Welcome, everyone, to Parade Technologies Limited's 2025 third-quarter webcast investor conference. Investor Relations of Parade Technologies, Mr. Yo-Ming Chang, will present 2025 third-quarter financial results first. During the presentation, all lines will be placed on mute to prevent background noise. After the presentation, there will be a question and answer session in English by CEO Dr. Jack Zhao and Vice President of Finance, Mr. Kuowei Wu. We also will remain last 15 minutes for the attendees who would like to ask questions in Chinese. Please follow the instructions given at the time if you would like to ask a question. [Foreign language] Now, I would like to introduce Mr. Yo-Ming Chang, Investor Relations of Parade Technologies. Mr. Chang, please begin. [Foreign language]
Thanks, Stephanie. Welcome, everyone, to Parade Technologies 2025 Q3 webcast investor conference. Parade Technologies third quarter 2025 consolidated revenue was $146.14 million, and the net income was $27.24 million. Its both basic and fully diluted after-tax earnings per share were $0.35 and $0.35, respectively. This result, compared to consolidated revenue of $136.25 million and the net income of $23.58 million, over $0.30 and $0.30 per basic and fully diluted share in the year-ago quarter. In U.S. dollars, the third quarter revenue increased 9.47% sequentially, and it was up 7.26% year-over-year. The gross profit in the third quarter of 2025 was $62.11 million, an increase of 7.93% from the previous quarter and an increase of 7.91% compared to the same quarter of last year.
On September 3, 2025, Parade introduced the availability of four new PCIe Gen 6 linear redrivers for server, storage, and the high-performance AI scaled-up data center capturing solutions. With industry-leading linearity, the PCIe Gen 6 revenue of redrivers provides profound EQ boosts up to 18 DP while operating from a single supply. The PS8594, PS8598, and the PS8596 devices utilize Parade's speed migration path methodology, matching the Intel PCIe 6 standard format for easier high-speed routing and evaluation between PCIe retimers and the Parade linear redrivers. Fully compatible with all previous PCIe specifications, the PS859X series is an excellent choice for motherboard, backplane, AIC, and cable applications. On September 17, 2025, Parade announced the availability of the PS8780, USB4 Gen 4, Thunderbolt 5, DP 2.1 linear redriver for active cable and the notebook PC workstation system applications.
It is pin compatible with the PS8778, USB4 Gen 3, Thunderbolt 4, DP 2.1 linear redriver. The PS8780, the post-USB4 Gen 4x2 of 2x 40 Gb per second asymmetric and 120 Gb per second asymmetric modes, Thunderbolt 5, 2x 41.25 gigabits per second, and the DP 2.1 Auto-Mode USB R20 link rates. It implements USB4, USB 3.2, and the DP 2.1a power management, including DP 2.1a advanced link power management. Its low-power design and the modern standby support greatly extend battery life for mobile devices and minimize power consumption for active cables. PS8780, it comes in a very small package, ideal for cables or space-constrained designs. Based on the current business outlook, Parade is providing the following guidance for the fourth quarter of 2025. Revenue is between $123.5 million- $136.5 million . Gross margin is between 42%- 46%.
Operating expense is between $33 million- $36 million .[Foreign language]. It is my presentation for the 2025 Q3 financial results. Now, I transfer to CEO Dr. Jack Zhao to answer your questions. Jason, you may begin.
Yes, thank you, Yo-Ming. Ladies and gentlemen, we will now begin the English question and answer session. If you wish to ask a question, please press the star key and number one on your telephone keypad, and you will enter the queue. After you are announced, please ask your question. Should you wish to cancel your question, you may press the star key and number two. Thank you. Now, please press star one on your keypad if you would like to ask a question. Thank you. First one will have L1 HSBC for questions. Go ahead, please.
Hi, can you hear me? Yes. Yeah, hi, Jack and Yo-Ming. This is L from HSBC, and thank you for taking my questions. My first question is, I'm curious about the product mix in third quarter and the outlook for the next quarter. Thank you.
Okay. In Q3 2025, the DisplayPort or those TCON-related, we call it DP product, was about 40%. Our high-speed product, we call the PS product, was a little below 50%. Our TC or our soft driver product line was lower than 10%. Our TT or standalone touch product was lower than 5%. In the coming quarter, or this Q4 quarter, we don't see a percentage or variation that much, and the product line probably more or less in the percentage in the similar situation. Only one may have a higher percentage would be the TT because we are start to shipping or deploy our TT device, which we consider as in the category of TT segment. I think we already introduced to the investment community, we have integrated the TCON soft driver and the touch together, we call it TT device.
Those devices were mass production in the Q4 and belong to the TT category.
Thank you. It's very clear. I have a follow-up question regarding, since we have the TCON for the Standard-plus client, I'm just curious if there's any opportunities to provide chip solutions to this Standard-plus client going forward. Thank you.
Yeah, we are designing the TCON type of advanced TCON product for Standard-plus customer, as we are talking now. We continue receiving more so-called IFQ, IFR for many products, including high-speed type of product as well. We are pretty busy working with the customer to provide more device and more technology and more opportunity, more the variation of products. Yeah.
Okay, thank you. That's all for the questions. I'll get back to the queue.
Thank you. Next one, Daniel Yen, Morgan Stanley. Go ahead, please.
Hello. Good afternoon, Jack and Yo-Ming. Thanks for taking my question. My first question will be regarding your near-term outlook. For your fourth quarter, based on your guidance, on a US dollar basis, you are looking at revenue to be down around 10% for the quarter. If I look at the number comparing to last year, that also means your year-over-year is in decline. I'm wondering, what's the major driver for the fourth quarter's relatively weakness? Is it from, do you see any segment or any particular clients like Standard- plus or standard clients driving the weakness, or is it just the overall industry inventory digestion? The first question is mainly regarding the very short term, your guidance. Thank you.
Okay, thank you for the question, but I wasn't sure that the year-over-year Q4 compared with last year will be declined. That's the first thing I would like to correct. Yeah, based on the guidance, it's not necessary it will be declined. The Q4, the PC and notebook compared to Q3, there are two factors. One is seasonality. It's kind of reduced in Q4 versus Q3. The second one, I think we start to see from September, we start to see the weakness on demand from the DHL. We thought it might be likely the previous, the customer might have more inventory due to the tariff or in the previous quarters. Now they are doing the inventory control or inventory correction. That's the two factors we think is happening in Q4. Other than that, I don't see any pattern or any design loss and something else. Okay.
Got it. Thank you, Jack. Jack, you always have a, I think every time you can give us some view beyond just one quarter. This time, I want to consult your opinion again. Looking beyond 2025, let's say, Q2 2026, do you think this time the customer will start to restock again in Q2 2026, or is it still too long a way for you to comment on this? Just want to consult your opinion.
I'm not sure how I would answer this question. I would think that we read many of the research reports as you do. In general, 2026, the notebook PC continues to grow, but in the lower single-digit percentage as we read. However, for our own product, we continuously see our strengths on the USB4 retimer for two factors. One is a new platform will start to ship in. Another is a notebook adoption, more USB4 retimers instead of two port, may have a three port or those kind of situations. We have our TT device, as I openly just said, and it has huge wide rate adoption. The 2026 for Parade, we may continue growth. Relative to the small growth, the PC and notebook shipment in unit, we probably growth will be higher than that.
I see. Thank you. It's very clear. Yeah, from me, the second question will be regarding some of your new potential new business opportunities. Since we have all, I think we have PCIe, we have USB4, we also can provide some of the legacy SATA interface. All of these are already TCON proven with our foundry partners. I'm just wondering, Jack, can you give us some idea? Is there any new new TAM we can try to address? We are still mainly in a notebook, but how about desktop? Is there any new opportunities and how should we think about the TAM and also the ramp-up timing? Thank you.
It has been our strategy for about a few years. I think I had a talk before. We call it ASIC-like opportunity. What that means, ASIC-like, is we work with the customer. Customer defines a chip spec for their own application. We use our high-speed IP and others to design a chip according to their specification. We own the product, we own and sell to that specific customer. That has been our strategy because, as you realize, we have many high-speed service and so on and so forth. That has been proven in the marketplace. Those are pretty good value for many customers. We do have multiple applications with multiple tier-one customers. For a lot of engineering resources, particularly in 2026, a high percentage of our engineering resources will work on those products and work on those opportunities. Typically, those demand a much higher speed for different categories of applications.
I think that's our new strategy. So far, we feel it worked out pretty well because those end customers are tier one, and business or sort of visibility are much better, but the chips are much bigger. Those are the things as a new opportunity. We think in the next few years, it might become our big segment for our business. That strategy has been developed or developing for a few years because we have to prove our high-speed service or IOs and the high-speed IPs in the deep submicron, for example, 12 nanometer, 6 nanometer, so on and so forth. We spend a couple, I mean, one or more to test out those, to prove those IPs. Now is where we are doing real product with real opportunity with a few customers. We think we may be able to do more. That's where we are.
Our engineering team, a large percentage of the engineering team next year will focus on those opportunities.
Got it. Thanks, Jack. If I may follow up, from your point of view, this kind of ASIC-like business, do you think you are targeting a very similar gross margin profile versus the corporate average now, or since you are putting more engineering resources, then you require a higher return? I am just wondering what will be your strategy on the, how do you think about the profitability target for the ASIC-like businesses?
If you look at it, what do we do with Standard-plus customer? It's a very similar model on the business side, right? They put a spec that we designed the chip. We have been doing this arguably more than 10 years or almost 15 years, but it was just for the Standard-plus customers. Now we just expand, expand a different category of customer and more towards using the high speed. In fact, multiple companies are interested. The gross margin, we should, yeah, there's not much change. At least from the world we view and from the business engagement, yeah, I don't see any difference or any margin where if it changes, it would be better.
I see. Very clear. Thanks, Jack. I'll be back in the queue.
Thank you. Next one, Carol Hu, UBS. Go ahead, please.
Hi, thanks for taking my question. My first question is regarding PC market development. NVIDIA and Intel have announced closer collaboration in September. Wonder if there will be any potential impact on Parade Technologies' business and product development. That will be my first question. Thank you.
Which announced? Could you repeat again, Mr.? First question. Hello?
To NVIDIA and Intel's collaboration.
Okay. I was thinking that the NVIDIA-Intel collaboration is good, right? Because I thought the, I don't know the details of the Intel make at an NVLink though, and also the software side. That's what I think. They want to make Intel in the data center a lot more powerful. This thing seems, we look at a positive because the market will demand more high-speed device and ultra-high-speed device. Those are positive for Parade in general. Those are indirect. I don't see any of the direct relationship there.
Thank you. My second question will be regarding your latest development in auto business. Wonder if you could share with us more about this business opportunity. Thank you.
We're doing quite, I think, 2025 versus 2024, our revenue in the automotive grows significantly higher. I would look at it on the revenue side. It's a very high percentage in there, and mainly associated with the EV car in the U.S. and also some of them in Germany and in China. We're continuing designing our, with this particular customer, our high-speed converter for display and our so-called disposable hub for the infotainment and USB box for the automotive, as well as those connect to our display solution. We just got a first-ever eDP-based TT device for automotive, and the customer actually gets very excited. We expect 2026, the automotive will grow further. Automotive as a whole, the revenue comes up slowly but pretty steady. We're looking forward to more of the automotive revenue creation there.
Got it. Thank you very much. I'll get back to the queue. Thank you.
Thank you.
Thank you. Next one, Vivian Yen, Nomura . Go ahead, please.
Hi, Jack and Yo-Ming. Can you hear me?
Yeah, good.
Just follow up on the auto business. Can you tell us like how much of the auto is like the percentage of your revenue currently, and do you have any target for longer term?
I don't know exactly, but at this moment, it's still kind of single digit. It will grow more meaningful in the next few years, which I mean over 10% type of thing. Yeah, we are still taking all the opportunities and design with customers. The only thing is the auto guy qualification typically takes a longer time than the PC and notebook. We do have a pipeline in place for our solutions.
Okay. My second question is regarding the guidance. I think you provide a standard gross margin range. Do you see any impact from rising or offset cost? Also, for the OpEx range, it seems to be $1 million higher. Can you provide more details on that?
The offset price increase still remains manageable. The only thing is more few impact was those gold and some of packaging related to the gold, and the gold increase is quite significant. On the other side, the general foundry wafer price are dropping or at least not increasing. Net net, the operation cost, we did not expect much of operation cost increase. That's the current view. Of course, we have to look forward for the 2026, and we try to see anything. I understand what you more refer to is the BT substrate shortage. We use BT substrate, but we don't use that many. Many of our products are QFN-based. That's the I try to explain. Also the CSP-based, basically. You don't have a package.
Okay. Thank you. I'll back to the queue.
Thank you. Next question, Lucas Lu, KGI. Go ahead, please.
Hi, Jack and Yo-Ming. Can you hear me?
Yeah.
Okay. The fourth quarter is shaping up to be a year-end low season. How do you preliminary view next year's first quarter? Will it still be a low season? In which quarter do you expect the next round of customers pulling and inventory restocking?
I only can comment based on the normal seasonality. I think that's what we observed. I think Q1 probably still is okay. Q2 is slightly higher, Q3 is much stronger, and Q4 is a little bit lower. Those are the kind of seasonality. Overall, 2026, our modeling is based on the overall unit growth of notebook is within the low percentage globally. However, we pay more attention to our own growth on the strength of our current product line, new product, and the new introduction device. We understand the market, the demand in terms of unit is on the lower percentage. We have to, in that environment, still grow based on new technology, new device, and also the new direction as well. The other analysts asked, could we have a new strategy to do? We'll start to gain some momentum as time goes.
Of course, the longer time will gain much bigger, as we can see.
Got it. Very clear. Can you share now a ranking of current pricing pressure across your product lines, and which ones face the greatest pressure and which are relatively lighter?
Certainly, the panel solution, the traditional panel solution, which is soft driver plus TCON, are most priced and many China startups come out of those soft driver devices, right? Those are the, as we talked many times. To us, we effectively have the solution which we do integrate the soft driver, TCON, and the touch. After many years of hard working and development, those devices are into the production. We are very, very busy to bring in many models for many OEMs. Next year, on that segment, we will have a massive deployment with the good revenue associated with those. Those devices are new, and the competitor has not come in. Those are the areas we are in, and include the TT device, the integrated TCON, and the soft driver. We are cutting through the area with soft driver plus TCON and the very traditional architecture.
Those price pressure are high. We probably still participate in those low-end segments, but it's less compared with many years ago.
Got it. Very clear. I will have some follow-up questions for the Standard-plus customer, especially on its high-speed interface product side. What can we see this customer's high-speed interface products growing, moving into next year? Is there any new products or new opportunities we are having?
As I pointed out previously, we have many discussions going on and/or IFQ going on to do the device on the high-speed side. Those devices are pretty big. A development takes at least a year to do it. I said our engineering team next year, a high percentage engineering team will work on ASIC-like opportunities.
Okay. My last question, I'll focus more on the data center cabling ACC that you mentioned, your plans around this segment. As we enter this quarter, are there any new developments you can share with us and your outlook and thoughts on next year's maybe shipment volume and revenue contribution for this business?
Yeah. It is new to Parade, but since we acquired Spectra7 last year, right? We continue marketing or shipping the ACC solution to end customers. Those for the cable tool, I think that's the three-meter cables for the data center. We are developed and qualified both for the majority for the 224 Gb per second, the ACC solutions. We are also participating in bidding for those ACC cables. We are still learning. We are still new, right? Those are the new business for us. We do put quite many resources on the silicon germanium side for those cabling opportunities. The data center now, investment, as you know, is going crazy. You may get more inquiry, more people looking for the solutions. The activity is pretty high, but I have to acknowledge it's the new business for us.
Sure. Very helpful. I'll be back to the queue. Thank you.
Thank you. Next one, Michael Xhi [Yuan Da]
Hi, management team. Can you hear me?
Yeah, hey, you're welcome.
Thanks. Because there are many investors and also analysts ask about the next year's outlook, I just want to follow up about, is there any huge product mix change in the next year, or it just will continue to sustain this year, like the interface? Soft driver will maintain this kind of product mix.
As I pointed out in the opening, the first question, you expect next year, yeah, the high-speed PS product, the percentage will continue going up.
Okay. Cool.
Your TT, which we assign TTD, which is TCON, soft driver and touch integrated to that category. You will see the TT category next year will increase. If you are 100%, then you will know that the TT or TC area, the soft driver will continue to reduce. That's a change that you are integrated solution, right? You don't have many standalone anymore. As that same concept, your DP TCON, also the number of also will reduce because your huge amount, you go to the TTD and the area because your one device represents three devices there. That's what I tried to point out. You will see obvious PS increase.
Okay. Got it. Thanks.
Thank you. Next one, Mike Yen, Bank of America. Go ahead, please.
Hello, Jack and Yo-Ming. Can you hear me?
Yeah.
Okay. Thank you for taking my question and congratulations on the new product launch. I have a follow-up on the data center and service side. Is there any target share regarding the revenue contribution in terms of the percentage or other in 2020? That's my first.
On the data center side, we are continuing as we continue shipping our ACC for the data center. We engage with the customer with PCIe Gen 6 redriver opportunities. We also engage similar opportunities into the data center with our retimer that we had before. Those are continued there. Probably it's more the newer opportunities on the ACC cable side. As I think as a second PCIe Gen 6, the.
Got it. Thank you, Jack. My next follow-up will be on the, I think some other person also asked about the NVIDIA and Intel collaboration previously. I think it's not just on the data center side, but also on the PC side that for the Intel-powered device, we can also have the GPU coming from NVIDIA. I think following that, just want to change, or is there any kind of forecast that you could imagine in the next few years? I think this will also kind of have some impact on your USB-related business. Thanks for adding colors.
At least I don't see the coming year or year after on the USB4. As I had said, the USB4 retimer next year will continue to grow in terms of percentage. The real driver is that there's one new platform that will go to the market, and that has been delayed, but it will go to the market. On that platform, the USB4 retimer is using our solution. Also, those notebooks have multiple, two or three are typical to use the USB4 retimer. The year after, we have a new opportunity. The big outside the PC notebook guy adopts our USB4 retimer, and that will be started in late 2026 or then 2027. It's a huge number of shipments to come. For us, USB4 retimer for 2026, 2027, and the number will continue to grow.
I think after 2027, that will be USB4 V2, which we have had that device in our lab for a while already. We are engaged with the tier-one system customer for those solutions. Beyond 2027, it's the USB4 V2.2 or 80 Gb per second solutions. As we said many times, we're not just doing the USB4. We're doing USB4, which means we will have USB4 hub, host controller, as well as the mux the mux redriver. We are serving all the way to the monitor to everywhere. That's where we are lining up our resources. Those are the standalone, those are the sort of we provide device. It's already in our either introduced to the customer or going to introduce to the customer. I don't really see the Intel, those things will really impact our USB4. I don't see those.
Got it. Thank you very much, Jack, for the colors.
Yeah, I think it's fair to say if you go ask the customer on today's USB4 retimer, many of our OEM customers will tell you, "Yeah, Parade device is probably better than the Intel." If Intel allows us to design, all the OEMs will jump up.
Got it. That's very clear. Thank you again, Jack. I'll go back to the queue.
I don't worry that much at all.
Okay. That's very helpful. Thank you, Jack.
Thank you.
Next one, Chien Yen , KGI. Go ahead, please.
Hi, Jack. Can you hear me?
Yes, you were.
Thank you. For phone products, I know that you don't have phone products yet, but I'm wondering if we are going to see foldable, because it's a larger panel, right? If we are going to see that, you can potentially penetrate into foldable devices.
Okay. I don't want to comment on those things. I don't know more than you do, okay? The only thing I know, we serve for multiple IFQ for TCON devices and are very busy on it. Those, as I explained before, those businesses, it looks like the ASIC-like business. They define the spec, we implement with our IPs, right? We are very busy on those fronts. I don't know those foldable, not foldable, or I don't want to comment on those.
Okay. I see. For the ASIC-like revenue stats, I think it takes time to cook. If we can have some color stats in next year or to 2027, 2028, how much do you expect to grow in terms of percentage of revenue?
If our ASIC-like strategy carries on successfully, as we said, we put a huge resource into it. The 2027, 2028, the growth was quite much higher than our previous years. It's just because those projects are big, and we invest significantly. Those projects are big.
I see. I think in previous years, you probably grow like 20%, 30% at most, 30% at most. If we implement that strategy well, then it's easily we can grow higher than 30%.
I don't want to comment. Don't give a number. I think it's a little bit far away. I don't want to, yeah.
That's okay, it will be high.
Very high. We spent last year and a lot of time this year to develop the IPs for high speed in the deep, the FinFET, the submicron technology. We are careful to make a product for tier-one customers. That strategy at this moment works quite well. We got multiple opportunities. I would think we are very busy to do this.
Yeah, that's good. How many can we know that how many customers, tier-one customers that you are working with?
Multiple customers.
I know. Multiple, I see. Okay.
If I would have a resource, I could take more. I'm kind of, yeah.
Sorry, I see.
Yeah, we limit our resource. We kind of just hold on now. We cannot take more of those opportunities.
Okay. My last question is, when do you think that, I think maybe in three months or six months, when is the milestone that we can check with you that if you implement that?
I think you have a half-year, six, nine months later. We have a much better visibility.
Visibility.
Yeah. We'll have a much better visibility.
Six months.
Yeah, our strategy being we communicate with the investment community that we need to really realize our IP value. To realize our IP value, you have two ways to do it. One is you do standalone product, and as we did it many, and one is you use in your piece, go do some big trips and the market yourself. That works reasonably well at this moment.
I see. Okay. Great. Thank you, Jack. I don't have questions.
Thank you. Next one, Bruce Lu, Goldman Sachs. Go ahead, please.
Hi, can you hear me?
Yes.
Okay, I want to follow up with the ASIC business as well. I mean, can you tell us the business model you did with your customer? Is that different with the same thing for, you know, other companies when they talk about the ASIC business? They have certain collaboration with the customer, i.e., customer provides certain IP or designs some kind of chips.
That's what I try to distinguish with ASIC, right? Typically, when we say ASIC, the concept was your customer provides you ITO code. Customer designed the chip. You just implement the make a product, right? We more like what we did or has been for with our Standard-plus, which means they only give you a spec and work together to do form the product. Many is based on our own IP. We don't license from anybody anything, right? We implement this.
We sell marketing that product, sell to their customer for very specific, very clear their needs. So it's.
I mean, Jack,
from our perspective, we have so many different kinds of companies, right? From Broadcom, Avago, their ASIC profitability is very different with, you know, MediaTek, LG, or Marvell, right? It's different value proposition. What I'm trying to do with your ASIC is you would deliver at least better than your corporate average margin or higher than the corporate average margin, you know.
I don't see the margin. Just so I answer, it will be better than the previous question was whether it will impact our margin. No, it won't. It will be getting better.
How much better?
I don't want to comment at this moment. Yeah, until you see it. Because the issue is your assumption now versus when you the product deliver, there are multiple years there, right? The cost structure is very different.
Yeah, you get paid by what you do, right? If you only do, like, service or you only do, like, a place and route, if you do the complete design, the range can be from 15% to 70%.
Our value is not just price. Our value is price.
I understand, but the value from Marvell is like, from Broadcom, it's 70%, 80%.
It can be very different. Of course, Broadcom has its own way to, yeah, because of the size, right? I wouldn't say we can do 70% or 80%, but we will be at least better than our current corporate margin.
I see.
Okay. I hope I answered your question, but those are the new strategy, new direction. As I explained a few times, we are trying to value our own high-speed to make it more valuable and create more. To me, it's more important to create a large-sized revenue to grow.
Yes. Thank you, Jack. In the interest of time, we will now begin the question and answer session. Foreign language]
Hi, Jack, [Foreign language]
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[Foreign language] very much focus on high speed [Foreign language]
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[Foreign language] imagination, [Foreign language] performance-driven [Foreign language]
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[Foreign language] integration.
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Okay, thank you everybody.
Thank you.
Thank you.