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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to .

Commission file number: 002-25577

DIODES INCORPORATED

(Exact name of registrant as specified in its charter)


Delaware		95-2039518
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)


4949 Hedgcoxe Road, Suite 200, Plano, Texas		75024
(Address of principal executive offices)		(Zip code)

(972) 987-3900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.66 2/3	DIOD	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s Common Stock outstanding as of November 3, 2025 was 46,385,331.

DIODES INCORPORATED AND SUBSIDIARIES

Table of Contents


		Page
Part I – Financial Information
Item 1. Financial Statements (Unaudited)		3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3. Quantitative and Qualitative Disclosures About Market Risk		32
Item 4. Controls and Procedures		32
Part II – Other Information
Item 1. Legal Proceedings		33
Item 1A. Risk Factors		33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		33
Item 3. Defaults Upon Senior Securities		33
Item 4. Mine Safety Disclosures		33
Item 5. Other Information		33
Item 6. Exhibits		34
Signatures		35

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

DIODES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share data)


	September 30,			December 31,
	2025			2024
Assets
Current assets:
Cash and cash equivalents	$	376,587		$	308,671
Restricted cash		5,460			6,053
Short-term investments		9,807			7,464
Accounts receivable, net of allowances of $4,169 and $7,799 at September 30, 2025 and December 31, 2024, respectively		303,813			325,517
Inventories		470,912			474,948
Prepaid expenses and other		106,931			101,500
Total current assets		1,273,510			1,224,153
Property, plant, and equipment, net		657,413			684,259
Deferred tax assets		54,511			51,974
Goodwill		183,144			181,555
Intangible assets, net		50,264			67,397
Other long-term assets		250,949			176,943
Total assets	$	2,469,791		$	2,386,281

Liabilities
Current liabilities:
Lines of credit	$	33,167		$	31,429
Accounts payable		146,910			133,765
Accrued liabilities and other		175,235			186,576
Income tax payable		23,726			22,730
Current portion of long-term debt		4,758			1,096
Total current liabilities		383,796			375,596
Long-term debt, net of current portion		20,097			19,563
Deferred tax liabilities		11,223			6,953
Unrecognized tax benefits		24,646			24,646
Other long-term liabilities		82,608			90,576
Total liabilities		522,370			517,334

Commitments and contingencies (See Note 9)

Stockholders' equity
Preferred stock - par value $1.00 per share; 1,000,000 shares authorized; no shares issued or outstanding		-			-
Common stock - par value $0.66 2/3 per share; 70,000,000 shares authorized; and 46,383,277 shares and 46,332,891 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		37,257			37,083
Additional paid-in capital		531,433			523,744
Retained earnings		1,775,237			1,719,298
Treasury stock, at cost, 9,499,364 shares and 9,288,420 shares at September 30, 2025 and December 31, 2024, respectively		(348,104	)		(338,100	)
Accumulated other comprehensive loss		(106,669	)		(146,724	)
Stockholders' equity		1,889,154			1,795,301
Noncontrolling interest		58,267			73,646
Total equity		1,947,421			1,868,947
Total liabilities and stockholders' equity	$	2,469,791		$	2,386,281

The accompanying notes are an integral part of these condensed consolidated financial statements.

-3-

DIODES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Net sales	$	392,170		$	350,079		$	1,090,495		$	971,822
Cost of goods sold		271,682			232,071			749,989			646,844
Gross profit		120,488			118,008			340,506			324,978

Operating expenses
Selling, general, and administrative		60,498			59,388			178,667			171,590
Research and development		41,861			33,691			121,025			100,844
Amortization of acquisition related intangible assets		5,850			3,833			17,513			11,497
Loss (gain) on disposal of fixed assets		699			(571	)		700			(5,525	)
Restructuring charges		9			(211	)		343			8,039
Other operating (income) expense		(1	)		1			1			-
Total operating expense		108,916			96,131			318,249			286,445

Income from operations		11,572			21,877			22,257			38,533

Other income (expense)
Interest income		8,487			4,532			21,324			13,383
Interest expense		(503	)		(456	)		(1,476	)		(1,840	)
Foreign currency (loss), net		(3,328	)		(4,423	)		(9,943	)		(2,652	)
Unrealized gain (loss) on investments		2,391			(3,410	)		28,004			1,310
Impairment of equity investment		-			-			(5,817	)		-
Gain on disposal of subsidiary		-			-			13,730			-
Other income		413			682			1,409			1,678
Total other income (expense)		7,460			(3,075	)		47,231			11,879

Income before income taxes and noncontrolling interest		19,032			18,802			69,488			50,412
Income tax provision		3,555			3,619			12,638			9,799
Net income		15,477			15,183			56,850			40,613
Less net income attributable to noncontrolling interest		(1,199	)		(1,438	)		(911	)		(4,830	)
Net income attributable to common stockholders	$	14,278		$	13,745		$	55,939		$	35,783

Earnings per share attributable to common stockholders:
Basic	$	0.31		$	0.30		$	1.21		$	0.78
Diluted	$	0.31		$	0.30		$	1.20		$	0.77
Number of shares used in earnings per share computation:
Basic		46,383			46,331			46,384			46,166
Diluted		46,437			46,442			46,454			46,378

The accompanying notes are an integral part of these condensed consolidated financial statements.

-4-

DIODES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Net income	$	15,477		$	15,183		$	56,850		$	40,613
Unrealized gain on defined benefit plan, net of tax		2,754			132			7,014			4,070
Unrealized gain (loss) on derivative instruments, net of tax		11,309			(9,790	)		(11,784	)		1,005
Unrealized foreign currency (loss) gain, net of tax		(20,453	)		29,246			44,825			22,568
Comprehensive income		9,087			34,771			96,905			68,256
Less: Comprehensive income attributable to noncontrolling interest		(1,199	)		(1,438	)		(911	)		(4,830	)
Total comprehensive income attributable to common stockholders	$	7,888		$	33,333		$	95,994		$	63,426

The accompanying notes are an integral part of these condensed consolidated financial statements.

-5-

DIODES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands)


	Common stock				Treasury stock						Additional paid-in			Retained		Accumulated other comprehensive			Total Diodes Incorporated stockholders'			Noncontrolling			Total
	Shares		Amount		Shares			Amount			capital			earnings		loss			equity			interest			equity
Balance, June 30, 2025		55,710	$	37,142		(9,499	)	$	(348,104	)	$	527,385		$	1,760,959	$	(100,279	)	$	1,877,103		$	57,068		$	1,934,171
Total comprehensive income		-		-		-			-			-			14,278		(6,390	)		7,888			1,199			9,087
Net changes in noncontrolling interest		-		-		-			-			-			-		-			-			-			-
Common stock issued for share-based plans		172		115		-			-			(115	)		-		-			-			-			-
Share-based compensation		-		-		-			-			6,826			-		-			6,826			-			6,826
Tax related to net share settlement		-		-		-			-			(2,663	)		-		-			(2,663	)		-			(2,663	)
Balance, September 30, 2025		55,882	$	37,257		(9,499	)	$	(348,104	)	$	531,433		$	1,775,237	$	(106,669	)	$	1,889,154		$	58,267		$	1,947,421

	Common stock				Treasury stock						Additional paid-in			Retained		Accumulated other comprehensive			Total Diodes Incorporated stockholders'			Noncontrolling			Total
	Shares		Amount		Shares			Amount			capital			earnings		loss			equity			interest			equity
Balance, December 31, 2024		55,621	$	37,083		(9,288	)	$	(338,100	)	$	523,744		$	1,719,298	$	(146,724	)	$	1,795,301		$	73,646		$	1,868,947
Total comprehensive income		-		-		-			-			-			55,939		40,055			95,994			911			96,905
Net changes in noncontrolling interest		-		-		-			-			(6,855	)		-		-			(6,855	)		(16,290	)		(23,145	)
Common stock issued for share-based plans		261		174		-			-			(174	)		-		-			-			-			-
Share-based compensation		-		-		-			-			19,005			-		-			19,005			-			19,005
Stock buyback		-		-		(211	)		(10,004	)		-			-		-			(10,004	)		-			(10,004	)
Tax related to net share settlement		-		-		-			-			(4,287	)		-		-			(4,287	)		-			(4,287	)
Balance, September 30, 2025		55,882	$	37,257		(9,499	)	$	(348,104	)	$	531,433		$	1,775,237	$	(106,669	)	$	1,889,154		$	58,267		$	1,947,421

The accompanying notes are an integral part of these condensed consolidated financial statements.

-6-

DIODES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (CONT.)

(Unaudited)

(In thousands)


	Common stock				Treasury stock						Additional paid-in			Retained		Accumulated other comprehensive			Total Diodes Incorporated stockholders'			Noncontrolling			Total
	Shares		Amount		Shares			Amount			capital			earnings		loss			equity			interest			equity
Balance, June 30, 2024		55,434	$	36,958		(9,288	)	$	(338,052	)	$	513,309		$	1,697,312	$	(135,172	)	$	1,774,355		$	77,221		$	1,851,576
Total comprehensive income		-		-		-			-			-			13,745		19,588			33,333			1,438			34,771
Net changes in noncontrolling interest		-		-		-			-			853			-					853			(6,934	)		(6,081	)
Common stock issued for share-based plans		185		124		-			-			(124	)		-		-			-			-			-
Share-based compensation		-		-		-			-			6,817			-		-			6,817			-			6,817
Deferred compensation plan		-		-		-			(48	)		48			-		-			-			-			-
Tax related to net share settlement		-		-		-			-			(3,774	)		-		-			(3,774	)		-			(3,774	)
Balance, September 30, 2024		55,619	$	37,082		(9,288	)	$	(338,100	)	$	517,129		$	1,711,057	$	(115,584	)	$	1,811,584		$	71,725		$	1,883,309

	Common stock				Treasury stock						Additional paid-in			Retained		Accumulated other comprehensive			Total Diodes Incorporated stockholders'			Noncontrolling			Total
	Shares		Amount		Shares			Amount			capital			earnings		loss			equity			interest			equity
Balance, December 31, 2023		55,225	$	36,819		(9,287	)	$	(337,986	)	$	509,861		$	1,675,274	$	(143,227	)	$	1,740,741		$	68,936		$	1,809,677
Total comprehensive income		-		-		-			-			-			35,783		27,643			63,426			4,830			68,256
Net changes in noncontrolling interest		-		-		-			-			853			-		-			853			(2,041	)		(1,188	)
Common stock issued for share-based plans		394		263		-			-			(263	)		-		-			-			-			-
Share-based compensation		-		-		-			-			16,080			-		-			16,080			-			16,080
Deferred compensation plan		-		-		(1	)		(114	)		114								-			-			-
Tax related to net share settlement		-		-		-			-			(9,516	)		-		-			(9,516	)		-			(9,516	)
Balance, September 30, 2024		55,619	$	37,082		(9,288	)	$	(338,100	)	$	517,129		$	1,711,057	$	(115,584	)	$	1,811,584		$	71,725		$	1,883,309

The accompanying notes are an integral part of these condensed consolidated financial statements.

-7-

DIODES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Nine Months Ended
	September 30,
	2025			2024
Cash flows from operating activities
Net income	$	56,850		$	40,613
Adjustments to reconcile net income to net cash flows from operating activities, net of effects of acquisitions
Depreciation		90,974			90,762
Amortization of intangible assets		17,513			11,497
Share-based compensation expense		19,005			16,083
Deferred income taxes		(304	)		(307	)
Investment gain		(27,613	)		(1,336	)
Gain on sale of subsidiary		(13,730	)		-
Impairment of long-lived assets		5,836			-
Gain (loss) on disposal of fixed assets		700			(5,525	)
Interest income from derivative financial instruments		(15,484	)		(7,091	)
Other		381			(2,206	)
Changes in operating assets:
Change in accounts receivable		27,778			16,482
Change in inventory		12,645			(90,155	)
Change in other operating assets		1,859			3,669
Changes in operating liabilities:
Change in accounts payable		10,049			(9,200	)
Change in accrued liabilities		(12,671	)		(19,439	)
Change in income tax payable		(97	)		(6,975	)
Change in other operating liabilities		3,706			741
Net cash flows from operating activities		177,397			37,613

Cash flows from investing activities
Acquisition, net of cash acquired		(5,160	)		-
Purchases of property, plant, and equipment		(52,660	)		(53,328	)
Proceeds from sale of property, plant, and equipment		5,660			1,088
Proceeds from short-term investments		7,629			15,468
Purchases of short-term investments		(8,919	)		(12,958	)
Purchases of equity securities		(49,303	)		-
Proceeds from sale of subsidiary		15,958			-
Insurance recovery		-			4,725
Net amounts paid for hedge termination		(6,635	)		-
Other		(540	)		(3,870	)
Net cash flows from investing activities		(93,970	)		(48,875	)

Cash flows from financing activities
Advances on lines of credit and short-term debt		34,036			67,920
Repayments of lines of credit and short-term debt		(34,906	)		(72,433	)
Proceeds from long-term debt		6,539			6,283
Repayments of long-term debt		(4,097	)		(5,554	)
Repayment of and proceeds from finance lease obligation		(73	)		(36	)
Taxes paid related to net share settlement		(4,287	)		(9,516	)
Net changes in noncontrolling interest		(18,004	)		2,544
Repurchase of common stock		(10,004	)		-
Other		(28	)		(4,744	)
Net cash flows from financing activities		(30,824	)		(15,536	)

Effect of exchange rate changes on cash and cash equivalents		14,720			25,399
Change in cash and cash equivalents, including restricted cash		67,323			(1,399	)
Cash and cash equivalents, beginning of period, including restricted cash		314,724			318,483
Cash and cash equivalents, end of period, including restricted cash	$	382,047		$	317,084

-8-


Supplemental Cash Flow Information
Interest paid during the period	$	1,237	$	1,618
Taxes paid during the period	$	21,205	$	18,302
Non-cash investing and financing activities:
Accounts payable balance related to the purchase of property, plant, and equipment	$	12,237	$	13,186

The accompanying notes are an integral part of these condensed consolidated financial statements.

-9-

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – Summary of Operations and Significant Accounting Policies

Summary of Operations

Diodes Incorporated, together with its subsidiaries (collectively the “Company,” “we,” or “our” (Nasdaq: DIOD)), a Standard and Poor’s Smallcap 600 and Russell 3000 Index company, delivers high-quality semiconductor products to the world’s leading companies in the automotive, industrial, computing, consumer electronics, and communications markets.

The Company’s diverse product portfolio covers diodes; rectifiers; transistors; MOSFETs; SiC diodes and MOSFETs; protection devices; logic; voltage translators; amplifiers and comparators; sensors; isolation; and power management devices such as AC-DC converters, DC-DC switching, photocoupler, linear voltage regulators, voltage references, LED drivers, power switches, and voltage supervisors. We also have timing and connectivity solutions including clock ICs, crystal oscillators, PCIe packet switches, multi-protocol switches, interface products, and signal integrity solutions for high-speed signals.

The Company operates from the following locations, with additional support offices throughout the world:

•

Corporate Headquarters
Plano, Texas, United States

•

Design, Engineering, and Marketing
Shanghai, Yangzhou, Shenzhen, and Hong Kong, China
Oldham, England

Greenock, Scotland

Bratislava, Slovakia
New Taipei City, Hsinchu, and Tainan, Taiwan
Milpitas, California, and Plano, Texas, United States

•

Wafer Fabrication
Shanghai and Wuxi, China
Oldham, England
Greenock, Scotland
Hsinchu, Taiwan
South Portland, Maine, United States

•

Assembly and Test
Shanghai, Chengdu, and Wuxi, China
Neuhaus am Rennweg, Germany
Chongli, Taiwan

•

Sales, Warehouse, and Logistics
Hong Kong, Shanghai, Beijing, Shenzhen, Wuhan, Qingdao, and Xiamen China
Oldham, England
Frankfurt and Munich, Germany
Milan, Italy
Tokyo, Japan
Singapore
Seongnam-si, South Korea
New Taipei City, Taiwan
Milpitas, California and Plano, Texas, United States

The Company’s manufacturing facilities have achieved certifications in the internationally recognized standards of ISO 9001:2015, ISO 14001:2015, and, for automotive products, IATF 16949:2016 and the Company is also C-TPAT certified. We believe these quality awards reflect the superior quality-control techniques established at the Company and further enhance our credibility as a vendor-of-choice to original equipment manufacturers (“OEMs”) increasingly concerned with quality and consistency.

Our market focus is on high-growth, end-user applications in the following areas:

•

Industrial: embedded systems, precision controls, medical, clean energy, machine to machine, robotics, motor control, and AIoT;

•

Automotive: connected driving, comfort/style/safety, and electrification/powertrain;

-10-

•

Computing: cloud computing: server, AI server, storage, data centers, and edge AI;

•

Communications: smart phones, 5G networks, and enterprise networking; and

•

Consumer: IoT: wearables, home automation, home appliances, smart infrastructure, and charging solutions.

Basis of Presentation

The condensed consolidated financial data at December 31, 2024 are derived from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (“SEC”) on February 14, 2025 (“Form 10-K”). The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. They do not include all information and footnotes necessary for a fair presentation of financial position, operating results, and cash flows in conformity with GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in our Form 10-K. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the operating results for the period presented have been included in the interim period. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for other interim periods or the year ending December 31, 2025.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. As permitted under GAAP, interim accounting for certain expenses, including income taxes, are based on full year forecasts. For interim financial reporting purposes, income taxes are recorded based upon estimated annual effective income tax rates taking into consideration discrete items occurring in a quarter.

Dollar amounts and share amounts are presented in thousands, except per share amounts, unless otherwise noted. Certain prior year’s balances may have been reclassified to conform to the current condensed consolidated financial statement presentation.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update require that at each interim and annual reporting period an entity disclose:

•

The amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization recognized as part of oil and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed above;

•

Companies are also required to include certain amounts that are already required to be disclosed under current generally accepted accounting principles in the same disclosure as the other disaggregation requirements;

•

Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and

•

Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted.

In May 2025, the FASB issued ASU 2025-03, “Business Combination and Consolidation: Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity” (“ASU 2025-03”). ASU 2025-03 provides clarifying guidance on determining the accounting acquirer in certain transactions involving VIEs. The update aims to improve consistency and comparability in financial reporting, especially when companies merge with a special-purpose acquisition company (“SPAC”). ASU 2025-03 requires entities to apply the same factors used for determining the accounting acquirer in other acquisition transactions. Essentially, it aims to make financial reporting more comparable and decision-useful for investors by ensuring that the accounting acquirer is appropriately identified in acquisitions of VIEs, particularly in SPAC transactions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact this amended guidance may have on its financial statements.

In July 2025, the FASB issued ASU 2025-05, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain

-11-

unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company does not expect this amended guidance will have a material impact on its financial statements.

NOTE 2 – Earnings per Share

Earnings per share (“EPS”) is calculated by dividing net income attributable to common stockholders by the weighted-average number of shares of Common Stock outstanding during the period. Diluted EPS is calculated similarly but includes potential dilution from the exercise of stock options and stock awards, except when the effect would be anti-dilutive. No dividends were paid on our Common Stock in any of the periods presented in this report.

The table below sets forth the reconciliation between net income and the weighted average shares outstanding used for calculating basic and diluted EPS:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Earnings (numerator)
Net income attributable to common stockholders	$	14,278	$	13,745	$	55,939	$	35,783

Shares (denominator)
Weighted average common shares outstanding (basic)		46,383		46,331		46,384		46,166
Dilutive effect of stock options and stock awards outstanding		54		111		70		212
Adjusted weighted average common shares outstanding (diluted)		46,437		46,442		46,454		46,378

Earnings per share attributable to common stockholders
Basic	$	0.31	$	0.30	$	1.21	$	0.78
Diluted	$	0.31	$	0.30	$	1.20	$	0.77

Stock options and stock awards excluded from EPS calculation because the effect would be anti-dilutive		273		125		674		241

NOTE 3 – Inventories

The table below sets forth inventories which are stated at the lower of cost or net realizable value:


	September 30, 2025		December 31, 2024
Finished goods	$	174,062	$	203,665
Work-in-progress		89,040		80,232
Raw materials		207,810		191,051
Total	$	470,912	$	474,948

NOTE 4 – Goodwill and Intangible Assets

The table below sets forth the changes in goodwill:


Balance at December 31, 2024	$	181,555
Disposal		(2,942	)
Foreign currency translation adjustment		4,531
Balance at September 30, 2025	$	183,144

-12-

The table below sets forth the value of intangible assets, other than goodwill:


	September 30,			December 31,
	2025			2024
Intangible assets subject to amortization:
Gross carrying amount	$	270,997		$	271,000
Accumulated amortization		(221,830	)		(204,317	)
Foreign currency translation adjustment		(8,277	)		(8,507	)
Total intangible assets subject to amortization		40,890			58,176
Intangible assets with indefinite lives:
Gross carrying amount		10,303			10,303
Foreign currency translation adjustment		(929	)		(1,082	)
Total intangible assets with indefinite lives		9,374			9,221
Total intangible assets, net	$	50,264		$	67,397

The table below sets forth amortization expense related to intangible assets subject to amortization:


Amortization expense	2025		2024
Three Months Ended September 30,	$	5,850	$	3,833
Nine Months Ended September 30,	$	17,513	$	11,497

NOTE 5 – Income Tax Provision

The table below sets forth information related to our income tax expense:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Domestic pre-tax income (loss)	$	(27,451	)	$	7,327		$	62,798		$	3,502
Foreign pre-tax (loss) income	$	46,483		$	11,475		$	6,690		$	46,910
Income tax provision	$	3,555		$	3,619		$	12,638		$	9,799
Effective tax rate		18.7	%		19.2	%		18.2	%		19.4	%
Impact of tax holidays on tax expense	$	(353	)	$	438		$	(816	)	$	641
Earnings per share impact of tax holidays:
Basic	$	0.01		$	(0.01	)	$	0.02		$	(0.01	)
Diluted	$	0.01		$	(0.01	)	$	0.02		$	(0.01	)

The decrease in effective tax rate for the three and nine months ended September 30, 2025, when compared to the three and nine months ended September 30, 2024, is primarily due to the change in pre-tax earnings during the comparable periods, including the geographical mix of pre-tax income and loss across tax jurisdictions and changes in conclusions regarding the realizability of certain deferred tax assets.

Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to certain earnings of European and Asian subsidiaries. Any future distributions of foreign earnings will not be subject to additional U.S. income tax but may be subject to non-U.S. withholding taxes.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations by tax authorities for tax years before 2021. We are no longer subject to China income tax examinations by tax authorities for tax years before 2014. With respect to state and local jurisdictions and countries outside of the U.S. (other than China), with limited exceptions, the Company is no longer subject to income tax audits for years before 2018. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties, if any, have been provided for in the Company’s reserve for any adjustments that may result from currently pending tax audits. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in interest expense. As of September 30, 2025, the gross amount of unrecognized tax benefits was approximately $45.5 million.

Several jurisdictions in which we operate have either enacted, or announced plans to enact, legislation consistent with the Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules ("Pillar Two") which introduced a global minimum effective tax rate of 15% applied on a jurisdiction-by-jurisdiction basis. We have analyzed enacted legislation and do not anticipate that it will have a material impact on our effective tax rate for 2025; however, we continue to monitor future tax legislative changes in the jurisdictions in which we operate in order to evaluate the impacts to the consolidated financial statements.

-13-

It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company’s unrecognized tax positions will significantly increase or decrease within the next 12 months. At this time, an estimate of the range of the reasonably possible outcomes cannot be made.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S., which contains a broad range of income tax provisions affecting businesses. The Company has evaluated the impact of this legislation and determined that there is no material impact to income tax expense for 2025.

NOTE 6 – Share-Based Compensation

The table below sets forth information related to our share-based compensation expense:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Cost of goods sold	$	584	$	579	$	1,650	$	1,500
Selling, general, and administrative		4,909		4,916		13,557		10,874
Research and development		1,333		1,271		3,798		3,709

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

DIODES INC /DEL/ 10-Q