HTC reports 2015 first quarter results

Taipei, Taiwan – April 29, 2015 – HTC Corporation (TWSE: 2498), a global leader in mobile innovation and design, today announced consolidated results for its fiscal 2015 first quarter ended March 31, 2015. Key figures:

• Quarterly revenue of NT$41.5 billion, up 25% y-o-y
• Quarterly net profit after tax of NT$0.36 billion, or NT$0.43 per share
• Gross margin of 19.7% and operating margin of 0.05%

HTC turned in another profitable quarter for the first three months of 2015, with year-on-year revenue up 25% on the same period in 2014, at NT$41.5 billion. Earnings per share has also rebounded since Q1’14, to NT$0.43.

Tailored portfolios for individual markets and targeted marketing efforts have enabled HTC to sustain growth in Q1’15 and expand its geographical reach. The US saw the strongest growth since 2011, while markets in Europe and the Middle East showed continued momentum for both the flagship HTC One and HTC Desire families. Highlights in Asia include market share gains in Taiwan, with penetration well into the mid-end segment on top of sustained momentum at the high end, and also in India within the target segment.

The flagship HTC One M9 was unveiled at Mobile World Congress to wide acclaim and distributor support, while the HTC One M9+ with a larger screen was introduced into specific emerging markets in early April. MWC was also the venue for HTC to launch its first foray into the health and fitness market with the HTC Grip™ high performance fitness tracker; this is the first product of our partnership with Under Armour, a leading sports brand, aimed at empowering athletes and promoting a healthy lifestyle. In addition, HTC announced a partnership with Valve in the development of the most advanced and immersive virtual reality platform, HTC Vive™, which received an overwhelming response at the show and earned many award honours. Grip and Vive represent the next steps in HTC’s diversification into the connected lifestyle space, a strategy that leverages HTC’s key strengths in premium design and technology integration to extend HTC’s consumer reach into new product areas and revenue streams.

In recognition of the strategic importance of connected smart devices to HTC’s future, the HTC Board of Directors agreed a change of corporate governance toward the end of Q1’15, appointing Cher Wang, Chairwoman and co-founder of HTC, as Chief Executive Officer. Peter Chou was appointed head of HTC Future Labs, a move that will enable him to focus on the new product areas that will help drive new revenue streams and broader brand penetration for HTC going forward.

“We have continued to raise our game over the last few months, and the Q1 results reflect the hard work we have put in to consolidating our processes and operations, while enhancing our core focus of superlative design and technology for the mobile lifestyle,” said Cher Wang, Chairwoman and CEO of HTC. “More important, we have made strides in expanding our product offerings into new connected smart devices in areas such as fitness and entertainment. Just as HTC pioneered the smartphone market, it is vital that we drive the connected lifestyle through our pursuit of brilliance and by engaging strategic partners to bring the best and most innovative products to market.”

HTC garnered numerous awards in Q1’15, and especially during Mobile World Congress, with all three announced products finding favour among media and consumers alike. The HTC One M9 received editor’s choice and top rating stamp awards from numerous publications across the world, and was ranked among the best product or smartphone at MWC 2015 by Yahoo! Tech, PC Mag, Engadget and Pocket Lint. The HTC Grip earned Best Fitness Wearable by both Chip Chick and TechnoBuffalo, while HTC Vive attracted many ‘Best in Show’ awards, including from TechRadar, Gizmodo, Digital Trends, Mashable, Tom’s Guide, and Ubergizmo.

2Q 2015 Outlook

HTC is providing the following guidance for this quarter:

• Revenue is expected to be in the range of NT$NT$46 billion to NT$51 billion
• Gross profit margin is expected to be 23% to 23.5%
• EPS is expected to be in the range of NT$0.06 to NT$034