The transmission of AI computing power demand to end-user applications is clearly reflected in Montage Technology's latest financial results. On April 27, Montage Technology disclosed its first-quarter 2026 report, showing revenue of 1.461 billion yuan, a 19.51% year-over-year increase. Net profit attributable to shareholders reached 847 million yuan, surging 61.30% annually, while adjusted net profit excluding non-recurring items stood at 604 million yuan, up 20.14%. Multiple metrics including revenue, net profit, and sales of interconnect chips hit new quarterly records.
The profit growth significantly outpacing revenue growth was primarily driven by notable margin expansion. The company's overall gross margin reached 69.8% in the first quarter, increasing 9.3 percentage points from the same period last year. The gross margin for interconnect chips climbed to 71.5%, rising 7 percentage points year-over-year and 3.8 percentage points quarter-over-quarter. The improved profitability was mainly fueled by higher contribution from high-margin DDR5 next-generation RCD chips and new interconnect products.
Additionally, investment gains and fair value changes totaling 233 million yuan, representing a twelvefold increase year-over-year, provided substantial support to net profit. Excluding share-based compensation expenses of 100 million yuan (approximately 95 million yuan after tax), adjusted net profit reached 942 million yuan, up 56.7% year-over-year.
The core driver of the company's performance growth stems from robust industry demand fueled by AI trends. DDR5 adoption continues to accelerate with successive product generations, leading to significant growth in shipments of Montage's DDR5 RCD chips, particularly the third and fourth generations. Meanwhile, revenue from new interconnect products—including MRCD/MDB, PCIe Retimer, CKD, and CXL MXC chips—is rising rapidly.
By product line, interconnect chips generated sales of 1.417 billion yuan in the first quarter, up 24.4% year-over-year. Revenue from the four new products collectively reached 269 million yuan, surging 93.8% annually and accounting for 19.0% of interconnect chip revenue. The Jintide product line reported revenue of 42 million yuan, down 48.2% year-over-year.
R&D spending increased 22.9% to 188 million yuan, accounting for 12.88% of revenue, up 0.36 percentage points from a year earlier. Sustained R&D investment remains crucial for maintaining generational competitiveness in chip products. Share-based compensation expenses totaled 100 million yuan, reducing net profit by approximately 95 million yuan after tax, mainly tied to core talent incentive programs. Administrative expenses rose 25.1% to 127 million yuan. On the financial front, the appreciation of the renminbi against the U.S. dollar resulted in exchange losses of 83 million yuan from H-share fundraising, compared to just 1 million yuan in the same period last year. The company has initiated partial foreign exchange settlement operations to hedge against future currency volatility.
The most notable change on the balance sheet was the completion of the H-share listing. In February 2026, Montage Technology listed on the Hong Kong Stock Exchange, issuing 75.77 million shares including over-allotment options and raising over 7.1 billion yuan. Cash and cash equivalents surged from 8.48 billion yuan at the beginning of the year to 14.62 billion yuan, while financial assets increased from 820 million yuan to 2.13 billion yuan. Total current assets expanded to 18.59 billion yuan.
Share capital grew from 11.46 billion yuan to 12.22 billion yuan, and capital reserve jumped from 6.11 billion yuan to 13.19 billion yuan. Equity attributable to shareholders increased 61.3% to 20.85 billion yuan. The strengthened capital base supports ongoing R&D, capacity planning, and potential strategic collaborations in the AI chip sector. Total liabilities remained low at 905 million yuan, with a debt-to-asset ratio of approximately 4.2%, reflecting a highly stable financial structure. Long-term borrowing increased by 48.82 million yuan during the quarter, but overall leverage remains minimal.
Comments