DIODES INC /DEL/

Previous wording

Consumer: IoT: wearables, home automation, home appliances, smart infrastructure, and charging solutions.

Current wording

Consumer: Internet of things (“IoT”): wearables, home automation, home appliances, and charging solutions, and

Previous wording

Net sales were $1.7 billion, a decrease of 16.9% over the $2.0 billion in 2022;

Current wording

Net sales were $1.5 billion, an increase of 13.0% over the $1.3 billion in 2024;

Previous wording

Earnings per share was $4.91 per diluted share, a 31.8% decrease from the $7.20 per diluted share in 2022;

Current wording

Earnings per share was $1.43 per diluted share, a 50.5% increase from the $0.95 per diluted share in 2024;

Previous wording

We achieved $280.9 million of cash flow from operations. We had cash capital expenditures of $150.8 million, or 9.1% of net sales. Net cash flow was a negative $22.6 million, which includes the net pay-down of $124.3 million of total debt.

Current wording

We achieved $215.5 million of cash flow from operations. We had cash capital expenditures of $78.4 million, or 5.3% of net sales. Net cash flow was $57.6 million, which includes the net pay-down of $1.2 million of total debt.

Previous wording

Gross profit margin was 33.2% compared to 39.6% in 2023;

Current wording

Gross profit margin declined to 33.2% compared to 39.6% in 2023;

Previous wording

Operating income decreased 79.9% to $50.4 million, or 3.8% of revenue, compared to $250.6 million, or 15.1% of revenue, in 2023;

Current wording

Operating income decreased 79.9% to $50.5 million, or 3.8% of net sales, compared to $250.6 million, or 15.1% of net sales, in 2023;

Previous wording

Earnings per share was $0.95 per diluted share, an 80.7% decrease from the $4.91 per diluted share in 2023;

Current wording

Earnings per share was $0.95 per diluted share, a 80.6% decrease from the $4.9 per diluted share in 2023;

Previous wording

Our net sales decreased approximately $350.6 million, or 21.1%, for the twelve months ended December 31, 2024, compared to the prior year, due to widespread decreased demand for our semiconductor products and the continued inventory adjustments by the customers that we serve. For the twelve months ended December 31, 2024, weighted-average sales price of the Company’s products decreased 14.9% and volumes decreased 7.3% when compared to the prior year. The decline in weighted-average sales price was primarily due to weaker end-user demand in the automotive and industrial markets which collectively comprised 42% and 46% of product revenue for the twelve months ended December 31, 2024 and 2023, respectively.

Current wording

Our net sales increased approximately $171.0 million, or 13.0%, for the twelve months ended December 31, 2025, compared to the prior year, as we experienced stronger sales across all end markets. For the twelve months ended December 31, 2025, weighted-average sales price of the Company’s products decreased 1.7% and volumes increased 15.0% when compared to the prior year. The decline in weighted-average sales price was primarily due to product mix.

Previous wording

For the twelve months ended December 31, 2024, gross profit decreased approximately 33.8% when compared to the prior year, reflective of the lower revenue in 2024. Gross profit margin for the twelve month periods ended December 31, 2024 and 2023, was 33.2% and 39.6%, respectively. The decrease in gross profit margin was primarily due to the overall reduction in end-market demand driving our overall revenue down, continued inventory reductions by our customers, decreased customer demand in the automotive and industrial markets which lowers the mix of our automotive and industrial revenue as a percentage of the total and lower utilization in our factories. This decrease in gross profit margin includes an decrease in cost of goods sold related to a change in accounting estimate of $4.5 million, however cost of goods sold increased approximately $5.6 million related to total inventory reserves. Average unit cost decreased 6.0% for the twelve months ended December 31, 2024, compared to the same period last year, due to the mix of the product being on lower margin/lower cost products, cost decreases from various foundries, as well as cost reductions from our own factories.

Current wording

For the twelve months ended December 31, 2025, gross profit increased approximately 6.1% when compared to the prior year, reflective of the increased revenue in 2025. Gross profit margin for the twelve month periods ended December 31, 2025 and 2024, was 31.2% and 33.2%, respectively. The decrease in gross profit margin was primarily due to product mix and slower growth in the industrial end market. Average unit cost increased 1.3% for the twelve months ended December 31, 2025, compared to the same period last year, due to the mix of the product being on lower margin/lower cost products, as well as raw material price increases, including gold.

Previous wording

We recognized income tax expense of approximately $11.8 million for the twelve months ended December 31, 2024, and income tax expense of approximately $47.3 million for the twelve months ended December 31, 2023, resulting in effective income tax rates of 18.9% and 17.0%, respectively. The increase in the effective tax rate for 2024 compared to 2023 is primarily attributable to a decrease in overall pre-tax book income, the impact of the geographical mix of pre-tax income and the impact of changes to the outside basis difference in foreign subsidiaries where the Company does not assert permanent reinvestment. Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of European and Asian subsidiaries. Any future distributions of foreign earnings will not be subject to additional U.S. income tax but may be subject to foreign withholding taxes. The Company has recorded outside basis differences in the limited instances where they do not assert permanent reinvestment. As of December 31, 2024, our foreign subsidiaries held approximately $236.3 million of cash, cash equivalents and investments, of which approximately $76.7 million would be subject to foreign withholding tax if distributed outside the country in which the related earnings were generated.

Current wording

We recognized income tax expense of approximately $14.8 million for the twelve months ended December 31, 2025, and income tax expense of approximately $11.8 million for the twelve months ended December 31, 2024, resulting in effective income tax rates of 17.6% and 18.9%, respectively. The decrease in the effective tax rate for 2025 compared to 2024 is primarily attributable to an increase in overall pre-tax book income and the impact of the geographical mix of pre-tax income. Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of European and Asian subsidiaries. Any future distributions of foreign earnings will not be subject to additional U.S. income tax but may be subject to foreign withholding taxes. The Company has recorded outside basis differences in the limited instances where they do not assert permanent reinvestment. As of December 31, 2025, our foreign subsidiaries held approximately $221.2 million of cash, cash equivalents, and investments, of which approximately $80.1 million would be subject to foreign withholding tax if distributed outside the country in which the related earnings were generated.

Previous wording

Our primary liquidity requirements have been to meet our capital expenditure needs and to fund ongoing operations. For 2024 and 2023 our working capital was $848.6 million and $793.9 million, respectively. In 2024, our working capital increased primarily due to increases in accounts receivable and inventories, and a decrease in our short-term debt and accounts payable. We expect cash generated by our operations together with existing cash, cash equivalents, short-term investments and available credit facilities to be sufficient to satisfy our working capital needs, capital asset purchases, outstanding commitments, and other liquidity requirements associated with our existing operations for at least the next 12 months.

Current wording

Our primary liquidity requirements have been to meet our capital expenditure needs and to fund ongoing operations. For 2025 and 2024 our working capital was $878.6 million and $848.6 million, respectively. The Company’s working capital account balances reflect fluctuations from normal business activities. We expect cash generated by our operations together with existing cash, cash equivalents, short-term investments and available credit facilities to be sufficient to satisfy our working capital needs, capital asset purchases, outstanding commitments, and other liquidity requirements associated with our existing operations for at least the next 12 months.

Previous wording

The Company‘s restricted cash primarily consisted of the cash required to be on deposit under contractual agreements with banks to support outstanding loan and import/export guarantees. As of December 31, 2024, restricted cash of $6.1 million was pledged as collateral for issuance of bank loans, bank acceptance notes, letters of credit, and funds held in escrow related to the Fortemedia acquisition.

Current wording

The Company’s restricted cash primarily consisted of the cash required to be on deposit under contractual agreements with banks to support outstanding loan and import/export guarantees. As of December 31, 2025, restricted cash of $5.1 million was pledged as collateral for issuance of bank loans, bank acceptance notes, letters of credit, and funds held in escrow related to the Fortemedia acquisition.

Previous wording

As of December 31, 2024, we had short-term investments of approximately $7.5 million. These investments are highly liquid with maturity dates greater than three months at the date of purchase. We generally can access these investments in a relatively short amount of time but in doing so we generally forfeit a portion of interest income.

Current wording

As of December 31, 2025, we had short-term investments of approximately $9.8 million. These investments are highly liquid with maturity dates greater than three months at the date of purchase. We generally can access these investments in a relatively short amount of time but in doing so we generally forfeit a portion of interest income.

Previous wording

Our Asia subsidiaries maintain credit facilities with several financial institutions through our foreign entities worldwide totaling $146.0 million. Other than two Taiwanese credit facilities that are collateralized by assets, our foreign credit lines are unsecured, uncommitted and contain no restrictive covenants. These credit facilities bear interest at the Taipei Interbank Offered Rate (or similar indices) plus a specified margin. Interest payments are due monthly on outstanding amounts under the credit lines. The unused and available credit under the various facilities as of December 31, 2024, was approximately $114.0 million, net of $31.4 million advanced under our foreign credit lines and $0.6 million credit used for import and export guarantee.

Current wording

Our Asia subsidiaries maintain credit facilities with several financial institutions through our foreign entities worldwide totaling $150.3 million. Other than two Taiwanese credit facilities that are collateralized by assets, our foreign credit lines are unsecured, uncommitted and contain no restrictive covenants. These credit facilities bear interest at the Taipei Interbank Offered Rate (or similar indices) plus a specified margin. Interest payments are due monthly on outstanding amounts under the credit lines. The unused and available credit under the various facilities as of December 31, 2025, was approximately $119.6 million, net of $30.3 million advanced under our foreign credit lines and $0.4 million credit used for import and export guarantee.

Previous wording

In 2024 and 2023, our total cash capital expenditures were approximately $73.0 million and $150.8 million, respectively. Our capital expenditures for these periods were primarily related to manufacturing expansion in both our assembly/test and wafer fabrication facilities. Cash capital expenditures in 2024 were approximately 5.6% of our net sales, inline with the Company’s target model of 5% to 9% of net sales. Going forward, over the long term, the Company expects capital expenditures to continue to be within the 5% to 9% of net sales target model range.

Current wording

In 2025 and 2024, our total cash capital expenditures were approximately $78.4 million and $73.0 million, respectively. Our capital expenditures for these periods were primarily related to manufacturing expansion in both our assembly/test and wafer fabrication facilities. Cash capital expenditures in 2025 were approximately 5.3% of our net sales, inline with the Company’s target model of 5% to 9% of net sales. Going forward, over the long term, the Company expects capital expenditures to continue to be within the 5% to 9% of net sales target model range.

Previous wording

Cash and cash equivalents, including restricted cash, decreased approximately $3.8 million to $314.7 million in 2024 from $318.5 million in 2023. The table below sets forth summary information from our statements of cash flows:

Current wording

Cash and cash equivalents, including restricted cash, increased approximately $57.6 million to $372.3 million in 2025 from $314.7 million in 2024. The table below sets forth summary information from our statements of cash flows:

Previous wording

Net cash flows from operating activities for 2024 was approximately $119.4 million, due primarily to $50.8 million of net income, $137.1 million in depreciation expense and amortization of intangible assets expense and $22.8 million from non-cash share-based compensation expense. The increases were partially offset by a net decrease in operating assets and liabilities of $70.6 million, interest income from forward and collars of $10.4 million, gain on disposal of property, plant and equipment of $7.6 million, non-cash gains on investments of $0.3 million, and a decrease in deferred income taxes of $1.0 million.

Current wording

Net cash flows from operating activities for 2025 was approximately $215.5 million, due primarily to $69.2 million of net income, $143.7 million in depreciation expense and amortization of intangible assets expense and $25.7 million from non-cash share-based compensation expense, and a net increase in cash attributable to changes in operating assets and liabilities of $36.5 million. These increases were partially offset by interest income from derivative financial instruments of $20.0 million, gain on disposal of property, plant and equipment of $0.6 million, non-cash gains on investments of $25.9 million, and a decrease in deferred income taxes of $7.5 million.

Previous wording

Net cash flows from investing activities for 2024 was approximately ($118.0) million. The Company invested approximately $73.0 million in property, plant, and equipment, primarily at its production facilities in Asia. In its continued growth efforts, the

Current wording

Net cash flows from investing activities for 2025 was approximately $(116.2) million. The Company invested approximately $78.4 million in property, plant, and equipment, primarily at its production facilities in Asia. The Company made purchases of equity securities of $49.3 million, including making an investment in ATX of approximately $30.0 million, increasing its investment in Atlas by approximately $17.3 million, and the acquisition of the minority interest in a joint venture in Taiwan for approximately $4.1 million, bringing the Company’s ownership to 100%. The Company also paid approximately $4.0 million, net, due to the expiration of a hedge instrument. These uses of cash for investing were partially offset by the receipt of approximately $16.0 million related to the sale of TF Semiconductor Solutions, Inc.

Previous wording

Net cash flows from financing activities for 2024 was approximately ($19.3) million, due primarily to the net reduction in our outstanding indebtedness of $7.6 million, taxes on net share settlements of $9.6 million, and net changes in noncontrolling interests of $2.1 million.

Current wording

Net cash flows from financing activities for 2025 was approximately $(54.8) million, due primarily to repurchases of our common stock of $33.8 million, net changes in noncontrolling interests of $18.1 million, taxes on net share settlements of $4.3 million, and the net reduction in our outstanding indebtedness of $1.2 million.

Previous wording

Our reserve estimates are based upon historical data as well as projections of sales, distributor inventories, price adjustments, average selling prices, and market conditions. Actual returns and adjustments could be significantly different from our estimates and provisions, resulting in an adjustment to net sales. Based on the allowance/reserve balance as of December 31, 2024, a 1% change would increase or decrease the estimated allowance/reserve and net revenue by approximately $0.8 million.

Current wording

Our reserve estimates are based upon historical data as well as projections of sales, distributor inventories, price adjustments, average selling prices, and market conditions. Actual returns and adjustments could be significantly different from our estimates and provisions, resulting in an adjustment to net sales. Based on the allowance/reserve balance as of December 31, 2025, a 1% change would increase or decrease the estimated allowance/reserve and net revenue by approximately $1.0 million.