Himax Technologies’ Earnings Call: Balanced Outlook with Strong Automotive Growth

Himax Technologies ((HIMX)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call of Himax Technologies presented a well-rounded view of the company’s performance, highlighting both achievements and challenges. The sentiment during the call was balanced, with notable strengths in the automotive and non-driver IC segments, despite facing difficulties in large display driver revenues and a decline in overall annual revenue. While the outlook for Q1 2025 points to a seasonal dip, the long-term perspective remains optimistic, particularly in the automotive and advanced technology sectors.

Surpassing Q4 Guidance

The company reported exceptional performance in Q4 2024, surpassing its own guidance. Revenues for the quarter reached $237.2 million, marking a 6.7% sequential increase and a 4.2% rise year-over-year. This success was complemented by a gross margin of 30.5% and a profit per diluted ADS of $0.14, both exceeding expectations.

Strong Automotive Segment Performance

Himax Technologies’ automotive segment demonstrated remarkable growth, with automotive driver sales, including both traditional DDIC and TDDI, experiencing mid-teens increases. For the first time, automotive TDDI sales outperformed DDIC sales, underscoring a growing global adoption of these technologies.

Non-driver Sales Growth

The non-driver segment also saw impressive growth, with Q4 sales reaching $45.4 million, a 24.9% increase from the previous quarter. This surge was primarily driven by a onetime Tcon product shipment, highlighting the segment’s potential for further expansion.

Revenue Growth in Automotive IC

In 2024, automotive IC sales rose nearly 20% year-over-year, outpacing the broader automotive market growth. This achievement underscores the company’s strength in the automotive sector and its ability to capture market share.

Strong Cash Flow and Inventory Management

Himax maintained robust financial health with a positive operating cash flow of $35.4 million in Q4. Additionally, the company successfully managed its inventory levels, bringing them down to a healthier state.

Decline in Large Display Drivers Revenue

However, the company faced challenges with its large display drivers, which saw an 18.6% sequential revenue decline to $25 million. This was attributed to customer destocking and heightened price competition, reflecting a shrinking percentage of total sales.

Overall Revenue Decline for 2024

The total revenues for 2024 stood at $906.8 million, marking a slight 4.1% decline compared to the previous year. This was largely due to global demand weakness, impacting overall performance.

Q1 2025 Revenue Guidance Decrease

Looking ahead, Himax expects a sequential revenue decrease of 8.5% to 12.5% in Q1 2025. This is due to the seasonal demand dip associated with the Lunar New Year holidays, although the company is optimistic about maintaining a gross margin around 30.5% and achieving a significant year-over-year profit increase.

Challenges in Large Panel Display Drivers

The large panel display drivers segment faced notable issues, with a 28.3% year-over-year revenue decline, highlighting its diminishing role in total sales.

Forward-Looking Guidance

During the earnings call, Himax Technologies provided an optimistic guidance despite the anticipated seasonal challenges in Q1 2025. The company expects revenues to decrease, but is confident in its ability to sustain a strong gross margin and achieve a substantial year-over-year profit increase. The automotive sector, along with innovative technologies like Co-Packaged Optics (CPO) and WiseEye AI, are expected to be key drivers of future growth.

In conclusion, the Himax Technologies earnings call offered a comprehensive overview of the company’s recent performance, revealing both strengths and areas for improvement. While certain segments faced challenges, the overall sentiment was positive, with strong growth in the automotive and non-driver sectors and promising future prospects.