Shares of Diodes Incorporated (DIOD) experienced a significant surge in after-hours trading on Wednesday, February 11, 2026, climbing approximately 26% to reach around $78. The sharp upward movement followed the release of the company's preliminary fourth-quarter financial results and an optimistic forward-looking statement that exceeded typical seasonal expectations.
Financial Performance and Outlook
The semiconductor manufacturer reported unaudited fourth-quarter revenue of $391.6 million, representing a robust 15.4% increase compared to the $339.3 million recorded in the same period the previous year. On a GAAP basis, net income for the quarter was $10.2 million, or $0.22 per diluted share. The non-GAAP earnings per share, which adjusts for items such as acquisition-related expenses, came in at $0.34. The company also reported EBITDA of $41.9 million, equating to 10.7% of total revenue, and executed share repurchases totaling $23.8 million during the quarter.
Looking ahead to the first quarter, Chief Executive Gary Yu provided guidance for revenue of approximately $395 million, plus or minus 3%. He also projected a GAAP gross margin of about 31.5%, with a margin of error of 1%. Yu emphasized that this forecast is "significantly better than typical seasonality," indicating underlying strength in demand across the company's key end markets.
Long-Term Strategic Targets for 2028
In conjunction with the quarterly update, Diodes' management unveiled a new set of ambitious three-year financial targets. The company aims to achieve $2 billion in annual revenue by the year 2028. Concurrently, it is targeting a gross margin of at least 35% and non-GAAP earnings per share of $4.00 or higher. These goals represent a clear strategic roadmap intended to demonstrate the firm's growth potential to investors over the medium term.
The positive market reaction underscores a broader narrative within the analog and power semiconductor sector. Companies like Diodes, which have significant exposure to automotive, industrial, computing, and communications segments, are working to convince the investment community that current demand is stabilizing at a healthy level, rather than merely recovering from a cyclical downturn. Management's commentary on "above-seasonal" performance and improved order visibility across multiple markets has resonated strongly, particularly after a prolonged period of cautious industry forecasts.
However, the path forward is not without its challenges. CEO Gary Yu noted that the company remains focused on enhancing factory utilization and reducing what he termed "underloading costs"—the margin pressure that occurs when manufacturing facilities operate below full capacity, spreading fixed costs over a smaller number of units. Improving operational efficiency will be crucial to achieving the outlined margin targets.
Investors and analysts are advised that all reported figures are preliminary and unaudited. Final, audited results may differ when the company files its official Form 10-K annual report for the fiscal year ended December 31, 2025. Traders will now monitor whether the stock can maintain its post-earnings momentum as Wall Street analysts revise their financial models to incorporate the new 2028 targets and margin commentary. Market activity may also be influenced by the upcoming U.S. holiday, with the Nasdaq and NYSE scheduled to be closed on Monday, February 16, in observance of Presidents' Day.
