Silicon Motion Technology Corporation

Non-GAAP Q2 revenue was a record $451 million, up 32% sequentially and 127% year over year, versus guidance of $393 million-$411 million. Gross margin was 50.2%, above the guided 48.5%-49.5% range, and operating margin was 23.1% versus guidance of 21%-22%; EPS per ADS was $2.43. Cash, cash equivalents and restricted cash were $181.8 million at quarter-end, down from $210.9 million in Q1, mainly due to $16.9 million of dividend payments and higher inventories. For Q3 2026, revenue is guided to $519 million-$541 million, up 15%-20% sequentially, gross margin to 50%-51%, operating margin to 27.5%-28.5%, effective tax rate to 22%, and stock-based compensation plus dispute-related expenses to $14.9 million-$15.9 million. Management said 2026 revenue is expected to more than double and the company is on track for record revenue, with operating margins expected to exceed 30% exiting the year.

Wallace Kou framed the quarter as evidence that Silicon Motion is transforming from a NAND controller supplier into a more diversified storage-solution company spanning AI infrastructure to the edge. He emphasized strong market-share gains in embedded, the early commercial ramp of MonTitan, and rapid growth in Ferri and Boot Drive, while saying the company is better positioned than ever despite a difficult NAND environment. His tone was confident and upbeat, repeatedly describing 2026 as the start of sustained growth and saying the company is still in the “early inning” of the transformation.

Jason Tsai said the quarter outperformed expectations across the board, with revenue, gross margin, operating margin, and EPS all above guidance. He noted operating expenses rose to $122.1 million due to new controller and solution development, tape-out-related costs, and higher headcount, while cash declined to $181.8 million because of dividends and inventory growth. On the outlook side, he guided Q3 revenue to $519 million-$541 million, gross margin to 50%-51%, operating margin to 27.5%-28.5%, and said the back half should benefit from MonTitan and PCIe 5 mix, even as the company keeps investing in R&D.

Analysts pressed for more detail on the revenue mix between Ferri and enterprise Boot Drive, but management refused to provide that granularity and said growth is coming from both categories. Questions on MonTitan focused on whether it can still reach a 5%-10% revenue mix exiting 2026 and the timing of TLC versus QLC ramps; Jason said the company is still on track, with TLC contributing first and QLC not becoming meaningful until late 2027 into 2028 as 2-terabit dies become more available. Management also said the delays in QLC are an industry NAND-availability issue, not a controller issue, and that the company already has controllers ready.