Compal Electronics (2324) investor relations material

Executive summary

• Q2 2026 revenue reached TWD 238.3 billion, up 32% year-over-year, driven by strong AI server and non-PC segment growth.

• Net profit for Q2 was TWD 3.6 billion, up 59% quarter-over-quarter and 549% year-over-year, with EPS at TWD 0.73.

• Transformation efforts diversified revenue, with non-PC mix rising to 35%, targeting 40% by year-end.

• AI server business now comprises 70% of server revenue, fueling overall growth.

• Expanded global manufacturing and integration capacity, including a major new facility in Taiwan to support AI server growth.

Financial highlights

• Q2 gross margin was 4.6%, pressured by rising component costs, especially memory.

• Gross profit increased 4% quarter-over-quarter and year-over-year; operating profit grew 8% sequentially and 9% year-over-year to TWD 2.8 billion.

• Net profit for H1 2026 was TWD 6.0 billion, up from TWD 3.6 billion year-over-year; EPS for H1 was TWD 1.18.

• Book value per share improved to TWD 31.3.

• Cash and cash equivalents at June 30, 2026 were TWD 82.9 billion.

Outlook and guidance

• Q3 2026 server revenue expected to grow by high double digits quarter-over-quarter, driven by AI servers.

• FY 2026 non-PC mix targeted to approach 40%; server business expected to reach 10% of total revenue.

• 2027 guidance: server business to contribute 30%-40% of revenue, with PC mix dropping below 50%.

• PC shipments expected to decline at a mid-teens rate for FY26, with ASP increases supporting revenue.

• Smart device revenue projected to decline due to consumer demand pressure.