Diodes (DIOD) Q2 2026 Earnings Report

The call presented strong top-line growth, margin expansion, improving profitability and cash generation, supported by record POS, design wins in automotive and AI/server markets, and an accretive acquisition that broadens the addressable market. Notable risks include reliance on an investment gain in GAAP results, pockets of supply constraints, YoY EBITDA margin percentage compression, elevated inventory to support lead times, and softness in communication/consumer end markets. On balance, the positive operational momentum and strong guidance materially outweigh the highlighted challenges.

Management guided third‑quarter revenue of approximately $510 million ±3% (midpoint implying ~30% year‑over‑year growth and ~14% sequential growth), GAAP gross margin of ~35% ±1% (calling for ~190 basis points of sequential gross‑margin improvement), and non‑GAAP adjusted EPS of $1.05 ±$0.10, while citing an expected ~2.8x year‑over‑year improvement in non‑GAAP earnings and reaffirming three‑year targets of $2.0 billion in annual revenue and >$4 of non‑GAAP EPS. They also said the proposed ElevATE acquisition would be immediately accretive, add about $50 million of revenue in the first 12 months and target >20% revenue CAGR over four years with gross margins well above the corporate average; for context they noted Q2 results of $445.5M revenue (up 22% YoY, 10% sequential), 33.1% gross margin (up 160 bps YoY), EBITDA of $83.5M (18.7% of revenue), free cash flow of $34.8M, cash and short‑term investments of ~$442M, total debt of ~$40M, capex of $33.6M (7.5% of revenue, within a 5–9% target), inventory ≈152 days, and an expected full‑year tax rate of ~18% ±3%.