Diodes Incorporated

Good afternoon and welcome to Diodes Incorporated's second quarter 2026 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 the zero on your touchstone phone. As a reminder, this conference call is being recorded today. Wednesday, August 5, 2026. I would now like to turn the call over to Leanne Sievers of Shelton Group Investor Relations. Leanne, please go ahead.

Good afternoon and welcome to DIODE's second quarter 2026 financial results conference call. I'm Leanne Sievers, president of Shelton Group, DIODE's investor relations firm. Joining us today are DIOD's President and CEO, Gerry Yu, CFO, Brett Whitmire, Senior Vice President of Worldwide Sales and Marketing, Emily Yang, and Vice President of Marketing and 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 in 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 June 30, 2026. 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, August 5, 2026. DAS assumes no obligation to update these projections in the future, as market conditions may or may not change, except 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 this 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 DIOD's website at www.diodes.com. And now I'll turn the call over to DIOD's President and CEO, Gerry Yu. Gerry, please go ahead.

Welcome, everyone, and thank you for joining us on today's conference call. After announcing our press release earlier today, We extend our momentum in the second quarter, with revenue again increasing more than 20% year-over-year, driven by growth across all regions. Revenue also increased 10% sequentially, coupled with a record global POS. At the fifth consecutive quarter of double-digit year-over-year growth, this quarter serves as a further confirmation of strengthening demand in overall markets. Combined with DAL's expanding content across all analog and power solutions, in our key focus areas of automotive, industrial, and AI survey-related applications. Automotive revenue reached a record level of 21% of our product revenue. We continue to drive increased content with an expanding pipeline of new products that's resulting in consistent market share gains across our region's auto manufacturers and suppliers. Also, during the quarter, the cost and operating initiative we previously implemented during the market slowdown are producing measurable benefit to gross margin and our bottom line, with margin increasing 160 basis point year-over-year and non-gap earnings increasing by more than 100% again this quarter. These actions have also contributed to increase the cash flow that has enabled us to reinvest in our growth and innovations. while also looking for inorganic opportunity to expand our technology portfolio, such as recent proposed acquisition of Elevate Semiconductor. Elevate is a family semiconductor company that's specialized in development of integrated circuit of automated test equipment, or ATE. The explosive growth, increasing complexity, and the high performance requirements of IC using automotive, industrial data center, and AI applications are driving greater semiconductor production volume and, in turn, increasing demand for automaker tech equipment. This acquisition enhanced our ability to provide a broader solution to customers and launch a new and advanced product line that will drive increased dollar content in AP applications. I also want to add that this acquisition is immediate accretive and expect to add approximately $15 million of revenue in the first 12 months post-post, with revenue expected to grow at a CAGR of greater than 20% over the next four years and with gross margin significantly higher than balanced corporate average. As we look to the third quarter, we expect to extend our accelerating traction, with revenue anticipated to increase 30% year-over-year and a 14% suppression rate at the midpoint. We also expect to deliver another 190 basis point suppression improvement in gross margin. As our utilization continues to improve, combined with a 2.8 times year-over-year improvement in non-debt earnings, these expected results drive us closer to our three-year financial goals of $2 billion in annual revenue and over $4 in non-debt EPS. With that, let me now turn the call over to Brett to discuss our second quarter financial results as well as third quarter guidance in more detail.