Parade Technologies Reports Second Quarter 2024 Financial Results

Financial Highlights:

• Q224 consolidated revenue US$120.87 million, compared with US$104.18 million in the year-ago quarter
• Q224 consolidated net income US$17.58 million; Basic and Fully diluted after-tax EPS US$0.22 (NT$7.11) and US$0.22 (NT$7.09), respectively

SAN JOSE, Calif.--(BUSINESS WIRE)--Parade Technologies, Ltd. (Taipei Exchange: 4966.TWO), a leading high-speed interface IC supplier, today announced financial results for the second quarter fiscal year 2024 ended June 30, 2024, and provided guidance for the third quarter of fiscal year 2024.

Consolidated revenue was US$120.87 million and consolidated net income was US$17.58 million. Basic and fully diluted after-tax earnings per share (“EPS”) were US$0.22 (NT$7.11) and US$0.22 (NT$7.09), respectively. These results compared to consolidated revenue US$104.18 million and consolidated net income of US$13.98 million, or US$0.18 (NT$5.44) and US$0.18 (NT$5.40) per basic and fully diluted share, in the year-ago quarter.

In US dollars, the second quarter of 2024 consolidated revenue decreased 0.34% sequentially and was up 16.02% year-over-year.

The gross profit in the second quarter of 2024 was US$51.28 million, representing a decrease of 1.31% from the previous quarter and an increase of 11.97% compared to the same quarter of last year.

On June 26, 2024, Parade announced PS8830 USB4/TBT4 retimer shipping in key OEM customer Copilot+ PCs based on Snapdragon X Elite and Snapdragon X Plus platforms which offer game-changing AI performance and efficiency. The PS8830 USB4/TBT4 retimer is optimized for use with the Snapdragon X Elite and Snapdragon X Plus platforms. The PS8830 is compliant with USB-IF USB4 specification supporting up to Gen 3×2 40Gbps (2x 20Gbps) and Thunderbolt 4 featuring TBT 3.0 up to 41.25Gbps (2x 20.625Gbps). USB4 tunneling of DP 1.4a and USB 3.2, and DP 2.1 alt mode up to UHBR20 are supported. Customer implementations with Snapdragon X Elite and Snapdragon X Plus platforms may also include Parade PS185 DP-HDMI 2.0 converter for adding HDMI connectivity, PS8719 USB 3.2 Gen 1 redriver and PS8811 USB3.2 Gen 2 retimer for USB-A connectivity, benefiting from their proven performance and industry leading compatibility.

On July 31, 2024, Parade announced the availability of the PS8778 USB4 Gen 3 x2 / TBT4 / DP 2.1 Alt Mode linear redriver for NB/PC, mobile workstation and active cable solutions. The PS8778 supports up to USB4 Gen 3 x2 or 2x 20Gbps, TBT4 2x 20.625Gbps, and DP 2.1 UHBR20 Alt Mode. It implements USB4, USB 3.2 and DP 2.1a power management including Modern Standby (<1mW) and DP 2.1a Advanced Link Power Management (ALPM). The low power design greatly extends the battery life of mobile devices as well as minimizing power use in USB4 active cables. PS8778 comes in a very small package, ideal for space constrained designs. PS8778 extends the overall system channel length by providing additional loss compensation when placed between the SoC (USB4 router) and USB4 retimer such as the PS8833, in a cascade configuration. PS8778 also enables USB4 cables much longer than the 0.8 meter or 2.6 feet limit for a USB4 Gen 3 passive cable, without degrading the performance.

On August 5, 2024, Parade announced PS8833 USB4/TBT4 retimer shipping in AI PCs powered by AMD Ryzen AI 300 Series processors, which feature the new “Zen 5” high performance CPU cores and integrated AI engine for enhanced AI performance. USB4 is becoming ubiquitous on notebook and desktop PCs. The PS8833 USB4/TBT4 retimer is optimized for AMD’s new AI enhanced processor platform. It also allows OEMs to easily upgrade existing platforms from the PS8830 USB3/TBT4 retimer to extend product longevity. The PS8833 is compliant with USB-IF USB4 specification up to Gen 3 or 40Gbps (2x 20Gbps) and Thunderbolt 4 featuring TBT 3.0 up to 41.25Gbps (2x 20.625Gbps). USB4 tunneling of DP 1.4a and USB 3.2, and DP 2.1 alt mode up to UHBR20 are supported. PS8833 features low power consumption in USB4 operation and low power states, greatly extending battery power operations. Customer implementations of AMD Ryzen AI 300 Series processor platform may also include Parade PS8419/PS8219/PS8210 HDMI 2.1 pin compatible retimer/redrivers for enhanced HDMI connectivity, and PS8811 USB3.2 Gen 2 retimer for USB-A connectivity, benefiting from the proven performance and industry leading compatibility.

Based on current business outlook, Parade is providing the following guidance for the third quarter of fiscal 2024:

• Revenue: US$130 ~144 Million
• Gross Margin: 42% ~46%
• Operating Expense: US$32.5 ~35.5 Million

The financial figures detailed above for the second quarter of 2024 have been audited by independent accountants.

About Parade Technologies, Ltd.

Parade Technologies, Ltd. is a leading supplier of mixed-signal ICs for a variety of popular display and high-speed interface standards used in computers, consumer electronics and display panels. The fabless semiconductor company was founded in 2005 and publicly listed on Taipei Exchange (“TPEx”) in 2011 (stock code: 4966). Parade’s portfolio of IC products serves the growing demand for HDMI™, DisplayPort™, SATA, and USB ICs for display, storage and interface applications.

In addition to being a technology innovator, Parade is an active participant and leader in industry standards-setting organizations. Parade Technologies, Inc., a wholly owned US-based subsidiary of Parade Technologies, Ltd., is a member of VESA (Video Electronics Standard Association). Parade Technologies, Inc. has made key contributions to the development of VESA’s DisplayPort™ digital video interface standard.

Parade leverages its close relationships with market leading Tier-1 OEMs to develop ICs that provide unique system capabilities. Many of the company’s devices integrate proprietary technologies that offer superior system signal integrity, advanced system integration and enhanced power efficiency. As a result of the company’s “standards-plus” design philosophy, Parade ICs have been designed into products offered by nearly every leading computer and display vendor worldwide.

Parade Technologies, Ltd. and Subsidiaries.

The reader is advised that these consolidated financial statements have been prepared originally in NT$ and conformed with the adoption of IFRSs. In the event of any differences between NT$ and US$ version, the NT$ version shall prevail.

CONSOLIDATED INCOME STATEMENTS	USD in Thousands																						NTD in Thousands
	Sequential Quarter								Three Months ended								Six Months ended						Sequential Quarter						Three Months ended						Six Months ended
	Jun 30,				Mar 31,				Jun 30,				Jun 30,				Jun 30,			Jun 30,			Jun 30,			Mar 31,			Jun 30,			Jun 30,			Jun 30,			Jun 30,
		2024				2024				2024				2023				2024			2023			2024			2024			2024			2023			2024			2023
Revenue		120,871				121,278				120,871				104,178				242,149			204,168			3,910,184			3,814,192			3,910,184			3,199,298			7,724,376			6,239,010
Cost of goods sold		69,593				69,321				69,593				58,380				138,914			114,327			2,251,323			2,180,148			2,251,323			1,792,845			4,431,471			3,493,642
Gross profit		51,278				51,957				51,278				45,798				103,235			89,841			1,658,861			1,634,044			1,658,861			1,406,453			3,292,905			2,745,368
Research & development expenses		23,158				22,845				23,158				20,293				46,003			40,185			749,173			718,474			749,173			623,198			1,467,647			1,227,915
Sales & marketing expenses		7,554				7,413				7,554				7,188				14,967			14,386			244,373			233,130			244,373			220,732			477,503			439,554
General & administrative expenses		4,775				5,078				4,775				4,888				9,853			9,881			154,480			159,691			154,480			150,109			314,171			301,906
Expected credit loss		-				-				-				-				-			84			-			-			-			-			-			2,549
Total operating expenses		35,487				35,336				35,487				32,369				70,823			64,536			1,148,026			1,111,295			1,148,026			994,039			2,259,321			1,971,924
Operating income		15,791				16,621				15,791				13,429				32,412			25,305			510,835			522,749			510,835			412,414			1,033,584			773,444
Non-operating income		2,866				2,527				2,866				2,055				5,393			3,323			92,723			79,477			92,723			63,081			172,200			101,641
Income before income taxes		18,657				19,148				18,657				15,484				37,805			28,628			603,558			602,226			603,558			475,495			1,205,784			875,085
Income tax expense		1,077				937				1,077				1,505				2,014			3,028			34,852			29,477			34,852			46,226			64,329			92,525
Net income		17,580				18,211				17,580				13,979				35,791			25,600			568,706			572,749			568,706			429,269			1,141,455			782,560
EPS - Basic (In Dollar)		$0.22				$0.23				$0.22				$0.18				$0.45			$0.33			$7.11			$7.21			$7.11			$5.44			$14.31			$9.94
Shares used in computing EPS-Basic (In thousands)		79,939				79,483				79,939				78,947				79,790			78,692			79,939			79,483			79,939			78,947			79,790			78,692
EPS - Diluted (In Dollar)		$0.22				$0.23				$0.22				$0.18				$0.45			$0.32			$7.09			$7.17			$7.09			$5.40			$14.24			$9.85
Shares used in computing EPS-Diluted (In thousands)		80,232				79,850				80,232				79,545				80,162			79,413			80,232			79,850			80,232			79,545			80,162			79,413
CONSOLIDATED BALANCE SHEETS As of June 30, 2024 and 2023	USD in Thousands								NTD in Thousands
	Jun 30,				Jun 30,				Jun 30,				Jun 30,
		2024				2023				2024				2023
Current assets
Cash & cash equivalents		319,028				225,120				10,352,451				7,010,227
Accounts receivable, net		47,161				54,721				1,530,363				1,704,022
Inventories, net		112,755				114,368				3,658,908				3,561,433
Other current assets		28,775				32,666				933,755				1,017,219
Total current assets		507,719				426,875				16,475,477				13,292,901
Non-current assets
Property, plant and equipment, net		11,395				14,970				369,767				466,159
Right-of-use assets		8,620				5,083				279,707				158,295
Intangible assets		99,671				101,772				3,234,327				3,169,177
Deferred income tax assets		12,738				11,143				413,344				346,988
Other non-current assets		157,667				150,473				5,116,310				4,685,730
Total non-current assets		290,091				283,441				9,413,455				8,826,349
Total Assets		797,810				710,316				25,888,932				22,119,250
Current Liabilities
Accounts payable		43,369				29,194				1,407,324				909,092
Other payables		44,942				54,820				1,444,199				1,687,909
Current income tax liabilities		10,777				9,528				349,705				296,692
Lease liabilities - current		3,462				2,960				112,337				92,194
Other current liabilities		7,533				6,490				244,444				202,110
Total current liabilities		110,083				102,992				3,558,009				3,187,997
Non-current Liabilities
Lease liabilities - non-current		5,158				2,123				167,370				66,101
Total non-current liabilities		5,158				2,123				167,370				66,101
Equity
Ordinary shares		26,730				26,735				811,618				811,747
Capital reserves		135,817				134,946				4,172,562				4,212,672
Retained earnings		542,866				498,502				16,118,452				14,740,781
Other equity		(4,577	)			(10,321	)			1,646,438				493,401
Treasury shares		(18,267	)			(44,661	)			(585,517	)			(1,393,449	)
Total equity		682,569				605,201				22,163,553				18,865,152
Total liabilities and equity		797,810				710,316				25,888,932				22,119,250
CONSOLIDATED STATEMENTS OF CASH FLOWS For six months ended Jun 30, 2024 and 2023	USD in Thousands								NTD in Thousands
	Jun 30,				Jun 30,				Jun 30,				Jun 30,
		2024				2023				2024				2023
Cash flows from operating activities
Income before income tax for the period		37,805				28,628				1,205,784				875,085
Depreciation and amortization (including the right-of-use assets)		10,794				11,132				344,331				340,100
Expected credit loss		-				84				-				2,549
Loss on disposal of equipment		22				-				694				-
Loss on disposal of intangible assets		356				125				11,368				3,814
Share-based compensation cost		16,578				17,735				521,011				537,517
Interest income		(5,345	)			(2,925	)			(170,692	)			(89,352	)
Income and expenses having no effect on cash flows		22,405				26,151				706,712				794,628
Accounts receivable		6,943				(20,098	)			225,288				(625,845	)
Inventories		10,129				31,124				328,704				969,215
Other current assets		(23,918	)			(27,673	)			(733,466	)			(737,173	)
Net changes in assets relating to operating activities		(6,846	)			(16,647	)			(179,474	)			(393,803	)
Accounts payable		(7,658	)			16,191				(248,510	)			504,193
Other payables		(6,782	)			(9,303	)			(220,091	)			(289,726	)
Other current liabilities		452				(6,983	)			14,654				(217,466	)
Net changes in liabilities relating to operating activities		(13,988	)			(95	)			(453,947	)			(2,999	)
Cash inflow generated from operations		39,376				38,037				1,279,075				1,272,911
Interest received		5,345				2,925				170,692				89,352
Income taxes paid		(2,438	)			(6,247	)			(77,764	)			(190,854	)
Net cash provided by operating activities		42,283				34,715				1,372,003				1,171,409
Cash flows from investing activities
Acquisition of equipment		(2,040	)			(2,812	)			(65,092	)			(85,894	)
Acquisition of intangible assets		(90	)			(170	)			(2,862	)			(5,181	)
Decrease in refundable deposits		1,887				6,821				61,222				212,389
Increase in other prepayments		(10,939	)			(6,505	)			(348,949	)			(198,738	)
Net cash flows used in investing activities		(11,182	)			(2,666	)			(355,681	)			(77,424	)
Cash flows from financing activities
Repayment of the principal portion of lease liabilities		(1,983	)			(1,786	)			(63,262	)			(54,554	)
Treasury shares reissued to employees		26,394				25,424				807,932				760,161
Distribution of cash dividends		(12,800	)			(60,062	)			(390,871	)			(1,724,498	)
Cash dividend regain from canceled share-based compensation		21				73				663				2,184
Net cash flows from (used in) financing activities		11,632				(36,351	)			354,462				(1,016,707	)
Effect of exchange rate changes		(84	)			2,285				494,066				(42,435	)			-
Net increase (decrease) in cash and cash equivalents		42,649				(2,017	)			1,864,850				34,843
Cash and cash equivalents at beginning of period		276,379				227,137				8,487,601				6,975,384
Cash and cash equivalents at end of period		319,028				225,120				10,352,451				7,010,227

Contacts

Parade Technologies
Yo-Ming Chang, +886-2-2627-9109
ir@paradetech.com