Diodes Sequential Sales Growth Accelerates to 19.5%

The Tip Desk · November 7, 2026 · 3 min read

Third-quarter revenue reached a record $532.6 million as non-GAAP earnings per share rose 219% from a year earlier.

Diodes Incorporated (DIOD) reported record third-quarter revenue of $532.6 million, up 35.8% from $392.2 million a year earlier and 19.5% from $445.5 million in the second quarter.

Sequential growth accelerated from 10% in the second quarter, when year-over-year sales had risen more than 20%. The analog and power semiconductor maker said the sequential increase was driven primarily by record automotive revenue from continued market-share gains, stronger demand across broad industrial applications, and sustained momentum in AI ecosystem applications that contributed to record revenue in the computing market.

President and CEO Gary Yu said global point of sale was also a record, increasing more than 30% year-over-year. He attributed the sequential sales increase to targeted capacity-expansion investments coming online over the past year, which raised loading at manufacturing facilities and, together with product mix and pricing, benefited gross margin.

GAAP gross profit was $192.5 million, or 36.1% of revenue, compared with $120.5 million, or 30.7%, a year earlier and $147.6 million, or 33.1%, in the prior quarter. Non-GAAP gross profit margin was 36.2%, excluding $0.4 million of inventory accounting associated with the ElevATE Semiconductor acquisition.

GAAP net income was $43.7 million, or $0.95 a share. Non-GAAP adjusted net income was $54.5 million, compared with $17.2 million a year earlier and $32.5 million in the prior quarter. Non-GAAP EPS was $1.18 a share, up 219% from $0.37 a year earlier and 68.6% from $0.70 in the prior quarter. The non-GAAP figure excluded, net of tax, a $7.9 million unrealized loss on investments, $4.2 million of acquisition-related intangible amortization, a $3.0 million gain on disposal of a subsidiary, $1.4 million of acquisition-related costs and $0.3 million of acquisition-related inventory amortization.

EBITDA was $89.7 million, or 16.8% of revenue, versus $46.6 million, or 11.9% of revenue, a year earlier. GAAP operating expenses were $129.1 million, or 24.2% of revenue, compared with $108.9 million, or 27.8% of revenue, a year earlier.

Cash flow from operations was $97.2 million. Free cash flow was $43.9 million, including $53.2 million of capital expenditures. Net cash flow was positive $134.1 million, including about $35 million for the stock buyback program.

The company completed the acquisition of ElevATE Semiconductor, a provider of high-performance integrated circuits for the automated test equipment market, and a private placement of 0.00% convertible senior notes due 2031 in an aggregate principal amount of $375 million. Total debt was about $405 million, including $364.9 million of the notes net of issuance costs. Cash, restricted cash and short-term investments were about $578 million.

For the fourth quarter of 2026, Diodes expects revenue of approximately $550 million, plus or minus 3%, a 40.4% year-over-year and 3.2% sequential increase at the mid-point. Non-GAAP gross margin is expected to expand to 37.0%, plus or minus 1%. Non-GAAP adjusted EPS is expected to be $1.35, plus or minus $0.10.

Yu said that, based on current projections for continued growth in the fourth quarter, the company expects full-year revenue to increase approximately 30% over 2025 at the mid-point, well above its historical 10% CAGR. He said the anticipated sequential growth is coupled with further non-GAAP gross margin expansion of 80 basis points sequentially to 37.0% at the mid-point, increasing earnings leverage and strong cash-flow generation.