Executive Summary

Q1 2025 was operationally soft: revenue was flat year over year (-0.4% to $16.25M) and down sequentially from Q4 as mix shifted further toward automotive; gross margin fell 200 bps to 52% and diluted EPS dropped to $0.12, primarily due to $2.1M of merger-related costs recorded in SG&A .
Automotive revenue grew 7% YoY to $13.38M (82% mix), while Security Surveillance declined 25% YoY to $2.87M (18% mix); China mix fell to 69% (from 75%) while Taiwan rose to 18% (from 15%) .
Non-GAAP results exclude stock comp and related tax: non-GAAP operating income was $2.34M and non-GAAP net income was $2.65M vs. GAAP $1.97M/$2.32M, highlighting the impact of transaction expenses on GAAP EPS .
Balance sheet remains strong: cash and cash equivalents rose to $70.1M; $4.7M dividend paid in Q1; customer concentration moderated (Customer A 28% of revenue vs. 37% in Q1’24) .
Strategic catalyst: signed definitive agreement to be acquired by ASMedia for $20.00 per share in cash; stockholder approval obtained May 2, 2025; closing expected in Q2 or early Q3 2025, pending regulatory approvals (CFIUS, Taiwan MOEA) .

What Went Well and What Went Wrong

What Went Well
- Automotive growth and mix shift: Automotive revenue rose to $13.38M (82% of total), up 7% YoY on higher volumes despite lower ASPs; management continues to secure design wins in automotive camera applications .
- Cash generation and liquidity: Cash ended at $70.1M; operating cash flow was $2.24M despite transaction costs; short-term investments were fully matured by quarter-end .
- Concentration risk moderated: Customer A concentration declined to 28% (from 37% YoY), reducing single-customer exposure; Hikvision’s share also fell to 10% from 16% YoY .
What Went Wrong
- Margin compression: Gross margin fell to 52% (from 54%) due to product mix/ASP shifts and higher reserve expenses; operating margin compressed to 12% vs. 26% in Q1’24 .
- Security Surveillance weakness: Segment revenue declined 25% YoY to $2.87M on lower volumes; management continues to flag macro/geopolitical and inventory adjustment headwinds in surveillance markets .
- Elevated non-recurring costs: $2.1M transaction-related expenses (legal $1.5M, advisory $0.6M) tied to the ASMedia merger weighed on GAAP profitability and EPS .

Financial Results

Consolidated results vs prior periods and (if available) estimates

Metric	Q1 2024	Q3 2024	Q4 2024 (derived)	Q1 2025	Consensus (Q1 2025)
Revenue ($M)	$16.31	$18.49	$19.04 (FY $70.61 − 9M $51.58)	$16.25	N/A – SPGI consensus unavailable
Gross Margin (%)	54%	53%	56.1% ((FY GP $37.98 − 9M GP $27.30)/$19.04)	52%	N/A
Operating Income ($M)	$4.19	$4.81	$5.81 (FY $19.08 − 9M $13.27)	$1.97	N/A
Operating Margin (%)	26%	26%	30.5% ($5.81/$19.04)	12%	N/A
Net Income ($M)	$4.38	$5.05	$5.41 (FY $19.18 − 9M $13.77)	$2.32	N/A
Diluted EPS ($)	$0.23	$0.27	~$0.28 (FY $1.01 − 9M $0.73)	$0.12	N/A

Notes:

Q4 2024 figures are derived from FY 2024 minus 9M 2024 (from Q3 2024 10-Q); EPS derived arithmetically from disclosed FY and 9M diluted EPS; quarterly diluted EPS derived this way can differ from company-reported quarterly EPS due to share weighting .
S&P Global consensus was unavailable for THPTF this quarter; no estimate comparisons shown.

Non-GAAP reconciliation (as disclosed)

Metric ($000s)	Q1 2024 GAAP	Adj: SBC	Adj: Taxes	Q1 2024 Non-GAAP	Q1 2025 GAAP	Adj: SBC	Adj: Taxes	Q1 2025 Non-GAAP
Income from operations	4,192	399	—	4,591	1,972	371	—	2,343
Net income	4,380	399	(47)	4,732	2,319	371	(43)	2,647

Segment revenue

Segment ($000s)	Q1 2024	Q3 2024	Q4 2024 (derived)	Q1 2025
Automotive	12,481	12,771	14,270 (FY $51,908 − 9M $37,638)	13,377
Security Surveillance	3,830	5,715	4,767 (FY $18,705 − 9M $13,938)	2,873

KPIs and mix metrics

KPI	Q1 2024	Q1 2025
Revenue by geography (%)	China 75%; Taiwan 15%; S. Korea 7%; Japan 1%; Other 2%	China 69%; Taiwan 18%; S. Korea 8%; Japan 3%; Other 2%
Customer concentration	Customer A 37%; Customer B 11%; End-Customer A 16%	Customer A 28%; Customer B 13%; Customer C 11%; End-Customer A 10%
Cash and cash equivalents ($M)	$11.76 (end Q1’24)	$70.10 (end Q1’25)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	FY 2025	$0.50 announced Dec 17, 2024 (two $0.25 installments)	First $0.25 paid Feb 14, 2025; second $0.25 anticipated in Q3 2025, subject to Board approval	Maintained (timing clarified)
Revenue, margins, OpEx, tax rate	FY 2025	Not provided	Not provided in Q1 2025 8-K/10-Q	—

Note: Q1 2025 filings did not include quantitative forward guidance beyond dividend policy; prior FY 2024 guidance was updated in Nov 2024, but no new 2025 revenue guidance was issued for Q1 2025 .

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript or press release was available in the document set; themes below reflect MD&A and prior filings.

Topic	Previous Mentions (Q3 2024 and FY 2024)	Current Period (Q1 2025)	Trend
Proposed Merger	N/A in Q3 2024; Merger announced Jan 15, 2025 (post-FY)	$20/share cash deal with ASMedia; stockholder approval received; closing targeted Q2/early Q3 2025 pending CFIUS/Taiwan approvals	New/major strategic development
Tariffs and trade	Ongoing macro/trade headwinds; FCC and CMIC references around Hikvision; mitigated direct impact expected	Noted new 2025 tariff actions raising uncertainty; potential cost impacts; extent/duration uncertain	Worsening uncertainty
Segment mix	Auto strength, surveillance softer; mix drove GM near 53%	Auto +7% YoY; surveillance −25% YoY; GM 52% on mix/reserves	Auto mix rising; surveillance headwinds persist
R&D execution	Elevated tape-out costs in Q3 2024	R&D down 14% YoY in Q1 on lower tape-outs; planning continued product investments	Normalizing spend after Q3 spike
Customer concentration	Customer A >40% in Q3; Hikvision notable end-customer	Customer A 28%, Hikvision 10% (down YoY)	Concentration moderating
Dividend policy	Target ~50% of annual non-GAAP net income; $0.50 per share for FY 2024 paid in two installments	First installment for FY 2025 program paid; second anticipated Q3, subject to board	Consistent capital return

Management Commentary

“Revenue decreased by $0.1 million, or 0.4%, … primarily attributable to a $1.0 million decrease in security surveillance revenue … partially offset by an increase in average selling prices. Automotive market revenue increased by $0.9 million due to an increase in the volume of shipments, partially offset by a decrease in average selling price.”
“Gross margins decreased to 52% … due to changes in product mix and average unit selling prices and higher reserve expenses.”
“During the three months ended March 31, 2025, we incurred $2.1 million of non-recurring transaction costs in connection with the Proposed Transaction. These costs primarily consisted of $1.5 million in legal fees and $0.6 million in investment banking advisory fees.”
“Our cash and cash equivalents as of March 31, 2025 were $70.1 million…we believe [they] will be sufficient to meet our anticipated cash needs for at least the next 12 months.”

Q&A Highlights

No earnings call transcript was available for Q1 2025; therefore, no Q&A highlights or clarifications could be sourced from a call transcript [ListDocuments returned none].

Estimates Context

Wall Street (S&P Global) consensus for Q1 2025 revenue and EPS was unavailable for THPTF at this time due to data mapping limitations; as a result, we cannot provide quantitative beat/miss analysis relative to consensus. Comparisons in this report are vs. prior periods and disclosed non-GAAP reconciliations [GetEstimates error].

Key Takeaways for Investors

Core operations: Mixed quarter—automotive resilience offset by surveillance weakness; gross margin pressure from mix and reserves; GAAP EPS impacted by non-recurring merger costs .
Cash strength and returns: $70.1M cash provides flexibility; dividend program continues with first $0.25 installment paid; second installment anticipated in Q3 subject to Board approval .
Strategic overlay: The $20/share all-cash ASMedia merger is the dominant stock catalyst near term; regulatory timelines (CFIUS, Taiwan) are the gating items for close in Q2/early Q3 .
Risk posture: Tariff/trade uncertainty, surveillance end-market softness, and customer/geographic concentration (still high exposure to China) remain watch items despite some moderation in concentration .
Modeling notes: Ex-transaction costs, non-GAAP profitability is stronger (non-GAAP net income $2.65M vs. GAAP $2.32M); security surveillance headwinds and gross margin sensitivity to mix likely persist near term .
Trendline: Sequentially softer vs a strong Q4; YoY flattish top-line with margin and EPS compression; monitor surveillance demand normalization and auto design-win ramps into 2H .

Sources

Q1 2025 Form 8-K (Item 2.02/7.01) with non-GAAP reconciliations .
Q1 2025 Form 10-Q (financial statements, MD&A, merger details, dividend timing) .
FY 2024 8-K (Tanshin) for annual results and dividend program .
Q3 2024 10-Q for 9M trends and segment/geography detail .

Techpoint, Inc. (THPTF)·Q1 2025 Earnings Summary