Welcome to Ennostar's 2025 fourth quarter financial results conference. At this time, all lines are being placed on mute. After the presentations by the management team, there will be a questions and answer session. Now, I would like to turn over to Mr. Damon Tzeng, Ennostar's IR Officer.
Ladies and gentlemen, good afternoon. I'm Damon Tzeng, Ennostar's IR Officer. On behalf of the company, I would like to welcome you to participate in our 2025 fourth quarter financial results conference. I'm joined by four executives, Paul Peng, Chairman of Ennostar Inc., Patrick Fan, Chairman of Ennostar Corporation and Lextar Electronics Corporation, Terry Tang, President of Ennostar Corporation, and Alan Wang, Chief Financial Officer of Ennostar Inc.. The agenda is as follows. First, our CFO will go over 2025 fourth quarter results, and our Chairman, Paul, will have an opening remark.
Patrick and Terry will speak on the company's Q4 outlook. After that, we will take questions online. That was the format for today's meeting. I would like to remind you that all forward-looking statements contain risks and uncertainties. Please spend some time to read the safe harbor notice in the slide. Alan, please.
Good afternoon, investors and members of the media. I'm Alan, CFO of Ennostar. Let me start by walking you through our operating highlights of for Q4 of 2025. In Q4, due to seasonality, a less favorable product mix, year-end customer inventory adjustments, softer demand for consumer products, our consolidated revenue declined by 7.1% QOQ to NTD 5.208 billion. On a year-over-year basis, revenue was down by 5.4%. For Q4, our operating margin was negative 25.2%.
Net profit margin was -15%. Loss per share was TWD 1.07. Next slide. For the full year of 2025, consolidated revenue was TWD 22.18 billion, down by 9.0% versus 2024. Gross margin was 5.7%. Net loss attributable to the parent company was TWD 2.715 billion, with a loss per share of TWD 3.69. Next slide, please. Let's look at our Q4 revenue by application. Starting with the bar chart for Q4 2025, as mentioned earlier, the quarter is typically seasonally slower. Softer demand in TV backlighting and horticultural lighting also weighed on our results, leading to a decline in the overall revenue. Next slide. Moving on to the balance sheet.
We ended the quarter with TWD 30.4 billion in cash. Net cash was about TWD 12.8 billion after bank borrowings. Inventory decreased by TWD 150 million versus last quarter. Inventory turnover shortened to 75 days. Next slide. The cash flow statement. Although we recorded an operating loss in Q4, cash flow from operations remained positive. Cash flow from investing and financing activities mainly reflected CapEx and changes in borrowings. Next slide, please. For the full year of 2025, cash flow from operations was an inflow of about TWD 2.1 billion. CapEx was TWD 1.27 billion. With a solid cash position, we continued to proactively repay bank borrowings to reduce interest expenses. This concludes my review of our Q4 results.
I would like to hand over to Paul to recap the quarter and share our outlook for the first quarter.
Good afternoon, investors and members of the media. This is Paul speaking. The fourth quarter typically experiences lower demand for the electronics industry, our revenue was down by 7% QoQ. Weaker seasonality, a less favorable product mix, and forex headwinds led to a loss of TWD 780 million. That said, we still generated TWD 785 million of cash from operations, our inventory control remained quite robust. Both our inventory balance and inventory turnover lowered. For 2025, we reported a net loss of TWD 2.7 billion, or TWD 3.69 per share. This reflects intense competition in the LED industry and relatively steeper forex losses for the year.
While we have been stepping up our value-added transformation, the share of value-added products didn't increase as quickly as respected, putting our overall profitability under pressure. Meanwhile, we've started a structural transformation, including streamlining our organization around strategic priorities. We've also reviewed our equity investments, they have transitioned from a negative impact on the bottom line to a positive contribution. In addition, with disciplined cost control, we have been able to bring the OpEx down meaningfully. In 2026, our top priority is improving profitability. We will actively optimize our product mix and keep lowering our cost. We will also continue to revitalize assets and fine-tune our investments when appropriate. Earlier today, our board of directors approved the disposal of the Zhunan factory. Over the past two years, we have been consolidating our manufacturing footprint to improve operating efficiency.
The proceeds of the facility disposal will go into future-oriented technologies and businesses, so we can scale up and accelerate our strategic transformation. With these structural changes, our goal is to get Ennostar back to steady profitability. Looking ahead to 2026, we see a generally healthy macro environment and consumer demand should improve quarter by quarter. However, memory supply tightness could affect ICT product availability and U.S. tariff policy is still uncertain. We are also watching geopolitics closely, especially given the rising tensions in the Middle East, which could disrupt the global energy supply and put longer pressure on Asia, Europe shipping routes. Moreover, inflation could also pick up once again. All of these factors could weigh on consumer demand and global growth. We will continue to monitor them closely. That's all from me today. Thank you.
Thank you, Paul. Next, we will share Ennostar Group's outlook for 2026. Terry will first focus on advanced display, sensing, specialty lighting, and display applications. Patrick will focus on automotive and backlighting. With that, let's invite Terry to walk us through the next section.
Ladies and gentlemen, good afternoon. I'm Terry from Ennostar. I'll share our Q1 2026 outlook for the sensing, specialty lighting, and display businesses. Let me start with sensing. In Q1, notebook facial recognition demand is still very strong. However, wearables are in the usual slow season, so we expect sensing revenue to be down a low single digit QOQ and roughly flat YOY. For the entire year of 2026, with new smart wearable launches and robust demand for laptop facial recognition industrial sensing, we feel optimistic about the outlook and anticipate strong double-digit growth versus last year. Next, specialty lighting.
In Q1, as customers wrap up their year-end inventory control and are starting to restock, we are also seeing some pulling for horticultural lighting. We expect double-digit growth QOQ and a single digit increase YOY. For the full year, with higher demand in high power lighting and UV products starting to contribute more, we anticipate special lighting to grow at a single digit pace. On displays, we expect Q1 revenue to be down slightly QOQ and basically flat YOY. Looking at the full year, demand looks pretty steady, so we are anticipating full year revenue to be about flat versus last year. Finally, on micro-LED, we have several products moving through customer qualification at the moment, and everything is going as expected. Starting in Q1, we will begin ramping into mass production, and we will add capacity step by step as planned.
For this year, we expect micro-LED related revenue to grow at a higher rate versus 2025. It should be a key growth driver for Ennostar this year and the next. That's our Q1 2026 outlook for sensing, specialty lighting, and display.
Thank you for your attention. Thank you, Terry. I'll hand over to Patrick to walk us through automotive and backlighting businesses.
Ladies and gentlemen, good afternoon. I'm Patrick from Ennostar. I would like to start with a quick update on our automotive business. On Q4 2025, the overall auto market was a bit soft. Our revenue in the higher share automotive chip business came down a little. Since our share is rather high, when the market slows, we do feel the impact.
On the packaging and module side, however, both backlight and exterior display modules, and especially ISD tail lamp displays, we actually grew because some new projects started shipping more samples at initial volume. When adding chips and packaging and modules together, overall automotive revenue in Q4 was basically flat. As you can see, packaging and modules are making up a bigger share of the revenue mix. Looking at the first quarter, the overall auto market has not improved meaningfully, so we expect our higher share chip revenue to slide. For automotive backlight modules, we shipped a lot of samples in Q4, and now we are waiting for end customer validation. After customer validation, shipments should ramp with customers' mass production plans. In Q1, we are waiting for customer validation to go through. As for ISD, new progress revenue contribution is coming through progressively.
Therefore, we expect ISD to keep growing. Overall, adding packaging, chips, and modules, we expect Q1 to be slightly down by a single digit, a low single digit. For the chip segment, despite the softer automotive market, we are actively building up new programs like ambient lighting with end customers, in addition to new ISD and DRL projects. These take time to ramp, so we should start seeing the contribution coming through from Q2, and that's when we expect the chip business to get back to growth. Now, on backlighting, I'll cover TV first, then IT. On TV backlight, chips did well thanks to share gains in the international market, especially in flip chip, and we saw double-digit growth in Q4 versus Q3. In terms of packaging and modules, some Chinese brands cut forecasts and focused on inventory controls. Packaging and modules were down double digits.
Since chips represented a smaller base, the combined TV backlight business still ended up down double digits QOQ in Q4. Looking to Q1, we expect chips to keep growing in the double digits on further share gains. Packaging and modules should also rebound as shipment picks up in Q1 in the lead up to major international sports events in 2026. We see a good chance TV backlight grows double digits in Q1 versus Q4 last year. For IT backlight, including monitors and notebooks, chips grew double digits QOQ in Q4, driven by share gains with international brands. The packaging and module segment was softer because the market was more sensitive to memory supply tightness, and we saw weakness in entry-level products and overall volume. Packaging and modules, especially backlight, lowered by high single digits.
Overall, IT backlight was basically flat in Q4, with chip growth offsetting softer packaging and modules growth. In Q1, we expect chips to keep growing double digits, and the packaging and modules decline should ease and improve. Overall, we are looking for low single-digit growth in Q1. On packaging and modules, overall, it's only slightly down. We are seeing more softness in notebook, while monitors are showing stronger growth. We will keep a close eye on how the international market evolves, and we will continue working to increase the monitor share in our revenue mix. This is my Q1 outlook for automotive and backlighting.
All right. Thanks, Patrick. Before we jumped into Q&As, I'll have a quick add-on. For 2026, we are planning CapEx of about TWD 2 billion, mainly for automotive, advanced display, and other performance improvement projects. As for depreciation, as some tools become fully depreciated, we expect 2026 depreciation expense to be about TWD 30 billion. We will open it up for Q&As. Please go ahead with your questions.
Thank you. We will now start Q&A. If you would like to ask question, please press star and one on your telephone keypad. Thank you. Thank you. We do not have any other questions. I would like to hand over to Damon Tzeng. Please go ahead.
Ladies and gentlemen, this concludes our investor conference call. If you have any follow-up questions, please reach out to our IR team. Thanks again. We will talk to you next time. Thank you. Thank you all very much for your participation in the 2025 fourth quarter financial results conference of Ennostar. This concludes today's investor conference. You may all disconnect now. Thank you.