Welcome to Ennostar's 2025 third quarter earnings call. Before the meeting starts, all lines are being placed on mute. After the presentations and remarks by the management team, there will be a questions and answers session. Now I would like to hand over to Mr. Damon Tzeng from Ennostar's IR department.
Ladies and gentlemen, good afternoon. I'm Damon Tzeng from Ennostar's IR department. On behalf of the company, I would like to welcome you to participate in our 2025 third quarter financial results conference. I'm joined by four executives: Paul Peng, Chairman of Ennostar Incorporated; Patrick Fan, Chairman of Ennostar Corporation and Lextar Electronics Corporation; Terry Tang, President of Ennostar Corporation; and Alan Wang, Chief Financial Officer of Ennostar Incorporated. The agenda is as follows. First of all, our CFO will go over 2025 third quarter results, and Chairman Paul Peng will have an opening remark.
Patrick and Terry will each speak on the respective company's Q4 outlook. After that, we will take questions online. Before we move forward, I would like to remind you that all forward-looking statements contain risks and uncertainties. Please also spend some time to read the safe operating notice. Alan, please.
Ladies and gentlemen, good afternoon. I'm Alan. I would like to firstly go over Ennostar's Q3 results. Due to macroeconomic and tariff-induced uncertainties, customers became more conservative, resulting in a less pronounced peak season demand. As a result, Ennostar's net revenue for the third quarter decreased by 2.4% quarter- on- quarter, reaching $5.6 billion. Year-on-year wise, it was down by 16.3%. Because the peak season's effect was not as strong in Q3, our OP margin was negative 15.3%, with losses increasing by 0.8% QoQ.
Net non-op income was $250 million, up by $300 million from the previous quarter, mainly due to a $100 million reduction in forest losses and nearly $70 million in gains from the liquidation of subsidiaries following organizational restructuring. Net profit margin was negative 10.9%. Loss per share was $0.83. Revenue by application, the quarter's product mix was similar to the previous quarter. The company continues to focus on high value-added areas, but the demand in high-end markets remained conservative, resulting in a less favorable product mix and a gross margin decline of 1.2% compared with Q2. As of the end of Q3, Ennostar had TWD 14.3 billion in cash. After deducting bank loans, net cash was about TWD 13.8 billion. Inventory's value decreased by TWD 100 million QoQ , and inventory turnover dropped to 78 days. Moving on to cash flow. Despite an operating loss in Q3, we generated cash inflow from operations.
CapEx for the third quarter was about TWD 243 million, and net change in loans was TWD 488 million. We ended the quarter with a balance of TWD 14.33 billion. This concludes my explanation for our Q3 results. Now I would like to hand over to Paul. Paul will share his perspective on our Q3 performance and provide an outlook for Q4.
Ladies and gentlemen, good afternoon. Thank you for participating in our third quarter financial results conference. Given the macroeconomic uncertainty caused by tariffs in the first half of the year, our customers were more conservative with restocking during Q3, resulting in a less robust peak season. Meanwhile, NTDs appreciation also created unfavorable factors. Additionally, industry competition intensified during the quarter, causing our revenue in Q3 to fall by 2.4% QoQ, reaching TWD 5.6 billion. While wise due to the higher base period, the decline was deeper, about 16%.
Although the operating team worked very diligently to reduce our operating costs and OpEx, it was not enough to counteract the economic downturn and price competition pressure. The OP margin for Q3 was - 15.3%, with loss attributable to the parent company of TWD 611 million, which translates to a per share loss of TWD 0.83. Despite the slower seasonality in Q3, we are working very hard to improve our product mix, hoping to increase the proportion of high value-added products. We will also take advantage of the slower season to accelerate the validation and adoption of new products by our customers for next year, while strictly controlling our OpEx. Moreover, we continue to reorganize our non-core and financially inefficient investments, aiming to allocate resources to strategic and future-oriented technologies and products so as to continuously enhance our long-term competitiveness. Furthermore, the company's accelerating integration, Ennostar Corporation has been officially established.
Starting January 1st next year, Lextar will also be integrated into Ennostar Corporation, aiming for better synergy through the integration. This concludes my sharing on Q3 and outlook for Q4. Thank you for listening.
Thank you, Paul. Next, we'll go over Ennostar's business outlook for 2025 fourth quarter. Terry will focus on advanced displays, tensing, special lighting, and displays. Patrick will focus on automotive and backlight. Terry, would you please?
Ladies and gentlemen, good afternoon. I'm Terry from Ennostar. I would like to talk about our prospects in advanced displays, tensing, special lighting, and displays, and also share with you our outlook for Q4. Let's first look at the tensing business segment. Due to the slower seasonality in Q4, the revenue from tensing is expected to decline by double-digit percentage points QoQ, but we'll likely see double-digit percentage growth YoY. For the full-year performance, driven by the trend of increasing chip usage in smart wearable products and new applications, we anticipate the revenue this year to grow by single-digit percentage points compared to last year. We are actively developing high-end applications, including VCSEL and SWIR products for new applications such as industrial automation and smart wearables.
As our products are gradually being introduced into end markets, we anticipate revenue contribution from the new products to be sent to the tensing business for next year. For special lighting, as horticulture lighting enters the off-season and market competition heats up, we anticipate double-digit percentage points slide in the revenue both QoQ and YoY. We also take a more conservative view of full-year revenue for special lighting. Looking ahead in special lighting, we continue to expand our high-power lighting applications. Meanwhile, our UVC and UVA products have been adopted by multiple customers, and we expect revenue from these products to grow significantly next year. For the display business, Q4 revenue is expected to be flat or slightly down QoQ and to decline by single-digit percentage points YoY.
For the full-year performance, although demand for small pixel pitch displays remains steady due to unfavorable forest conditions, we expect full-year revenue to decline slightly YoY . As for the micro-LED advanced display business, several of our products have gradually started pilot production in the current quarter, and we are actively preparing for mass production next year. Overall, we expect micro-LED to make a more substantial contribution to our revenue starting next year. This was our business outlook for the tensing, special lighting, and display segments in Q4. Thank you.
Thank you, Terry. Next, Patrick will go over the business outlook for automotive and backlight businesses. Hello, I'm Patrick. First, I'd like to provide an overview of the backlight business, which is divided into two main areas: TV and IT. In Q4, we are entering the traditional off-season.
We have observed that demand during China's October 1st Golden Week was below expectations, and restocking activities for the Double 11 Festival were weaker, representing weaker market demand for TV. However, many LED TVs are experiencing significant growth, and we hope to increase our market share in new design wing projects next year. Given the market conditions, we hope to further increase the usage of LEDs in applications. Our outlook for TV backlight in Q4 is a double-digit decline. The IT segment is also entering the off-season. Although demand for high-end models is weak due to market conditions, we are actively pursuing opportunities in the mid and low-end segments, so there is a chance for nearly double-digit growth in our IT revenue in the fourth quarter. This is thanks to the team's continuous efforts despite the headwinds. We are hoping to achieve sustainable growth in IT.
In the automotive segment, the uncertainties in China and the global markets have depressed demand. However, our previous design win projects are gradually bearing fruit. In the upstream die segment, we are benefiting from stronger demand for interior ambient lighting and exterior signal lights from Korean customers. Moreover, in the downstream segment, we have been actively developing backlight modules and exterior automotive displays. The exterior modules are about to enter mass production and start shipping in meaningful volumes in Q4, and there is an opportunity for nearly double-digit percentage point growth in Q4. To meet customer demand, we are also ramping our production capacity for the next year, with the second phase of expansion expected to be completed in Q1 next year. In Taiwan, the production line built for exterior automotive displays passed a tier- one customer audit last month, and we successfully delivered the C0 sample.
By the end of Q1 next year, we hope to deliver the C1 sample and achieve qualification with automotive OEMs, aiming to achieve revenue contribution in 2027. The automotive market, especially the international automotive market, calls for long-term investment in engagement, and we are steadily moving forward as planned. In addition to backlight and automotive displays, I would also like to take this opportunity to share recent progress in the much talked-about silicon photonics technology. With major international players driving innovation, silicon photonics is gaining significant traction, especially in the micro-LED-based communication field, which Ennostar excels at. We have some ongoing collaboration projects, and more solution providers for different platforms are seeking to engage us. At the same time, we are careful in selecting partners for different platforms, hoping to create more opportunities to ensure success rather than focusing on just one platform.
If everything goes well, one of the fastest projects may be ready for mass production as early as in 2027. Although silicon photonics is a new field for Ennostar, we are following this trend and gaining more opportunities. In addition to short-term revenue growth, we are also striving to achieve medium and long-term revenue growth. Thank you.
Thank you, Patrick. Next, we will proceed with questions and answers. You may post your questions now. Thank you.
We now start our questions and answer session. If you wish to ask a question, please press the star sign and the number one on your telephone keypad. When you hear your name announced, you may start to speak. If you wish to cancel a question, you may press star sign and the number two on your keypad.
If you wish to ask a question, please press star sign and the number one on your telephone keypad, please. Thank you. There are no questions online. We are now turning back the mic to Mr. Damon Tzeng.
Ladies and gentlemen, this concludes our investor conference for this quarter. If you have any other questions, please feel free to contact us at the IR department at Ennostar. Thank you. We'll see you next time.
Thank you. Thank you very much for your participation in Ennostar's 2025 third quarter financial results conference. This concludes our meeting today. You may disconnect now. Thank you.