tristan Gerra

Okay. And then as my follow-up, the higher loadings that you described, is it solely driven by higher demand or is there also some migration from products that were previously outsourced that you're migrating in-house?

Unknown Speaker

Okay, hey Tristan, this is Gary. So like Emily mentioned, market demand for us is very strong, right? Even though we continue to expand our capacity and most of internal facilities are fully loaded, right? So, so far, our fab in Scotland and the fab in South Portland are still not fully loaded yet, but we're continuing to see utilization improve from the second source program, sourcing from outside fab, and also the new demand from newly design-in design-win products into those 2 fabs to support customer needs. So I would say both.

Tristan Gerra

Great. Thank you very much.

Unknown Speaker

Thank you, Tristan.

Operator

The next question comes from Michael Mani with Bank of America. Please go ahead.

Michael Mani

To start, I wanted to get your sense of where you think we are in this cycle. Revenue right now is past its prior peak. You've essentially outgrown seasonality for the last 2 years. So, I mean, are you seeing restocking behavior consistently across all your end markets, and how do you ensure the quality of demand, especially in the distributor channel, which grew a lot this past quarter? How do you ensure there's no double or excess ordering given that there are some supply constraints cropping up elsewhere in the industry?

Emily Yang

Yes, so I think Michael, it is a little bit hard to predict the overall market, but all in all, I would just talk specifically on the Diodes situation. I did mention our POS quarter-over-quarter growth. If we look at year-over-year, that's actually more than 30% year-over-year growth. So you can actually see the demand is actually very, very strong, right? So all in all, I also mentioned that our channel inventory decreased in terms of weeks again. This quarter definitely is below our normal range, which also means that we don't really have the privilege to restock anything. Our key focus is actually to continue focusing on POS growth. Right? I think the number of weeks of channel inventory a lot of time is based on the POS result.

What we want to focus on is actually putting the right product, putting the right mix on the shelf of distribution to continue to enable our POS future growth down the road. So that will continue to be our focus, and I would say that will be our strategy moving forward. We definitely don't want to repeat the challenges that we faced a few years back, so we actually monitor this very, very closely.

Michael Mani

Great, thank you. And as a follow-up, this touches on some of the other questions that were asked prior for gross margins. I know there were a number of initiatives done over the last 2 to 3 years to essentially help them structurally improve when demand returns. I think 1 of those initiatives was moving more wafers internally, right, from your third-party foundry network. Another 1 was moving to larger wafers. You were also doing cost reductions on a broad swath of parts. So for all of those kind of internal initiatives, have you largely completed those? Is there still a lot more to go as you look throughout the rest of the portfolio before we really start to see the margin tailwinds from this? It seems like it's already happening, but how much more left is there from those internal self-help initiatives? Thank you.

Emily Yang

Yes, I think like Gary mentioned, right, we have a goal of $1 billion gross profit dollars, and with the model of that 40% margin, as you can see with our fourth quarter 37%, we still have room to go. I think the key focus for margin improvement separates into a few areas. One of the key initiatives is product mix improvement. And as you can see in the third quarter, our auto and industrial increased to 46%, which is a 2 percentage point improvement compared to last quarter. We also mentioned Pericom products reaching record revenue. All this is actually a good demonstration of the product mix improvement initiative that we will continue driving, right?

The second thing is, as you kind of alluded to, we call manufacturing efficiency improvement, whether it's actually moving to a larger wafer or loading more into the factory. This will directly help with the revenue improvement overall; revenue usually increases loading. At the same time, we're doing a lot of initiatives to maximize the capacity return overall and reduce the underloading cost, right? So we believe that with the combination of new product introductions alongside the initiatives we put in place, there's still a lot of room for us to continue to improve the margin for the quarters to come.

Operator

The next question comes from Tristan Gerra with Baird. Please go ahead. All right, Tristan, you may ask your question.

Tristan Gerra

Can you hear me now?

Operator

We can hear you now. Yes.

Tristan Gerra

Okay. Sorry about that. Sorry, I couldn't help coming back. A quick follow-up. At the OEM level, outside of AI, obviously, is there any attempt to rebuild inventories? There's been some advertised China automotive softness into European exports, or maybe even in industrial. Or do you see OEM, not disti, but OEM inventory levels still very low, depending on whether you actually have visibility on that?

Emily Yang

Yes, Tristan, this is Emily. Based on our visibility, based on our communication with all our Tier 1 customers, at this moment we feel more of a hand-to-mouth situation. I don't really think there's a lot of privilege for us to build up the inventory at this moment. So we are working with them very closely to try to understand their shelf policy, how many weeks, and we actually monitor very closely.

Tristan Gerra

Great. Thank you very much again.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Gary Yu for any closing remarks.

Unknown Speaker

Thank you, everyone, for participating in today's call. We look forward to reporting our continued progress on next quarter's conference call. Operator, you may now disconnect.

Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

This live transcript is auto-generated without human intervention or review.