Himax Technologies (NASDAQ:HIMX) reported fourth-quarter fiscal 2025 results that landed at the high end of its profit outlook, while management characterized market conditions as pressured by macro uncertainty and rising component costs. On the call, executives also outlined expectations for a first-quarter 2026 seasonal dip, followed by a rebound later in the year driven by automotive programs and growth in non-driver IC businesses such as timing controllers and the company’s WiseEye ultra-low-power AI sensing products.
Fourth-quarter results: revenue up slightly, profitability improves sequentially
For the fourth quarter, Himax posted revenue of $203.1 million, up 2.0% sequentially. Gross margin was 30.4%, in line with guidance and slightly above the prior quarter’s 30.2%. The company reported profit per diluted ADS of $0.036, at the high end of its guided range of $0.02 to $0.04.
After-tax profit for the quarter was $6.8 million, which the company cited as $0.086 per diluted ADS, compared to $1.1 million (or $0.006 per diluted ADS) in the prior quarter and $24.6 million (or $0.14 per diluted ADS) in the year-ago period.
Segment performance: large panels rebound; automotive and non-driver hold up
Large display driver revenue was $21.7 million, an increase over four quarters and above the company’s expectation for a single-digit sequential increase. Management said the outperformance was driven by rush orders for TV and notebook legacy products from panel makers, along with customer inventory stocking of TV and monitor ICs and a new notebook TDDI project entering mass production. Large panel drivers made up 10.7% of quarterly revenue.
Small- and medium-sized display driver revenue totaled $139.1 million, down 1.3% sequentially. Automotive driver sales (traditional DDIC and TDDI) rose about 10% quarter-over-quarter, which management tied to broader adoption of its TDDI technology among major customers globally. The company said its automotive revenue for full-year 2025 grew at a single-digit rate year-over-year despite softness in global auto markets. In contrast, smartphone and tablet IC revenue declined sequentially as customers pulled purchases forward into prior quarters.
Non-driver revenue was $42.3 million, up 7.9% sequentially, which management attributed to increased ASP consumption to a leading projector customer and strong timing controller (T-CON) consumption for automotive applications. Himax said T-CON represented over 10% of total sales, with notable contribution from automotive, and highlighted that its automotive OLED on-cell touch IC entered mass production with a leading brand during the quarter.
Full-year 2025: revenue declines, non-driver grows
Management described 2025 as challenging amid tariff and geopolitical uncertainty, with panel customers maintaining lean inventories and a make-to-order approach. Full-year revenue was $832.2 million, down 8.2% from 2024.
- Large panel display driver IC: $90.7 million, down 28.0% year-over-year (10.9% of sales vs. 13.9% in 2024)
- Small- and medium-sized drivers: $575.1 million, down 8.0% (69.1% of sales)
- Non-driver products: $166.4 million, up 7.0% (20.0% of sales vs. 17.1% a year ago)
The company reported full-year gross margin of 13.6% and compared it to 30.5% in 2024. Operating expenses were $210.2 million, up 1.1% year-over-year, driven by higher payroll and payout expenses and New Taiwan dollar appreciation, partially offset by lower employee bonus compensation. Operating income was $44.1 million (5.3% of sales), down from $68.2 million (7.5% of sales) in 2024. Net profit was $43.9 million, or $0.25 per diluted ADS, compared with $79.8 million, or $0.46 per diluted ADS, in 2024.
Balance sheet and cash flow
Himax ended 2025 with $286.2 million in cash, cash equivalents, and other financial assets, up from $224.6 million a year earlier and slightly above $278.2 million in the prior quarter. Fourth-quarter operating cash inflow was $16.8 million, up from $6.7 million in the previous quarter.
The company had $28.5 million in long-term unsecured loans, including $6.0 million classified as current portion at year-end. Inventories rose to $152.7 million from $107.4 million in the prior quarter, while accounts receivable were $200.9 million (DSO 88 days).
Capital expenditures were $4.0 million in the fourth quarter and $20.1 million for the full year, with management noting that the annual increase versus 2024 was primarily tied to construction in progress for a new pre-school near the company’s China campus, expected to be completed by the end of Q2 2026.
Q1 2026 outlook: seasonal weakness, mix-driven margin change; cost talks underway
For the first quarter of 2026, Himax guided for revenue to decline 2% to 6% sequentially, with gross margin expected to be flat to slightly down depending on product mix. Profit attributable to shareholders was guided to $0.02 to $0.04 per fully diluted ADS.
In Q&A, management said the expected margin change is primarily due to product mix, including proportionally lower automotive shipments. Executives also discussed rising input costs such as gold and signs of foundry capacity tightening, saying the company is in discussions with foundry vendors on delivery support and “manageable” price increases, while also discussing potential price increases with customers. Management indicated these cost dynamics were “pretty recent” and were not a major factor in Q1 guidance, but could become more relevant starting in Q2.
Operationally, management said it expects Q1 to be the trough of the year, with a rebound in Q2 and improving momentum into the second half, supported by inventory levels and new automotive projects entering mass production later in the year. It also expects continued growth in non-driver IC businesses, especially T-CON and WiseEye, to provide incremental support.
On segment expectations for Q1, the company said:
- Large display driver IC sales are expected to increase by single digits sequentially on continued replenishment of TV IC products by Chinese panel customers.
- Small- and medium-sized drivers are expected to decline by single digits, with automotive driver IC sales set to decrease by double digits due to seasonal softness around Lunar New Year, the pullback after two quarters of replenishment, and tapering subsidies in major markets.
- Smartphone TDDI and OLED product sales are expected to increase sequentially as new OLED solutions begin mass production with a panel maker serving leading smartphone brands.
- Tablet IC sales are expected to grow sequentially due to shipments tied to a customer’s new premium OLED tablet.
- Non-driver revenue is expected to decrease by a single digit, including a single-digit decline in T-CON due in part to the absence of prior-quarter projector ASIC T-CON shipments and a moderation in automotive T-CON shipments after several quarters of growth.
Management also addressed development timelines for co-packaged optics (CPO), reiterating that 2026 is focused on customer validation of Gen 1 and Gen 2 products with sample shipments, limiting revenue contribution in 2026. For 2027, the company said it could potentially see meaningful contribution tied to a Gen 2 product targeting bandwidth greater than 6.4T, though the timing of mass production ramp depends on customer decisions and broader ecosystem readiness.
On OLED, management said total OLED contribution in 2026 (smartphone, IT, and automotive combined) is expected to be less than 10% of total sales, with a “real ramp” anticipated in 2027. It also said smartphone OLED gross margin is lower than the corporate average, while automotive and IT OLED are focus areas with better margins and higher IC content per panel.
About Himax Technologies (NASDAQ:HIMX)
Himax Technologies, Inc (NASDAQ: HIMX) is a fabless semiconductor company specializing in display imaging technologies. The company designs and develops a comprehensive portfolio of display driver integrated circuits (DDICs), timing controllers, and other high-speed interface chips that enable high-resolution panels for a wide array of electronic devices. Himax’s solutions are tailored to support both LCD and OLED displays, ensuring compatibility with television sets, desktop monitors, laptops, tablets, smartphones and wearable devices.
In addition to core display driver products, Himax offers wafer-level optics and liquid crystal on silicon (LCOS) microdisplay solutions for applications in augmented reality (AR) and virtual reality (VR) headsets.
