Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Parade Technologies Ltd (ROCO:4966, Financial) reported a year-over-year revenue increase of 4.08% for Q1 2025, reaching USD126.23 million.
- The acquisition of Spectra7 is expected to strengthen Parade's position in high-speed connectivity solutions, particularly in data centers and AI-powered computing.
- Parade's gross profit increased by 3.40% compared to the same quarter last year, indicating improved profitability.
- The company anticipates leveraging Spectra7's cutting-edge technology to expand into high-growth markets such as next-generation consumer electronics.
- Parade's strategic focus on high-speed product lines, including USB4 and PCIe Gen 4, is expected to drive future growth and market share expansion.
Negative Points
- Sequentially, Parade's Q1 2025 revenue decreased by 0.93%, indicating potential short-term challenges.
- The company faces uncertainty due to tariff situations, which could impact demand and financial performance in the near term.
- Pricing pressure remains a concern, particularly in the high-speed interface segment, affecting gross margins.
- The integration of Spectra7 may present challenges, as the acquired company's revenue contribution is currently limited.
- Parade's guidance for Q2 2025 indicates potential flat revenue growth, reflecting ongoing market uncertainties and competitive pressures.
Q & A Highlights
Q: Can you share the product mix for the first quarter and the outlook for the second quarter?
A: In Q1, our DP product line was slightly above 35%, our PS or high-speed port line was under 50%, our TC or soft driver was slightly above 10%, and our tTED was lower than 5%. Moving forward, we continue to see strength in our PS product line on the high-speed side, and our integrated solutions are expected to help recover our DP product line. (Ji Zhao, CEO)
Q: How do you see the tariff impact in your second quarter? Is it positive or negative?
A: Initially, the tariff situation added uncertainty, but customers are now calmer and looking for long-term solutions. We see some positive impacts in Q2, with customer demand pulling in. However, we remain cautious about the longer-term effects on customer behavior. (Ji Zhao, CEO)
Q: What is your view on the overall PC market, especially with the introduction of ARPC and the end of Windows 10?
A: The ARPC has gained significant applications, and we expect demand to increase, particularly in high-end content creation segments. The AI capabilities of new platforms will drive productivity improvements, and we foresee increased demand for these advanced systems. (Ji Zhao, CEO)
Q: Can you provide an update on the USB4 sales contribution and competitive landscape?
A: USB4 has quickly become our #1 high-speed product line contributor. We offer a complete end-to-end product line, including solutions for notebooks and monitors. Our USB4 80 gigabit per second chip is being tested with key SoC and CPU suppliers, and we continue to expand our high-speed portfolio. (Ji Zhao, CEO)
Q: What are the expected synergies and financial impacts from the acquisition of Spectra7?
A: Spectra7's products, particularly in the data center ACC cable market, will enhance our offerings. We expect to leverage their unique technology to capture more market share. The financial impact is limited initially, but we anticipate growth opportunities as we integrate their assets with our sales and marketing resources. (Ji Zhao, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
