Core Viewpoint - Silicon Motion Technology is positioned for growth despite supply constraints in the DRAM and NAND markets, driven by strong demand in AI and other sectors, and is expected to achieve record revenue in 2026 [1][4]. Group 1: Financial Performance - The company reported fourth-quarter revenue of $278.5 million, representing over 45% year-over-year growth, and a non-GAAP gross margin of 49.2% [3][10]. - For Q1 2026, revenue is forecasted to be between $292 million and $306 million, indicating a sequential growth of 5% to 10% [13]. - Non-GAAP operating expenses rose to $83.2 million due to investments in AI and enterprise initiatives, while operating margin increased to 19.3% [11]. Group 2: Market Dynamics - Rapid AI adoption is increasing demand for memory and storage technologies, leading to supply constraints and price pressures across various markets, including AI, enterprise storage, PCs, and smartphones [2][4]. - The company is experiencing strong demand for its PCIe Gen5 client SSD controllers and expects to grow its market share in the client PC segment [5][6]. Group 3: Product Development and Strategy - Silicon Motion is ramping up production of its MonTitan family of products, targeting 5% to 10% of revenue by the end of 2026, and plans to tape out a 4-nanometer PCIe 6 version in 2026 [5][8]. - The company is also focusing on enterprise SSD solutions and has begun end-user qualification for high-performance compute SSDs, with commercial ramp expected in the second half of 2026 [7][9]. Group 4: Supply Chain and Procurement - The company is navigating supply tightness and rising component costs by leveraging long-standing relationships with major flash vendors, which is expected to mitigate supply constraints [1][4][15]. - Management acknowledged the impact of NAND scarcity on gross margins, particularly for boot drive products, and is actively negotiating pricing with customers [9][14].

Core Viewpoint - Silicon Motion's stock experienced a significant increase following a positive earnings outlook for the current quarter, with the company reporting better-than-expected revenue and earnings for the fourth quarter [1] Financial Performance - Adjusted earnings for Silicon Motion rose by 38% year over year, reaching $1.26 per share in the December quarter [1] - Revenue for the fourth quarter increased by 46% to $278.5 million, surpassing estimates of $261 million [1] Technical Performance - Silicon Motion Tech ADR received a Relative Strength Rating upgrade, indicating improved technical performance [1] - The stock's Relative Strength Rating has shown a notable increase, reaching a benchmark of 80-plus [1]

Financial Data and Key Metrics Changes - In Q4 2025, sales increased by 15% sequentially and over 45% year-on-year to $278.5 million, surpassing the $1 billion target run rate set at the start of the year [25] - Gross margins increased to 49.2%, benefiting from new product introductions and a shift towards client PC products [26] - Operating margin increased to 19.3%, driven by higher-than-expected revenue and gross margin during the quarter [26] - Earnings per ADS were $1.26, with total stock compensation of $15.8 million in Q4 [26] Business Line Data and Key Metrics Changes - The eMMC and UFS business grew by 25% for the full year, outperforming the smartphone and embedded market [12] - The client SSD business marked a turning point with the success of new PCIe 5 controllers, aiming to grow market share from 30% to 40% over the next few years [15] - The enterprise business is expanding, with expectations for data center and AI infrastructure investment to exceed $1 trillion by 2030 [17] Market Data and Key Metrics Changes - The rapid adoption of AI has led to significant demand across all memory and storage technologies, resulting in supply constraints and increasing pricing pressure [10] - The smartphone market is expected to decline due to higher DRAM and NAND component costs, but the company anticipates growth in automotive, mobile, PC, and enterprise SSD markets [11] - The overall PC market is expected to experience a decline of 5%-10% in unit shipments in 2026, but the company expects to grow its market share [62] Company Strategy and Development Direction - The company is focused on long-term growth while investing heavily in next-generation products and increasing engineering resources [8] - The introduction of new products, including eMMC, UFS controllers, and MonTitan enterprise SSD controllers, is expected to drive broad-based growth [9] - The company aims to capitalize on multiple new products and execute a diversification strategy to enhance market share [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging dynamics in the memory and storage industry due to supply tightness and increasing prices but remains confident in the company's resilient operational strategy [9] - The first quarter of 2026 is expected to be the lowest revenue quarter, with sequential growth anticipated throughout the year [9] - Management is optimistic about achieving record revenue in 2026, driven by strong demand and a robust product pipeline [30] Other Important Information - The company plans to tape out its first 4 nm chip, a PCIe 6 version of MonTitan, targeting hyperscalers and other Tier 1 customers [19] - The enterprise-grade boot drive storage business is evolving into a significant growth area, with volume shipments starting to leading AI GPU makers [20] Q&A Session Summary Question: How should the mix of eMMC, UFS revenue be understood? - The majority of UFS controller revenue comes from smartphones, while eMMC controllers are primarily in IoT devices and automotive [34] Question: How will revenue contribution from BlueField play out? - Revenue from BlueField will depend on NAND procurement, which may impact gross margins due to market price fluctuations [36] Question: How is revenue from boot drive and MonTitan segmented? - Boot drive revenue is part of SSD solutions, while MonTitan is categorized under the controller business [41] Question: What is driving smartphone strength in Q1? - Market share gains from module makers using Silicon Motion controllers are contributing to smartphone strength [45] Question: What are the expectations for the client SSD controller market? - The company anticipates a decline in PC unit shipments but expects to grow market share and ASPs through PCIe 5 adoption [62] Question: What is the potential size of the boot drive storage business? - The boot drive business is expected to generate around $50 million in revenue this year, with significant growth anticipated next year [73]

Financial Data and Key Metrics Changes - In Q4 2025, sales increased by 15% sequentially and over 45% year-on-year to $278.5 million, surpassing the $1 billion target run rate set at the start of the year [23] - Gross margins increased to 49.2%, benefiting from new product introductions and a shift towards client PC products [24] - Operating margin increased to 19.3%, driven by higher-than-expected revenue and gross margin [24] Business Line Data and Key Metrics Changes - The eMMC and UFS business grew by 25% for the full year, outperforming the smartphone and embedded market [11] - The client SSD business marked a turning point with the success of new PCIe 5 controllers, aiming to grow market share from 30% to 40% over the next few years [14] - The enterprise business is expected to grow significantly, with data center and AI infrastructure investments projected to exceed $1 trillion by 2030 [16] Market Data and Key Metrics Changes - The rapid adoption of AI has led to increased demand across all memory and storage technologies, resulting in supply constraints and rising prices [9] - The smartphone market is expected to decline due to higher component costs, but the company anticipates growth in automotive, mobile, PC, and enterprise SSD markets [10] - The overall PC market is projected to experience a 5%-10% decline in unit shipments, but the company expects to gain market share due to strong relationships with module makers [60] Company Strategy and Development Direction - The company is focused on long-term growth by investing in next-generation products and increasing engineering resources [7] - A diversification strategy is in place to capture growth in multiple markets, including automotive and enterprise storage [29] - The introduction of new products, such as MonTitan enterprise SSD controllers and boot drive solutions, is expected to drive significant growth [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging dynamics in the memory and storage industry but believes the company's resilient operational strategy will support growth [8] - The first quarter of 2026 is expected to be the lowest revenue quarter, with sequential growth anticipated throughout the year [8] - Management remains confident in achieving record revenue in 2026, driven by strong demand and a robust product pipeline [28] Other Important Information - The company is experiencing strong demand for its Ferri storage solution from automotive and industrial customers [21] - Cash and cash equivalents at the end of Q4 2025 were $277.1 million, up from $272.4 million in Q3 2025 [25] - The company plans to tape out its first 4-nanometer chip in 2026, targeting hyperscalers and other Tier One customers [18] Q&A Session Summary Question: How should the mix of eMMC and UFS revenue be expected to change? - The majority of UFS controller revenue comes from smartphones, while eMMC controllers are primarily in IoT and automotive applications [32] Question: What is the expected revenue contribution from BlueField? - Revenue from BlueField is anticipated to impact gross margins due to the need to procure NAND, but costs can be passed to customers [34] Question: How is the smartphone strength expected to evolve in Q1? - Market share gains are driving strength, with module makers increasingly using the company's controllers [43] Question: What are the growth expectations for the enterprise segment? - The enterprise controller segment is expected to grow much faster, with mobile controllers contributing significantly to overall revenue [58] Question: What is the outlook for the boot drive storage business? - The boot drive business is projected to grow significantly, with revenue expected to increase in 2026 [70]

Financial Data and Key Metrics Changes - In Q4 2025, sales increased by 15% sequentially and over 45% year-on-year to $278.5 million, surpassing the $1 billion target run rate set at the start of the year [24][25] - Gross margins increased to 49.2%, benefiting from new product introductions and a shift towards client PC products [25] - Operating margin increased to 19.3%, driven by higher-than-expected revenue and gross margin [25] Business Line Data and Key Metrics Changes - The eMMC and UFS business grew by 25% for the full year, outperforming the smartphone and embedded market [11][12] - The client SSD business marked a turning point with the success of new PCIe 5 controllers, aiming to grow market share from 30% to 40% over the next few years [13] - The enterprise business is expanding, with expectations for data center and AI infrastructure investment to exceed $1 trillion by 2030 [16] Market Data and Key Metrics Changes - The rapid adoption of AI has led to significant demand across memory and storage technology, resulting in supply constraints and increasing pricing pressure [9][10] - The smartphone market is expected to decline due to higher DRAM and NAND component costs, but the company expects to continue gaining market share [12][45] - The automotive and industrial sectors are seeing strong demand for Ferri storage solutions, with customers relying on steady supply [21] Company Strategy and Development Direction - The company is focused on long-term growth while investing heavily in next-generation products and increasing engineering resources [6][8] - A diversification strategy is in place, with successful entry into the enterprise market through boot drive storage solutions [29] - The company aims to capitalize on multiple new products and execute a continuing diversification strategy to drive growth [8][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenging dynamics in the memory and storage industry but believes the company's resilient operational strategy will allow for strong growth [7][10] - The first quarter of 2026 is expected to be the lowest revenue quarter, with sequential growth anticipated throughout the year [8][27] - The company remains confident in delivering record revenue in 2026, supported by a strong backlog and market share gains [28][30] Other Important Information - The company plans to tape out its first 4-nanometer chip in 2026, targeting hyperscalers and other Tier One customers [18] - The boot drive storage business is evolving into a significant growth area, with volume shipments starting to leading AI GPU makers [20][72] Q&A Session Summary Question: How should the mix of eMMC and UFS revenue be expected to change? - The majority of UFS controller revenue comes from smartphones, while eMMC is primarily in IoT and automotive [33] Question: How will revenue contribution from BlueField play out? - Revenue from BlueField will require procuring NAND, which may impact gross margins, but costs can be passed to customers [34][35] Question: How is revenue from boot drive and MonTitan segmented? - Boot drive revenue is part of SSD solutions, while MonTitan is categorized under the controller business [39][41] Question: What is driving smartphone strength in Q1? - Market share gains from module makers using Silicon Motion controllers are driving strength in the smartphone segment [45] Question: What are the expectations for sequential growth through the year? - Growth is expected primarily from eMMC and UFS, with MonTitan products ramping in the back half of the year [48][51] Question: What is the potential size of the boot drive storage business? - Revenue from the boot drive business is expected to be around $50 million this year, with significant growth anticipated next year [72]

Core Insights - Silicon Motion Technology Corporation (SIMO) reported mixed fourth-quarter 2025 results, with revenues exceeding estimates while adjusted earnings fell short [1] Financial Performance - Net income on a GAAP basis improved to $47.7 million or $1.41 per American depositary share (ADS) from $21.6 million or 64 cents per ADS in the prior-year quarter, primarily due to higher net sales [3] - Non-GAAP net income was $42.7 million or $1.26 per ADS compared to $29.4 million or 87 cents per ADS in the year-ago quarter, missing the Zacks Consensus Estimate of $1.29 per ADS [3] - For 2025, GAAP net income was $122.6 million or $3.64 per ADS compared to $89.2 million or $2.65 per ADS in 2024 [4] - Non-GAAP net income for 2025 was $119.8 million or $3.55 per ADS compared to $114.5 million or $3.39 per ADS in 2024 [4] Revenue Growth - Quarterly revenues increased to $278.5 million from $191.2 million in the year-ago quarter, beating the Zacks Consensus Estimate of $261.2 million [5] - For 2025, revenues rose to $885.6 million from $803.6 million in 2024 [5] - Sales of SSD controllers increased by 35-40% year over year, while eMMC + UFS sales grew by 50-55%, and revenues in SSD solutions surged by 110-115% year over year [6] Profitability Metrics - Non-GAAP gross profit reached $137 million compared to $87.9 million in the year-ago quarter, with respective margins of 49.2% and 46% [7] - For 2025, non-GAAP gross profit increased to $427.9 million from $369.3 million in 2024, with margins of 48.3% and 46% [7] - Non-GAAP operating expenses rose to $83.2 million from $58.3 million in the prior year, but non-GAAP operating income increased to $53.8 million from $29.6 million, with margins of 19.3% and 15.5% respectively [8] Cash Flow and Liquidity - As of December 31, 2025, cash and cash equivalents were $201.8 million compared to $276.1 million a year ago [9] - The company generated $1.6 million in cash from operations during the reported quarter, down from $6.2 million in the prior-year quarter [10] - For 2025, cash generated from operating activities was $61.4 million compared to $77.1 million in 2024 [10] Future Guidance - For the first quarter of 2026, management estimates non-GAAP revenues in the range of $292-$306 million, with a gross margin expected to be between 46-47% [11]

Silicon Motion 4Q25 Earnings Highlights NASDAQ: SIMO February 4, 2026 Safe Harbor Statement Agenda 4Q 2025 Operating Highlights Financial (Non-GAAP) Financial (GAAP) Business 3 • Revenue = $278.5m (+15% QoQ, +46% Y/Y) • Gross Margin = 49.2% (vs. 48.7% prior Qtr) • Operating Exp = $83.2m (vs. $79.5m prior Qtr) • Operating Margin = 19.3% (vs. 15.8% prior Qtr) • EPS (diluted) = $1.26 (vs. $1.00 prior Qtr) • Revenue = $278.5m (+15% QoQ, +46% Y/Y) • Gross Margin = 49.1% (vs. 48.6% prior Qtr) • Operating Exp = $1 ...

Core Insights - Silicon Motion Technology Corporation reported strong financial results for Q4 2025, with net sales reaching $278.5 million, a 15% increase quarter-over-quarter (Q/Q) and a 46% increase year-over-year (Y/Y) [2][5] - The company experienced significant growth across all business lines, particularly in SSD controllers and eMMC/UFS products, contributing to an overall positive outlook for 2026 [4][9] Financial Highlights - Q4 2025 GAAP net income was $47.7 million, or $1.41 per diluted ADS, up from $39.1 million, or $1.16 per diluted ADS in Q3 2025 [2][3] - For the full year 2025, net sales totaled $885.6 million, reflecting a 10% increase Y/Y [6] - Gross margin for Q4 2025 was 49.1% (GAAP) and 49.2% (Non-GAAP), while operating margin was 11.4% (GAAP) and 19.3% (Non-GAAP) [6] Business Performance - SSD controller sales grew by 25% to 30% Q/Q and 35% to 40% Y/Y in Q4 2025 [5] - eMMC and UFS controller sales increased by 0% to 5% Q/Q and 50% to 55% Y/Y [5] - SSD solutions sales surged by 125% to 130% Q/Q and 110% to 115% Y/Y [5] Shareholder Returns - The company announced an annual cash dividend of $2.00 per ADS, with the first installment of $16.7 million paid on November 26, 2025 [8][9] Future Outlook - Management anticipates a significantly stronger-than-seasonal start to 2026, with revenue and profitability growth expected to continue throughout the year [9][10]

Business Highlights - The company announced an annual cash dividend of $2.00 per American Depositary Share (ADS) [8] Financial Highlights - For Q4 2025, net sales reached $278.5 million, representing a 15% increase quarter-over-quarter (Q/Q) and a 46% increase year-over-year (Y/Y) [2][5] - Gross margin for Q4 2025 was 49.1% (GAAP) and 49.2% (Non-GAAP) [6] - Operating margin for Q4 2025 was 11.4% (GAAP) and 19.3% (Non-GAAP) [6] - Earnings per diluted ADS for Q4 2025 were $1.41 (GAAP) and $1.26 (Non-GAAP) [6] - For the full year 2025, net sales totaled $885.6 million, a 10% increase Y/Y [6] Q4 2025 Review - The company's performance in Q4 2025 was driven by strong sales across all business lines, particularly in client SSD controllers, which grew over 25% Q/Q [4] - The eMMC and UFS product lines also saw sequential growth, primarily due to market share gains [4] - The automotive segment experienced strong growth due to increased product diversification and new customer acquisitions [4] Sales Performance - SSD controller sales in Q4 2025 increased by 25% to 30% Q/Q and 35% to 40% Y/Y [5] - eMMC and UFS controller sales increased by 0% to 5% Q/Q and 50% to 55% Y/Y [5] - SSD solutions sales surged by 125% to 130% Q/Q and 110% to 115% Y/Y [5] Other Financial Information - Cash, cash equivalents, and restricted cash at the end of Q4 2025 were $277.1 million [7] - The company made routine capital expenditures of $6.2 million during Q4 2025 [7] Business Outlook - The company anticipates a significantly stronger-than-seasonal start to 2026, with sustained growth expected throughout the year [9] - Management expects revenue acceleration and profitability growth driven by new products and opportunities across all business lines [9] Shareholder Returns - The first installment of the annual cash dividend of $16.7 million was paid on November 26, 2025, with the second installment scheduled for February 26, 2026 [8]

Company Performance - Silicon Motion (SIMO) stock closed at $118.83, reflecting a +2.29% change from the previous day's closing price, outperforming the S&P 500 which fell by 0.43% [1] - The stock has increased by 25.32% over the past month, significantly surpassing the Computer and Technology sector's gain of 1.51% and the S&P 500's gain of 0.89% [1] Upcoming Earnings - The upcoming earnings report for Silicon Motion is scheduled for February 3, 2026, with an expected EPS of $1.29, indicating a 41.76% increase year-over-year [2] - Revenue is projected at $261.2 million, representing a 36.64% increase compared to the same quarter last year [2] Annual Estimates - For the annual period, Zacks Consensus Estimates predict earnings of $3.58 per share and revenue of $864.54 million, reflecting changes of +4.37% and 0% respectively from the previous year [3] - Recent analyst estimate revisions indicate optimism regarding the company's business and profitability [3] Valuation Metrics - Silicon Motion is currently trading at a Forward P/E ratio of 23.8, which is lower than the industry average of 24.55, suggesting it is trading at a discount [6] - The company has a PEG ratio of 1.12, compared to the average PEG ratio of 0.98 for Computer - Integrated Systems stocks [7] Industry Context - The Computer - Integrated Systems industry is part of the broader Computer and Technology sector, holding a Zacks Industry Rank of 47, placing it in the top 20% of over 250 industries [8] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]