Diodes, Inc. (DIOD) Q3 2026 Earnings Call
DIODES INC /DEL/ (DIOD) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 05-Nov-2026 Diodes, Inc. (DIOD) Q3 2026 Earnings Call CORPORATE PARTICIPANTS Leanne K. Sievers President, Shelton Group Gary Yu President, Chief Executive Officer & Director, Diodes, Inc. Brett R. Whitmire Chief Financial Officer, Diodes, Inc. Emily Yang Senior Vice
Facts are quoted from the filing text and checked against it.
How this was made
The 30-second read
Why it matters
The earnings beat and reaffirmed guidance provide fresh data for traders to assess valuation and momentum.
Market read
The new earnings and guidance are material for DIOD and may influence related semiconductor stocks.
What to watch
Potential supply chain constraints or macro slowdown could temper growth.
Diodes reports record Q3 2026 revenue of $532.6 million and GAAP gross margin of 36.1%, and guides Q4 2026 revenue to approximately $550 million
Revenue, gross margin, GAAP and non-GAAP net income and EPS, and EBITDA all rose sharply versus the prior-year and prior quarter figures printed in the document. Management guides Q4 2026 revenue up 40.4% year-over-year at the midpoint and non-GAAP gross margin to 37%. The document contains no press release and no prior outlook, so the verdict rests on the CFO and CEO prepared remarks and the call Q&A.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, Q3 2026GAAP | $532.6M | 19.5% | 35.8% |
| Gross profit, Q3 2026GAAP | $192.5M | – | – |
| Gross margin, Q3 2026GAAP | 36.1% | 300 basis points | over 500 basis points |
| Gross profit, Q3 2026non-GAAP | $192.9M | – | – |
| Gross margin, Q3 2026non-GAAP | 36.2% | – | – |
| Operating expenses, Q3 2026GAAP | $129.1M | – | – |
| Operating expenses as % of revenue, Q3 2026GAAP | 24.2% | – | – |
| Operating expenses, Q3 2026non-GAAP | $122.1M | – | – |
| Operating expenses as % of revenue, Q3 2026non-GAAP | 22.9% | – | – |
| Income before taxes, equity and net earnings of equity investments and non-controlling interest, Q3 2026other | $63M | – | – |
| Total other income and expense, Q3 2026other | approximately $0.4 million expense | – | – |
| Interest expense, Q3 2026other | $800K | – | – |
| Interest income, Q3 2026other | $4.8M | – | – |
| Effective income tax rate, Q3 2026other | approximately 23.2% | – | – |
| GAAP net income attributable to common stockholders, Q3 2026GAAP | $43.7M | – | – |
| GAAP diluted EPS, Q3 2026GAAP | $0.95 per diluted share | – | – |
| Non-GAAP adjusted net income, Q3 2026non-GAAP | $54.5M | – | – |
| Non-GAAP adjusted diluted EPS, Q3 2026non-GAAP | $1.18 per diluted share | – | – |
| EBITDA, Q3 2026other | $89.7M | – | – |
| EBITDA as % of revenue, Q3 2026other | 16.8% | – | – |
| Cash flow provided by operations, Q3 2026other | $97.2M | – | – |
| Free cash flow, Q3 2026other | $43.9M | – | – |
| Capital expenditures on a cash basis, Q3 2026other | $53.2 million (10% of revenue) | – | – |
| Capital expenditures as % of revenue, year-to-date 2026other | 8.6% | – | – |
| Net cash flow, Q3 2026other | positive $134.1 million | – | – |
| Total inventory dollars, end of Q3 2026other | $535M | increased $30.5 million from the prior quarter | – |
| Total inventory days, end of Q3 2026other | approximately 141 | decreased 11 days | – |
| Finished goods inventory days, end of Q3 2026other | approximately 44 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Automotive (end market)Company attributes the record quarter to content expansion and market share gains across ADAS, telematics, infotainment, digital cockpit, lighting, body electronics, safety and electrification. | 22% of Diodes product revenue | 26% | almost 60% |
| Industrial (end market)Company cites demand for AI infrastructure, automation, energy, smart metering, robotics and power management, and ElevATE benefiting from strong semiconductor automated test equipment market conditions. | 24% of Diodes product revenue | 26% | 50% |
| Computing (end market)Record quarter, described as the largest end market. Strength from AI servers, data center and enterprise storage, partly offset by softness in mobile. Company expects AI server, data center and enterprise storage to offset a slowdown in notebook and PC. | 27% of Diodes product revenue | 16% | 33% |
| Consumer (end market)Growth in premium home audio, consumer controls, energy efficiency lighting, USB C power and protection products. | 17% of Diodes product revenue | over 20% | 30% |
| Communication (end market)AI-driven networking momentum, including demand for 800 gig optical modules; smartphone market in China described as soft. | 10% of Diodes product revenue | 10% | approximately 6% |
| Asia (geography)Share of Q3 2026 global sales as stated by the company. No change figure printed. | 79% of global sales | – | – |
| Europe (geography)Share of Q3 2026 global sales as stated by the company. No change figure printed. | 11% of global sales | – | – |
| North America (geography)Share of Q3 2026 global sales as stated by the company. The company said demand was very strong across all regions and led by North America. | 10% of global sales | – | – |
Q4 2026 outlook
- Revenueapproximately $550 million, plus or minus 3%
- Gross margin37% plus or minus 1% (non-GAAP)
- NoteAt the midpoint, revenue represents a 40.4% increase year-over-year and a 3.2% increase sequentially (CFO).
- NoteNon-GAAP adjusted EPS expected to be $1.35 plus or minus $0.10 (CFO).
- NoteNon-GAAP gross margin at the midpoint of 37.0%, an 80 basis point sequential expansion (CEO).
- NoteFull year 2026 revenue expected to increase approximately 30% over 2025 at the mid-point (CEO).
- NoteFull year 2026 effective tax rate expected at approximately 18% plus or minus 3% (CFO).
Capital returns
- Stock buyback: $35 million used to repurchase 360,119 shares of common stock in a privately negotiated transaction, funded from the net proceeds of the convertible notes.
- Net cash flow of $134.1 million in Q3 2026 is stated by the CFO to include $35 million for the stock buyback program.
What drove it
- CEO attributes sequential growth of more than 19% primarily to record automotive revenue from market share gains, broad industrial demand and AI ecosystem applications that drove record computing revenue.
- CEO says capacity expansion investments coming online increased loading at manufacturing facilities, which benefited gross margin along with product mix and pricing improvements.
- CFO and SVP Sales attribute the margin improvement from 33.1% to 36.1% to product mix improvements, price adjustments and capacity under-loading improvements.
- Global point of sale (POS) was a record in the quarter and increased more than 30% year-over-year, per the CEO and SVP Sales.
- Channel inventory decreased in weeks during the quarter and was below the company's normal range of 11 to 14 weeks, per the SVP Sales.
- Pericom product revenue reached a record high and is greater than 3x since the acquisition, per the SVP Sales.
- Automotive and industrial combined totaled 46% of product revenue, up 2 percentage points from last quarter.
- Non-GAAP adjustments excluded $0.4 million of inventory accounting associated with the acquisition of ElevATE Semiconductor and $5.2 million of acquisition related intangible asset costs in operating expenses.
- Other income and expense included a $6 million unrealized loss on investments, $3 million of foreign currency losses and a $3.8 million gain on disposal of subsidiary, per the CFO.
- Management states that non-cash share-based compensation of $7.4 million net of tax would reduce both GAAP and non-GAAP per-share earnings by $0.16 per share if included.
Concerns
- Supply is described as still constrained and lead times as still extended, per the SVP Sales.
- Notebook and PC market slowdown is expected in Q4 and mobile demand was soft in Q3, per the SVP Sales.
- Smartphone market in China is described as soft.
- Capital expenditures were 10% of revenue in Q3 2026, above the company's 5% to 9% targeted annualized range.
- Inventory dollars increased $30.5 million quarter over quarter, of which $29.5 million was associated with the ElevATE acquisition.
- Q4 2026 guidance of more than 3% sequential growth compared with the company's usual 5% to 6% decline in the fourth quarter, as stated by the SVP Sales.
- Total debt of approximately $405 million, including the $375 million convertible notes due 2031.
- GAAP operating expenses of $129.1 million rose from $114.3 million in the prior quarter.
What to watch
- Q4 2026 execution against revenue guidance of approximately $550 million plus or minus 3% and non-GAAP gross margin of 37% plus or minus 1%.
- Full year 2026 revenue increase of approximately 30% over 2025 at the midpoint, as stated by the CEO.
- Management said it will revisit its three-year financial goals on the next earnings call. The CEO referenced a target model of approximately $2.5 billion with a 40% margin and a goal of $1 billion in gross profit dollars.
- Capital expenditure intensity versus the 5% to 9% of revenue target range.
- Inventory days (141, from 152 prior quarter) and whether inventory rebuilds in line with the company's expectations for customer growth and longer wafer lead times.
- Quality of demand through the distributor channel, which the company says is monitored against weeks of channel inventory.
- Notebook and PC softness in Q4 versus the offset from AI server, data center and enterprise storage demand.
- Full year 2026 tax rate of approximately 18% plus or minus 3%.
Balance sheet and cash flow
- Cash, cash equivalents, restricted cash plus short-term investments: approximately $578 million at end of Q3 2026.
- Working capital: approximately $1.1 billion at end of Q3 2026.
- Total debt: approximately $405 million at end of Q3 2026.
- Private placement of 0% convertible senior notes due 2031, aggregate principal amount $375 million, including the exercised option for additional notes.
- Net proceeds from the convertible notes of $342.9 million, after $10.2 million of debt issuance costs and $21.9 million of capped call transaction premiums.
- Free cash flow of $43.9 million includes $53.2 million of capital expenditures.
- Capital expenditures were 10% of revenue in Q3 2026, above the company's targeted annualized range of 5% to 9% of revenue; year-to-date capital expenditures were 8.6% of revenue, within the range.
- Inventory increased $30.5 million from the prior quarter to $535 million. The company said $29.5 million of the increase was an addition associated with the acquisition of ElevATE Semiconductor, and without it inventory would have been approximately flat.
Analysis
Diodes reported record third quarter 2026 revenue of $532.6 million, up 35.8% from $392.2 million in the prior-year quarter and 19.5% from $445.5 million in the second quarter 2026. GAAP gross profit was $192.5 million, or 36.1% of revenue, compared with 30.7% a year earlier and 33.1% in the prior quarter. Non-GAAP gross margin was 36.2%. Management attributes the margin gain to product mix, price adjustments and improved capacity loading. Demand is described as broad: automotive revenue rose almost 60% year-over-year to a quarterly record, industrial rose 50%, and computing rose 33%, with AI servers, data center and enterprise storage cited as drivers. Global POS was a record and rose more than 30% year-over-year, while channel inventory fell below the company's normal range of 11 to 14 weeks.
Profitability moved sharply higher. GAAP net income was $43.7 million, or $0.95 per diluted share, compared with $14.3 million, or $0.31 per diluted share, a year earlier and $46.6 million, or $1, in the prior quarter. Non-GAAP adjusted net income was $54.5 million, or $1.18 per diluted share, against $17.2 million, or $0.37 per share a year earlier and $32.5 million, or $0.70 per share in the prior quarter. EBITDA was $89.7 million, or 16.8% of revenue, compared with $46.6 million, or 11.9%, a year earlier. GAAP operating expenses were $129.1 million, or 24.2% of revenue, against $114.3 million in the prior quarter. The filing gives no operating income line, so the operating result cannot be read directly from the document.
Cash generation and the balance sheet changed in the quarter. Operating cash flow was $97.2 million and free cash flow was $43.9 million after $53.2 million of capital expenditures, which the CFO said were 10% of revenue, above the company's 5% to 9% target range, with year-to-date capex at 8.6%. The company issued $375 million of 0% convertible senior notes due 2031, netting $342.9 million, and used $35 million of the proceeds to repurchase 360,119 shares in a privately negotiated transaction. Total debt was approximately $405 million, cash and short-term investments approximately $578 million, and working capital approximately $1.1 billion. Inventory rose $30.5 million to $535 million, of which $29.5 million was added through the ElevATE Semiconductor acquisition. Total inventory days fell 11 days to approximately 141.
The fourth quarter guide is for revenue of approximately $550 million, plus or minus 3%, which the CFO said represents a 40.4% increase year-over-year and a 3.2% increase sequentially at the midpoint. Non-GAAP gross margin is guided to 37% plus or minus 1% and non-GAAP adjusted EPS to $1.35 plus or minus $0.10. The CEO said full year 2026 revenue is expected to rise approximately 30% over 2025 at the midpoint. The SVP Sales said the fourth quarter guide assumes growth of more than 3%, compared with the company's usual 5% to 6% decline in that quarter, and attributed this to backlog and design pipeline visibility. The company also said notebook and PC softness is expected to be offset by AI server, data center and enterprise storage demand.
The figures that deserve most attention are the gap between GAAP and non-GAAP earnings in the quarter, the capex level above the stated target range, the inventory build and the Q4 sequential assumption. The filing states that non-GAAP results excluded $7.9 million net of tax of unrealized loss on investments, $4.2 million of acquisition intangible amortization, $3 million gain on disposal of subsidiary, $1.4 million of acquisition costs and $0.3 million of acquisition related inventory amortization. The company also states that non-cash share-based compensation of $7.4 million net of tax would reduce both GAAP and non-GAAP per-share earnings by $0.16 if included. The document contains no press release, no prior-period outlook and no share price reaction, so this read compares only the figures printed in the transcript.
Management, verbatim
our third quarter revenue reached record level coupled with an over 500 basis point year-over-year. Increasing in gross margin to 36.1%, driving significant expansion in non-GAAP earnings.
Gary Yu, President, Chief Executive Officer & Director
For the fourth quarter, we expect revenue to increase to approximately $550 million, plus or minus 3%.
Brett R. Whitmire, Chief Financial Officer
we are guiding more than 3% quarter-over-quarter growth compared to our usual 5% to 6%, down.
Emily Yang, Senior Vice President-Worldwide Sales & Marketing
Not in the filing
stated, not guessed- The document is a call transcript labelled Exhibit 99.1. The earnings press release and CFO commentary referenced on the call are not included, so GAAP and non-GAAP reconciliations, the income statement, and balance sheet totals are unavailable.
- No prior-period outlook was provided, so vs_prior_guidance is empty.
- GAAP operating income and non-GAAP operating income for Q3 2026 are not printed.
- Prior-year non-GAAP gross profit and non-GAAP gross margin for Q3 2025 are not printed.
- Prior-year non-GAAP operating expenses for Q3 2025 are not printed.
- Prior-year and prior-quarter change percentages for GAAP net income and non-GAAP net income are not printed.
- GAAP Q4 2026 operating expenses, tax rate and EPS guidance are not printed. Only the full year tax rate is printed.
- Full year 2026 revenue guidance in dollar terms and full year 2025 revenue are not printed.
- Segment revenue in dollar terms is not printed. End market and geographic splits are given only as percentages of product or total revenue.
- Total assets and total stockholders' equity are not printed.
- Prior-quarter total debt, cash and working capital figures are not printed.
- Share price reaction, consensus estimates and analyst expectations are not in the document.
- Prior-year inventory dollars and prior-quarter inventory dollars are not printed as totals; only the change of $30.5 million is printed.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Diodes Inc. held its Q3 2026 earnings call, presenting unaudited results and forward-looking statements.
Ticker impact
DIOD reported Q3 2026 revenue of $532.6 million, up ~36% YoY, and issued guidance for full-year revenue to increase ~30% over 2025.
likely upside as the market prices in the reaffirmed guidance
Robust revenue growth and reaffirmed guidance typically drive buying interest in the near term.
Market effects
Positive earnings may lift the broader semiconductor equipment sector.
U.S. tech stocks could see modest gains.
Limited to investors tracking semiconductor supply chain.
Counterpoint
If the guidance is overly optimistic, the stock could face a pullback on later detailed guidance.
Key entities
- ExecutiveGary Yu
President and CEO of Diodes, Inc.
- ExecutiveBrett Whitmire
Chief Financial Officer of Diodes, Inc.
