Achieves Record Full Year GAAP EPS Increasing 44% to $7.20 and Non-GAAP EPS Increasing 42% to $7.36 over 2021

PLANO, Texas — (BUSINESS WIRE) — February 6, 2023 — Diodes Incorporated (Diodes) (Nasdaq: DIOD) today reported its financial results for the fourth quarter ended December 31, 2022.

Year 2022 Highlights

• Revenue grew to a record $2.0 billion, an increase of 10.8 percent over the $1.8 billion in 2021;
• GAAP gross profit was a record $827.2 million, a 23.4 percent increase from $670.4 million in the prior year;
• GAAP gross profit margin improved 420 basis points to a record 41.3 percent from 37.1 percent in 2021;
• GAAP operating income increased 47.9 percent to a record $408.2 million, or 20.4 percent of revenue, compared to $276.0 million, or 15.3 percent of revenue, in 2021;
• GAAP net income was a record $331.3 million, an increase of 44.8 percent from the $228.8 million last year;
• Non-GAAP adjusted net income was a record $339.0 million, an increase of 42.9 percent from the $237.2 million in 2021;
• GAAP EPS was a record $7.20 per diluted share, a 44.0 percent improvement from the $5.00 per diluted share in 2021;
• Non-GAAP EPS was a record $7.36 per diluted share, a 42.1 percent improvement from the $5.18 per diluted share in 2021;
• Excluding $28.7 million, net of tax, non-cash share-based compensation expense, both GAAP net income and non-GAAP adjusted net income would have increased by $0.62 per diluted share;
• EBITDA improved 19.7 percent to a record $520.4 million, or 26.0 percent of revenue, compared to $434.6 million, or 24.1 percent of revenue in 2021; and
• Achieved a record $392.5 million cash flow from operations and $180.8 million of free cash flow, including $211.7 million of capital expenditures, or 10.6 percent of revenue. Net cash flow was a negative $25.7 million, which includes the net pay-down of $112.3 million of total debt.

Commenting on the results, Dr. Keh-Shew Lu, Chairman, President and Chief Executive Officer, stated, “In spite of the COVID-related lockdowns and power outages throughout the year in China as well as the global economic slowdown, we delivered 10.8% annual growth over 2021 and achieved record financial performance across all metrics. In fact, the fourth quarter represented our ninth consecutive quarter of year-over-year growth. Additionally, our earnings power and cash generation in 2022 were also significant highlights with gross margin expanding 420 basis points to 41.3%, operating margin expanding 510 basis points to 20.4%, and GAAP EPS increasing 44% to $7.20 and non-GAAP EPS growing 42% to $7.36. We also achieved record cash flow from operations of $393 million.

“Underpinning the Company’s noteworthy performance was continued strong growth in our automotive end market, which increased 40% over 2021 and reached 15% of product revenue for the year. We also continued to drive growth in our industrial end market through our ongoing content expansion efforts, which contributed to our industrial and automotive end markets representing 42% of 2022 product revenue and exceeding our target model of 40%. The growth in these end markets combined with the ongoing increase of our Pericom products also contributed to our strong gross margin expansion throughout the year as part of our product mix improvement efforts.”

Dr. Lu concluded by stating, “Reaching the $2 billion revenue level in 2022 was a significant and meaningful achievement for the entire Diodes team. With gross profit growing 23% to $827 million for the year, we have taken another giant step towards the next goal in our 2025 financial targets to achieve $1 billion in annual gross profit. I am very proud of our accomplishments and our ability to consistently deliver both top line growth and significantly expanded earnings for our shareholders.”

Fourth Quarter 2022

Revenue for fourth quarter 2022 was $496.2 million, increasing 3.3 percent from $480.2 million in the fourth quarter 2021 and down 4.8 percent from $521.3 million in the third quarter 2022, which is slightly better than typical seasonality.

GAAP gross profit for the fourth quarter 2022 was $206.2 million, or 41.6 percent of revenue, increasing from $190.7 million, or 39.7 percent of revenue, in the fourth quarter of 2021 and down from $217.8 million, or 41.8 percent of revenue, in the third quarter 2022.

GAAP operating expenses for fourth quarter 2022 were $109.7 million, or 22.1 percent of revenue, and on a non-GAAP basis were $105.9 million, or 21.3 percent of revenue, which excludes $3.8 million of amortization of acquisition-related intangible asset expenses. GAAP operating expenses in the fourth quarter 2021 were $104.7 million, or 21.8 percent of revenue, and in the third quarter 2022 were $105.4 million, or 20.2 percent of revenue.

Fourth quarter 2022 GAAP net income was $92.1 million, or $2.00 per diluted share, compared to GAAP net income in the fourth quarter 2021 of $65.5 million, or $1.43 per diluted share, and GAAP net income of $86.4 million, or $1.88 per diluted share, in the third quarter 2022.

Fourth quarter 2022 non-GAAP adjusted net income was $79.6 million, or $1.73 per diluted share, which excluded, net of tax, $3.1 million of acquisition-related intangible asset costs. This compares to non-GAAP adjusted net income of $73.3 million, or $1.60 per diluted share, in the fourth quarter 2021 and $92.2 million, or $2.00 per diluted share, in the third quarter 2022.

The following is an unaudited summary reconciliation of GAAP net income to non-GAAP adjusted net income and per share data, net of tax (in thousands, except per share data):