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Earnings deep dive · Tier M memory & storage

ADATA Q2 2026 — 46% More Revenue, 4% More Operating Profit. Read the Incremental Dollar.

ADATA turned in the largest quarter in its history: revenue NT$38.143B (US$1.196B), up 46.15% QoQ and 197.43% YoY, net profit NT$10.768B (US$337.7M), EPS NT$32.39 (US$1.02), and a first half that beat all of 2025 with room left over. Every account filed it under the shortage. The shortage is real and it is not the finding. The finding is what the growth cost: gross margin fell from 55.69% to 42.11% — 13.58 points — and operating margin fell from 47.05% to 33.47%, also 13.58 points, to the basis point, because the operating expense ratio was 8.64% in both quarters. Opex did nothing. The entire decline is cost of goods. Run the increment and the quarter states itself: on NT$12.033B (US$377.3M) of additional revenue, ADATA kept about NT$1.521B (US$47.7M) of additional gross profit and roughly NT$481M (US$15.1M) of additional operating profit — 12.6 cents and 4.0 cents on the incremental dollar derived, against reported averages of 42.11% and 33.47%. That is not a company losing a shortage. It is a company that decided to convert allocation into volume and pay the cost layer for the privilege, while the profit it already banked sits in a NT$49.4B (US$1.549B) warehouse it has no plan to draw down. The tell for Q3 is not revenue — July alone printed NT$18.379B (US$576.3M), 44.6% above the Q2 monthly run rate. The tell is the mix inside it.
Published · Post-print analysis (Q2 2026 results and earnings call, ; H1 earnings distribution approved ; July monthly revenue disclosed ) · 3260.TWO · All figures New Taiwan dollars, converted at NT$31.889 = US$1 () · Committed analyst read — not advice · For analysts covering DRAM/NAND modules, memory distribution, and the Taiwan supply chain

The quarter, stated plainly

Spokesperson Lin Ming-Hui opened the call by saying revenue, operating profit, after-tax net profit and EPS had all set records again. They had. Q2 revenue was NT$38.143B (US$1.196B), up 46.15% on Q1's NT$26.110B (US$818.8M) and 197.43% on the year-ago quarter. After-tax net profit crossed NT$10B for the first time at NT$10.768B (US$337.7M), up more than tenfold YoY; profit attributable to the parent was NT$10.4B (US$326.1M). EPS NT$32.39 (US$1.02). First half: revenue NT$64.2B (US$2.013B), operating profit above NT$25.0B (US$784.0M), after-tax net NT$20.7B (US$649.1M), attributable net NT$19.94B (US$625.3M), EPS NT$62.46 (US$1.96) — more than six share capitals earned in six months against a NT$10 par value, and comfortably past the whole of FY2025's NT$53.04B (US$1.663B) of revenue and NT$7.29B (US$228.6M) of earnings.

The company also gave the inputs, which most module houses do not. Q2 contract prices rose 30–50% for DRAM and 60–70% for NAND Flash. Q3 is guided at 20–30% and 35–40% respectively, with revenue above Q2 and gross margin down again, though management says the step down will be gentler than Q2's. Product mix in Q2 was DRAM 61%, SSD 32%, memory cards and flash drives 5%, other 2%. By region, Asia 52%, the Americas 40%, other 8%.

So: a rising unit price, a rising revenue line, and a record profit. Three facts that agree with each other. The disagreement is one level down.

ADATA Technology 2Q26 Income Statement 2Q26 · quarter ended · consolidated, unaudited · NT$ in billions Revenue NT$38.14B +197.4% Y/Y NT$38.14B +197.4% Y/Y Net revenue DRAM modules, SSDs, memory cards and industrial storage Gross profit NT$16.06B 42.11% margin from 19.0% a year ago Cost of revenue (NT$22.08B) 57.9% of revenue Operating profit NT$12.77B 33.47% margin Operating expenses (NT$3.29B) Net profit NT$9.80B 25.70% margin Income tax (NT$2.96B) 21.6% of pre-tax profit R&D (NT$0.66B) 1.7% of revenue General & administrative (NT$1.83B) 4.8% of revenue Selling (NT$0.73B) 1.9% of revenue Expected credit loss, net of realized affiliate profit (NT$0.08B) NT$84M IFRS 9 impairment less NT$1M realized affiliate profit Source: ADATA 2Q26 consolidated financial statements, TWSE MOPS · chart: tkal.news
Where ADATA's 2Q26 revenue dollar went: 42.1% survives cost of goods, 33.5% survives operating expense, 25.7% lands as profit before non-operating income — a gross margin 13.6 points below the prior quarter's, bought with 46% more revenue. NT$38,143M − NT$22,082M = NT$16,061M gross profit from operations; less NT$3,296M of operating expense = NT$12,765M operating profit. Operating expenses as filed are R&D NT$656M, general & administrative NT$1,826M, selling NT$731M and NT$84M of expected credit loss, NT$3,297M in total; the chart nets the NT$1M of realized profit on affiliate sales — which the statement carries between gross profit from operations and gross profit — against the expected-credit-loss line so the flow foots. Non-operating income and expenses are a net inflow of NT$963M, an inflow below operating profit that a flow chart cannot draw against, so the chart shows profit excluding it: NT$12,765M − NT$2,961M = NT$9,804M; that plus NT$963M = NT$10,768M profit for the period, of which NT$10,402M is attributable to owners of the parent and NT$365M to non-controlling interests. Y/Y on revenue against NT$12,824M in 2Q25. Three months ended .

Two numbers that are the same number

Gross margin went from 55.69% in Q1 to 42.11% in Q2. Operating margin went from 47.05% to 33.47%. Subtract: gross margin fell 13.58 points and operating margin fell 13.58 points. The gap between the two lines — the operating expense ratio — was 8.64% in Q1 and 8.64% in Q2 derived.

That coincidence is worth more than it looks. Management flagged on the call that bonus accruals were rising with profit and that operating expenses would keep climbing with scale. They did climb — in absolute terms opex went from roughly NT$2.26B (US$70.7M) to roughly NT$3.30B (US$103.4M) derived. In ratio terms it moved not at all. Which means the operating line carried a 46% revenue increase without leaking a single basis point of leverage, and every point of margin the company lost, it lost at the cost of goods.

The tell is that this is a purchase-price problem, not an operating problem. ADATA buys DRAM and NAND from Korean, US and mainland Chinese makers, holds it, and sells modules. When contract prices step up faster than the inventory it is drawing down, the spread widens and the margin is spectacular — that was Q1 at 55.69%. When the cost layer catches up to the sell price, the spread narrows. Q2 is the first quarter of the catching-up, and the company said so directly: procurement costs have risen sharply against last year, and it deliberately supported channel partners on price through the soft April and May.

The incremental dollar

Averages hide transitions. Increments do not.

Q1 2026Q2 2026Change
RevenueNT$26.110BNT$38.143B+NT$12.033B
Gross profit derivedNT$14.541BNT$16.062B+NT$1.521B
Operating profit derivedNT$12.285BNT$12.766B+NT$0.481B
Gross margin55.69%42.11%−13.58pp
Operating margin47.05%33.47%−13.58pp
Opex ratio derived8.64%8.64%0.00pp
Incremental gross margin derivedNT$1.521B / NT$12.033B12.6%
Incremental operating margin derivedNT$0.481B / NT$12.033B4.0%

At NT$31.889 = US$1 (): revenue NT$26.110B / NT$38.143B = US$818.8M / US$1,196.1M, +US$377.3M · gross profit US$456.0M / US$503.7M, +US$47.7M · operating profit US$385.2M / US$400.3M, +US$15.1M.

Revenue grew 46.15%. Gross profit grew 10.5%. Operating profit grew 3.9%. Net profit grew about 8.0% on the prior quarter. The derived H1 operating profit of NT$25.05B (US$785.5M) lands on the company's own disclosed "above NT$25.0B," which is the check that the margin percentages and the revenue line are describing the same set of books.

Put that increment next to the maker side of the same quarter and the division of the cycle is legible. Nanya, which owns the fab, took 96.5% of its incremental revenue as incremental gross profit — flat bits, ASP up more than 60%, a depreciation base it had allowed to roll off. ADATA, which owns no fab, took 12.6%. Same island, same quarter, same contract steps. The rent belongs to whoever owns the wafer. Everyone downstream is renting the spread between what they paid and what they can charge, and that spread is a function of inventory vintage, which is a wasting asset by construction.

I want to be careful about what this does and does not say. It does not say the quarter was bad — NT$12.766B (US$400.3M) of operating profit in three months at a module house is extraordinary by any pre-2026 standard, and the 42.11% gross margin is still roughly triple where this business sat two years ago. It does not say the growth was a mistake; taking volume in a shortage buys allocation standing with suppliers going into a 2027 the company believes is tighter than 2026, and that is a real asset that does not appear on the balance sheet. What it says is narrower and harder: at the margin, in this quarter, ADATA was compensated four cents on the dollar for 46% more revenue, and if the second half is a volume story rather than a price story, that is the rate that governs it.

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The rest of this dive is for paid subscribers.

The headline numbers and the incremental-margin work are above. The 7 sections below carry the July mix shift, the balance-sheet mechanism, the peer read, the valuation, and the dated tests that decide it.

  • July was a record, and the mix inside it moved fifteen points
  • The warehouse is the position: NT$49.4B at 204 days, and no plan to cut
  • Why a company that earned NT$19.94B is raising capital
  • Three Taiwanese module houses, three different businesses
  • Valuation: 5.1× trailing, 3.3× on the half annualised
  • Positioning, and the constraint on it
  • Four dated things that settle it — and the bottom line
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