Silicon Motion Technology Corporation has released its financial performance report for the quarter ending March 31, 2025, revealing a decline in both net sales and earnings compared to the previous quarter.
Financial Overview for 1Q 2025
In the first quarter of 2025, the company reported net sales of $166.5 million, down from $191.2 million in the fourth quarter of 2024. Net income also saw a decrease, landing at $19.5 million, or $0.58 per diluted American depositary share (ADS), compared to $21.6 million or $0.64 per diluted ADS in the prior quarter. When examining non-GAAP figures, net income was $20.3 million, or $0.60 per diluted ADS, a decline from $29.4 million or $0.87 per diluted ADS in the fourth quarter of 2024.
Key Financial Results
| ($ in millions, except per ADS amounts) | GAAP | Non-GAAP | ||||
| 1Q 2025 | 4Q 2024 | 1Q 2024 | 1Q 2025 | 4Q 2024 | 1Q 2024 | |
| Revenue | $166.5 | $191.2 | $189.3 | $166.5 | $191.2 | $189.3 |
| Gross Profit | $78.4 | $87.6 | $85.1 | $78.4 | $87.9 | $85.2 |
| Operating Expenses | $68.6 | $69.9 | $67.2 | $63.6 | $58.3 | $62.5 |
| Operating Profit | $9.8 | $17.7 | $18.0 | $14.9 | $29.6 | $22.6 |
| Earnings per Diluted ADS | $0.58 | $0.64 | $0.48 | $0.60 | $0.87 | $0.64 |
Business Performance Highlights
Wallace Kou, President and CEO of Silicon Motion, indicated that despite an unpredictable economic landscape, the company had managed to perform well, achieving revenue at the upper limit of their guidance, along with continued gross margin improvement. He noted that demand for their PCIe Gen 5 controller was unexpectedly strong, fueled by rising AI inference requirements. Additional support came from increased interest in eMMC and UFS controllers due to a revival in the smartphone sector and market share gains.
Long-term Business Strategy
Silicon Motion is committed to diversifying its product offerings and expanding into new markets. The company anticipates significant growth from new product introductions, including advanced controllers slated for release throughout 2025. With plans to enhance their automotive product lineup and address various applications, they are optimistic about future consumer market recovery in the latter half of 2025.
Outlook for the Second Quarter of 2025
The company projects revenue between $175 million to $183 million, signifying a quarter-over-quarter increase of 5% to 10%. Gross margins are expected to range from 47.0% to 48.0%. Operating margins are forecasted between 6.6% to 9.2%, with the non-GAAP operating margin projected to exclude various stock-based compensations and other adjustments.
Shareholder Value Initiatives
In a move to enhance shareholder value, the Board of Directors authorized a new $50 million share repurchase program. In the first quarter of 2025, the company repurchased $24.3 million of ADSs at an average price of $56.96 per share.
For additional information, the management team hosted a conference call on April 30, 2025, which can be accessed on the company’s website.