Alpha and Omega Semiconductor Limited

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Good afternoon, everyone, and welcome to Alpha and Omega Semiconductor's conference call to discuss fiscal 2025 third quarter financial results for the quarter ended March 31st, 2025. I'm Stephen Pelleo, investor relations representative for AOS. With me today are Stephen Chang, our CEO, and Yifan Liang, our CFO. This call is being recorded and broadcast live over the web. A replay will be available for seven days following the call via the link in the investor relations section of our website. Our call will proceed as follows today. Stephen will begin business updates, including strategic highlights and a detailed segment report. After that, Yifan will review the financial results and provide guidance for the June quarter. Finally, we will have a Q&A session. The earnings release was distributed over the wire today, May 7, 2025, after the market closed. The release is also posted on the company's website. Our earnings release and this presentation include non-GAAP financial measures. We use non-GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors in conjunction with the GAAP measures. A reconciliation of these non-GAAP measures to comparable GAAP measures is included in the earnings release. We remind you that during this conference call, we will make certain forward-looking statements, including discussions of the business outlook and financial projections. These forward-looking statements are based on management's current expectations and about risks and uncertainties that could cause our actual results to differ materially. For a more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC. We assume no obligation to update the information provided in today's call. Now, I'll turn the call over to our CEO, Stephen Chang. Stephen?

Thank you, Stephen. Welcome to Alpha and Omega's fiscal Q3 earnings call. I will begin with a high-level overview of our results and then jump into segment details. We delivered fiscal Q3 revenue and EPS results at the high end of our guidance, driven by better-than-expected demand in computing. Revenue was $164.6 million. Non-GAAP growth margin was 22.5%. Non-GAAP EPS was a loss of 10 cents. Total revenue increased 9.7% year-over-year and declined 4.9% sequentially. As previously noted, licensing revenue began to wind down in the March quarter. Excluding licensing, our product revenue was up 11.6% year-over-year and down 3.5% sequentially. We saw seasonal sequential declines in fiscal Q3 from each of our major segments, except the computing segment, which grew slightly sequentially against seasonality driven by tablets and notebooks. The computing segment increased nearly 15% year over year. Looking ahead, we face a dynamic landscape with macroeconomic, geopolitical, and trade-related uncertainties. Currently, our direct tariff exposure is minimal due to limited U.S. shipments, but we're closely supporting customers navigating supply chain complexities to ensure compliance and minimize disruptions. While we're seeing a near-term uplift in the first half of the calendar year, broader visibility for the second half of 2025 remains uncertain. Nonetheless, we are delivering on our commitments and advancing our transformation from a component supplier to a total solutions provider. Our goal is to leverage premier customer relationships to expand market share and increase bond content with a broader portfolio. With that, let me now cover our segment results and provide some guidance by segment for the next quarter, starting with computing. March quarter revenue was up 14.8% year over year and up 3.6% sequentially and represented 47.9% of total revenue. These results were ahead of our original expectations for a slight decline. The upside was driven by better than expected tablet demand, with revenue nearly doubling year over year to a quarterly record due to market share gains, as well as some demand pull-in for notebooks due to tariff uncertainties. In the March quarter, we continue to experience robust demand for graphics and AI accelerator cards, driven by a key customer scaling their next-generation platform. Looking ahead to June, we anticipate even stronger performance with graphics card revenue projected to reach a record high. For AI applications, demand for high-performance commute remains robust, and we are encouraged by this continued strong growth in data center capital spending. In Q1, we broadened our penetration with an existing premier customer to secure a design win in one data center application with a notable increase in BOM content. This is a testament to our ability to provide total solutions with multi-phase controllers and multiple power stages per GPU. Volume production for this program started in the March quarter and will continue into the June quarter. Design-in activity is still ongoing for additional programs. However, visibility for the second half of the year remains limited due to uncertainties in end market demand. In the PC market, we expect continued pull-in activity through the June quarter driven by fluid trade regulations. In summary, we expect the computing segment to increase mid-single digits in the June quarter and more than 15% year-over-year. The sequential growth is driven by PC-related pull-ins and strength in graphics cards. However, it is important to note that visibility into the second half of the year remains limited due to uncertain macro environment and evolving trade policies. Turning to the consumer segment, March quarter revenue was down 9% year over year and down 4.9% sequentially and represented 13% of total revenue. The results were in line with our forecast driven by seasonality in gaming and home appliances, as well as a pullback in wearables following a record level achieved in the third calendar quarter of 2024. For the June quarter, we forecast more than 25% sequential growth in the consumer segment driven by gaming and home appliances. Gaming is expected to be particularly strong due to pull-ins for a targeted marketing push from a key customer. Next, let's discuss the communication segment. Revenue in the March quarter was up 5.8% year-over-year, down 14.4% sequentially, and represented 17.2% of total revenue. The results were in line with our expectations for a seasonal sequential decline from our Tier 1 U.S. smartphone customer, while China OEMs moderated only slightly, and Korea was sluggish as customers prepared for product launches in their first calendar quarter. We believe communications results continue to reflect a combination of market share gains, a mixed shift to higher end phones in China, and generally higher charging currents, driving increased bond content. Looking ahead, we anticipate flatter sequential growth in the June quarter for the communications segment. By region, we expect growth from smartphone customers in the U.S. and Korea, offset by slower sales from China. Now let's talk about our last segment, power supply and industrial, which accounted for 19.9% of total revenue and was up 32.4% year over year and down 6.2% sequentially. The results were ahead of our forecast for a low teen sequential decline, primarily driven by a seasonal decline in quickchargers, offset by sequential growth in e-mobility and ACDC power supplies. As we stated before, we see additional opportunities in 2025 for quick charges due to increased bond content driven by higher charging currents. Further, we are leveraging relationships in Taiwan to partner on DC fans for server racks. For the June quarter, we expect revenue to be flat to slightly down sequentially for the power supply and industrial segment primarily driven by a seasonal increase in quick chargers and ACDC power supplies offset by lower e-mobility revenue. In closing, we are pleased that March quarter results were better than expected, ahead of seasonality primarily due to pull-ins in the computing segment. Looking ahead, we face a dynamic geopolitical and macroeconomic environment. We are monitoring developments, ensuring compliance, diversifying our supply chain, and collaborating with customers to minimize disruptions. For the June quarter, driven by strength in computing and consumer segments, We currently expect low to mid single-digit sequential revenue growth, suggesting June quarter revenue should approximate the levels achieved in the December quarter, despite the stronger March results and discontinuation of licensing revenue. Excluding the impact from discontinued licensing revenue, we expect mid to upper single-digit revenue growth. Gross margins in June should also approach the level achieved in the December quarter, driven by improved utilization rates and a richer product mix. Our business fundamentals remain strong, supported by cutting-edge technology, a diverse product portfolio, and marquee customer base. We expect revenue growth in calendar 2025 driven by new market expansion, market share gains, and increased bond content. While near-term uncertainties remain, our focus remains steadfast on executing our strategy and delivering sustained value for our stakeholders. With that, I will now turn the call over to Yifan for a discussion of our fiscal third quarter financial results and our outlook for the next quarter. Yifan.