Novatek Microelectronics (3034) investor relations material

Executive summary

• Q2 2026 net sales reached TWD 28.66 billion, up 23.83% quarter-over-quarter and 9.59% year-over-year, driven by strong customer demand across all product lines.

• Net income for Q2 2026 was TWD 6.33 billion, a 67.97% increase quarter-over-quarter and 69.22% year-over-year, with EPS at TWD 10.40.

• Gross profit was TWD 12.16 billion, up 34.48% quarter-over-quarter and 28.05% year-over-year, with gross margin at 42.42%.

• All three main product lines experienced sequential growth, with SoC products showing the strongest momentum.

• Consolidated revenue for the first half of 2026 was TWD 51.8 billion, slightly down year-over-year, but net income rose to TWD 10.095 billion.

Financial highlights

• Operating income for Q2 2026 was TWD 6.47 billion, up 60.53% quarter-over-quarter and 34.06% year-over-year.

• Operating margin was 22.56%, up 5.16 percentage points quarter-over-quarter and 4.12 points year-over-year.

• Operating expenses in Q2 were TWD 5.69 billion, up 13.5% quarter-over-quarter and 21.6% year-over-year.

• Non-operating income in Q2 2026 was TWD 1.32 billion, mainly from investment, interest, and dividend income.

• Basic EPS for the first half of 2026 was TWD 16.59, up from TWD 14.80 year-over-year.

Outlook and guidance

• Q3 2026 revenue is guided at TWD 30–31.2 billion, with gross margin expected at 38.5%–41.5% and operating margin at 19%–22%.

• Sequential revenue growth in Q3 is expected, driven by Edge AI vision chips and smartphone inventory build-up.

• TV, monitor, and notebook demand expected to decline in Q3, while tablet and non-China mobile phone demand should grow.

• The company is evaluating the impact of new IFRS standards effective in 2027 and 2028, with no material impact expected from current adoptions.