Silicon Motion Technology Corporation (NASDAQ:SIMO) released its Q1 2025 earnings call transcript on April 30, 2025. The company’s revenue came in at the high end of their guided range at $166.5 million, despite weak end-user demand for PCs and smartphones at the start of the quarter. Gross margins expanded to 47.1% due to an improved product mix, shifting customers to newer products.
Key Business Developments
- Delivered revenue at the high end of guidance despite weak end-user demand
- Gross margin expansion to 47.1% through successful introduction of new products
- Continued investment in next-generation technologies for long-term growth
- Benefiting from increased controller outsourcing by NAND flash makers
- Strong design win momentum across all end markets
Financial Highlights
- Revenue decreased 12.9% sequentially to $166.5 million
- Gross margin increased to 47.1%
- Operating margin decreased to 8.9%
- Earnings per ADS was $0.60
Business Segment Updates
Client SSD Controllers
- Seeing stronger than expected demand for new PCIe 5 8-channel controller
- First 6 nanometer PCIe 5 chip in the world with design wins at four of six NAND flash makers
- Upcoming PCIe 5 4-channel DRAM-less controller expected to begin shipments later this year
eMMC and UFS Business
- Smartphone market showed signs of bottoming and recovery in Q1
- Experienced strong booking momentum for UFS 3.1 and 2.2 controllers as well as eMMC controllers
- Well-positioned with both flash makers and module makers to serve various markets
MonTitan Business
- One of the most exciting opportunities for Silicon Motion with a large addressable market
- Working with NVIDIA on BlueField-3 DPU platform for enterprise class controllers
- Expect to deliver multiple new products in coming months capitalizing on interest in QLC NAND
Outlook
- Revenue expected to increase 5% to 10% to $175 million to $183 million in Q2
- Gross margin expected to expand to 47% to 48%
- Operating margin expected to be in range of 8.9% to 10.9%
- Targeting revenue growth in line with achieving $1 billion run rate by end of year
