Diodes Incorporated

Good afternoon, and welcome to Diodes Incorporated's first quarter 2025 financial results conference call. At this time, all participants are in a listen-only mode. At the conclusion of today's conference call, instructions will be given for the question and answer session. If anyone needs assistance at any time during the conference call, please press the star key followed by zero on your touchstone phone. As a reminder, this conference call is being recorded today, Thursday, May 8, 2025. I would now like to turn the call over to Leanne Seavers of Shelton Group Investor Relations. Leanne, please go ahead.

Good afternoon, and welcome to Diode's first quarter 2025 financial results conference call. I'm Leanne Seavers, president of Shelton Group, Diode's investor relations firm. Joining us today are Diode's president, Gary Yu, chief financial officer, Brett Whitmire, senior vice president of worldwide sales and marketing, Emily Yang, and director of 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 March 31, 2025. 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, May 8, 2025. DAS 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 statements 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 the 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 Diode's website at www.diodes.com. And now I'll turn the call over to Diode's president, Gary Yu. Gary, please go ahead.

Welcome, everyone, and thank you for joining us on today's conference call. As announced in our press release earlier today, we deliver another quarter of year-over-year growth, achieving a 10% increase as the recovery in our target end markets continue to improve. First quarter revenue exceeds our expectation due to better than seasonal performance in the computing market in Asia, primarily driven by increasing opportunity for BIOS products in AI-related applications. Additionally, we are seeing improving market conditions in Europe and North America. as those regions have begun to show signs of rebounding from recent lows. Our automotive and industrial market totaled 42% of first quarter product revenue as we continue to see expanding automotive content and the design opportunities. Another notable indication of improving conditions is channel inventory dollars and the days have continued to decrease and appear to be more aligned with real demand and historical POS levels. Although the inventory depletion is a positive sign for dials and the broader market, the reduction in channel and internal inventory combined with the absorbing the Chinese New Year holiday temporarily limited increased loading at our manufacturing facility and therefore gross margins. As channel inventory continues to normalize and the global demand improves, we should see a more material expansion to gross margin in future quarters. Additionally, qualifying more product in our internal facility to increase loading, combined with recovery in our higher margin automotive and industrial markets, will also contribute to driving future margin improvement. As further evidence of increasing momentum, we are guiding for the third consecutive quarter of year-over-year growth, and with second quarter also expected to be the first quarter of both year-over-year and sequential growth in this recovery cycle. Even though the global market remains dynamic, especially with the recent tariffs, DAOs is strategically positioned to meet global customers' needs with our hybrid manufacturing model and internal facilities located across the US, China, Taiwan, and the UK. One final comment before turning the call over to Brad. As you may have seen, we also announced today a $100 million stock repurchase program. which further reiterate our confidence in the business and the future growth prospects. That's in a unique position with our strong cash flow generation and a healthy balance sheet to continue investing both organically and in MMA, while also returning capital to stockholders through this share buyback. With that, let me now turn the call over to Brad to discuss our first quarter 2025 financial results, as well as second quarter Guide us in more detail.