Pegatron Corp. reported its lowest quarterly profit in 13 years in the second quarter of 2025, as foreign exchange losses and seasonal downturns severely affected its earnings. Net income after tax dropped by over 90%, highlighting challenges despite strategic investments in AI servers and the automotive sectors.
Currency headwinds crush profitability
In the second quarter of 2025, Pegatron's revenue reached NT$267.33 billion (approximately US$8.9 billion), marking a 1.9% decline from the previous quarter but a 5.4% increase compared to the same period in 2024. Operating profit, however, fell sharply to NT$1.471 billion, down 40.8% from the NT$2.48 billion recorded in the previous quarter, and nearly halved year-over-year.
Traditionally a slower quarter for the company, the second quarter of 2025 was further impacted by a significant appreciation of the New Taiwan dollar, which surged over 10% since April 2025, resulting in exchange losses of NT$1.086 billion. This currency fluctuation reduced the gross margin to 3.1%, a decline of 0.6% sequentially and about 1.5% annually.
Mixed signals across business segments
Net income after tax plummeted from NT$4.3 billion in the first quarter of 2025 to NT$287 million in the second quarter of 2025, representing over a 90% decrease on both a quarterly and yearly basis. For the first half of 2025, Pegatron posted cumulative revenue of NT$539.769 billion, gross profit of NT$18.542 billion, and operating profit totaling NT$3.953 billion. Pre-tax net income amounted to NT$8.4 billion, with net income attributable to shareholders at NT$4.59 billion.
Segment analysis revealed that Pegatron's information technology and consumer electronics lines experienced revenue growth during the quarter, while the communications segment suffered an 8% quarterly decline. This drop was attributed to shifts in product mix and reductions in average selling prices.
Recovery hopes hinge on seasonal upturn
Despite Pegatron's ongoing business transformation efforts, particularly in AI and automotive sectors, these new areas currently contribute only limited revenue. The company's ability to capitalize on the upcoming strong demand season in the second half of 2025 will be critical to reversing its downward profit trend. New product launches in communications and the traditional peak season for consumer electronics are expected to support a potential recovery in the third quarter of 2025.
Article edited by Jerry Chen
