Silicon Motion's audited profit halved on 131% revenue growth, and an automated alert called it a miss
Silicon Motion's operating business doubled its margin while a $152.7 million investment swing halved the audited profit, and two alerts read the same quarter as a miss and a beat. The call this morning is where the portfolio, the unnamed dispute and the conversion price get answered.
Richard Tang · 2 min read
Silicon Motion reported after the close on October 28, so today is the first full session on the numbers and the earnings call is at 8 a.m 12. Eastern: revenue up 131% year on year to $560.2 million, and audited profit down 52% to $65.3 million 12.
The shares rose 7.6% anyway, and the two market-facing alerts disagreed on what the quarter was 34. MarketBeat's automated alert held the $1.91 GAAP earnings figure against a $3.30 non-GAAP consensus and called an earnings miss; Investing.com's wire called a beat of $1.05 per ADS 34. Both compared numbers that describe different quarters.
The gap between the two earnings figures is one line
The reconciliation is one line. In the second quarter, Silicon Motion+5.41% — Silicon Motion, up 5.41 percent today booked a $74.7 million gain on its investment portfolio; in the third, it booked a $78.0 million loss on the same line, a $152.7 million swing sitting below operating income 12.
Operating income itself rose to $162.6 million 12. Strip out those marks along with stock compensation and an unnamed "dispute-related expense," and earnings jump to $4.35 per ADS 12. Leave them in, and the audited profit halved on 24% revenue growth 12. The alerts printed a miss and a beat, and neither explained the swing. Securities.io did print the two investment lines; that reconciliation is the story.
One quarter, two profits: GAAP halved while the adjusted figure rose
- GAAP net income
- Non-GAAP net income
Data
| GAAP net income | Non-GAAP net income | |
|---|---|---|
| Q2 2026 | 136.1 | 83.1 |
| Q3 2026 | 65.3 | 149.2 |
The operating business underneath is genuinely strong
Non-GAAP operating margin doubled year on year to 32.1%, Ferri and boot drive sales rose roughly 2,580% from a year earlier, and the company guides fourth-quarter revenue of $588 million to $616 million on NAND makers pulling supply out of phones and PCs to feed AI storage 12. Silicon Motion, which supplies more SSD controllers than anyone, is positioned to collect on that shift 1.
But read the cash before the momentum decides for you. The quarter's cash rose from $182 million to $954 million mostly because of $1.1 billion of 0% convertible notes due 2031, not operations 1. Operating cash flow was negative $256 million as inventories grew to $871 million 1.
Three questions the call should be pressed on
And the fourth-quarter guide excludes what the release defines only as "legal, consulting, and other fees and resolution costs related to the dispute," referring to "the dispute" without ever saying what it is 1. That, the contents of the investment portfolio that cost $78 million this quarter, and the converts' omitted conversion price are the three things the 8 a.m. call should be pressed on 1. For a holder, the two figures decide the trade together: buy the operating momentum if the marks and the dispute are one-offs, trim if either recurs.
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