Earlier this month, fabless semiconductor company Himax Technologies (NASDAQ:HIMX) posted its second-quarter 2016 results, with revenue hitting $201 million. That was an increase of 18.8% year over year and at the high end of the company's guidance. Investors were pleased with those results and pushed the stock price up after earnings were released.
But there's more to a company than just the headline numbers. Here are three key points Himax's management highlighted during its latest earnings call with analysts.
1. Revenue growth in all of its business segments
According to Himax Technologies President and CEO Jordan Wu, "The sequential growth was due mostly to strong sales in small and medium-sized driver IC, mainly increased order flow from our Chinese smartphone customer base and their demand for higher resolution display drivers."
Here's how the revenue broke down over the second quarter:
- Revenue from large-panel display drivers was $67.5 million, up 24.4% year over year. This contributed 33.6% of the company's total revenue and 4K TV demand in China brought most of the growth.
- Small- and medium-sized drivers brought in $90.6 million, up 9.4% from a year ago. This accounted for 45% of total revenue, with most of the sales coming from smartphones.
- Revenues from the non-driver businesses came in at $43 million, up 33.6% year over year. That accounted for 21.4% of total revenue.
2. Augmented reality is of particular interest
Wu made sure to highlight the "staggering success" of Pokemon Go (with 100 million app downloads and 20 million active users) and then pivoted into a larger discussion about augmented reality's trajectory and how Himax will benefit.
"Thanks to the viral popularity of Pokemon Go, AR is now getting the attention and consumer validation that we, at Himax, have always known to be possible." But he said that the app's technology is primitive and that the technology its customers are developing will be much more sophisticated.
Wu said his company is in a unique position to benefit from AR because it's been investing in related technologies for 15 years, is the "provider of choice" for microdisplay and related optics for AR, and already has more than 30 customers creating AR devices.
In the short term, Wu said recent AR growth will push up revenues from the company's LCOS and WLO technologies in the second half of this year. And he added that, "We believe this is just the beginning of a very long-term growth story."
3. These trends should continue through the rest of the year
Himax's management pointed to China's adoption of new TV technology and AMOLED smartphone displays as two things that will continue to bring growth to the company this year.
"In addition to benefiting from our leading market share in China and in 4K TV, we are also leading the charge in new technology areas such as 8K TV by working with our Chinese and Korean panel customers," Wu said on the call.
He added later that Himax Technologies' customers are increasingly using AMOLED displays in their smartphones and that the company is grabbing more integrated circuit (IC) design-ins for displays. As Wu said on that call, "We believe that AMOLED driver IC will kick off a new growth cycle for our small panel driver IC business starting 2017."
Himax Technologies is growing revenue across all of its segments and has plenty of room for more growth in augmented reality and new display technologies. With all of this, it appears Himax and its investors have some bright days ahead.