ASUS Q1’23 earnings report

Last Friday, ASUS (ASUSTEK) reported earnings for Q1 2023. The Taiwan-based company has sustained its worldwide market-leader position in motherboard and graphics card sales but acknowledged that net revenue declined 13% quarter-on-quarter and 20% year-on-year. It attributed some of that decline to overall market conditions. The company’s CFO, Nick Wu, noted that “the PC market as a whole declined by about 30% over this quarter year-over-year, so our revenue trend was actually better than that of the market as a whole”. Here are our five takeaways from ASUS Q1’23 Earnings Report.

Five highlights from ASUS Q1’23 earnings report

1. ASUS’ commitment to sustainability

Sustainability was one of the key themes throughout the earnings call. Samson Hu, the company’s CO-CEO, GM and Director mentioned several initiatives and products that sustainability was a key part of. Here are some of the areas where ASUS announced key ESG (Environmental, Social, and Governance) achievements:

  • Circular Economy: an 87% eco-friendly product mix, with components being manufactured from recycled materials or materials that are recyclable themselves;
  • Climate Action: the companies’ notebook PCs were reported as being 34% more energy efficient on average than Energy Star standards;
  • Responsible Manufacturing: ASUS highlighted that, since 2018, 100% of its key minerals have been sourced from qualified smelters;
  • Value Creation: the company shared that since 2008 it has given more than 20,000 computers to Non-Profit Organisations.

Mr Hu also highlighted the Zenbook S 13 as an example of the company’s commitment to sustainability, noting that the consumer laptop is carbon-neutral through a combination of a design that leverages circular economy manufacturing, and the purchase of high-quality carbon offset credits.

2. ASUS PC sales up, Component sales down

As far as a Q2 outlook was concerned, Mr Wu remarked that growth quarter-over-quarter for PCs was expected to be 20% while sales of components were likely going to decline by 5%. This forecast would mean ASUS would continue to display higher growth than the industry as a whole, with the decline in components being mostly due to seasonal demand dipping this time of the year. The company is betting that growth in the PC market will primarily come from the consumer and gaming segments as opposed to business-to-business.

3. Continued expansion into AI

ASUS does not want to be left behind on the AI train. Among several initiatives mentioned, the company announced it was launching a ChatGPT-like foundation model, a large language model optimised for traditional Chinese and a generative AI solution. It stated that all of those products would be announced at its annual conference at the ASUS AI Cloud Innovation Center on the 17th of May.

You might also be interested: China’s largest search engine Baidu is developing ChatGPT-style AI

4. Artificial Intelligence of Things (AIoT) and Healthcare

The company continues to make inroads in the highly lucrative tech healthcare vertical. For Q1’23, ASUS announced revenue growth of 45% year-on-year for its AIoT business segment and highlighted several wins including approval from the Taiwanese FDA for both its EndoAim AI Endoscopy System and the ASUS Blood Pressure App. Mr Hu also highlighted ASUS’ healthcare big data platform as being received positively across Asian markets.

5. ASUS is now a gaming company

S.Y. Hsu – Co-CEO, GM & Director – declared at one point that: “Currently, our gaming product revenue is now over 50% of our overall revenue. So we are now a gaming company.” He highlighted that the PC gaming segment had been growing in double-digits for ASUS every year.

Mr Hu then went on to highlight several success stories for the gaming division:

  • ASUS Gaming motherboard revenue growth reached 40% year-over-year;
  • According to uncited market research, ASUS now has a 50% market share in the high-end gaming laptop market. Mr Hu stated that both RTX 4080 and 4090 models were in a “leadership position”;
  • ROG peripherals recorded 30% growth in revenue with the average price growing by 8%;
  • It launched its first gaming handheld, the ROG Ally, which competes directly with Valve’s Steam Deck and, to some extent, the Nintendo Switch.

ASUS seems to have a fair amount of belief that the product will do well, with Mr Hu stating the company is “very confident” in the product and that it hopes to “become the leader in the gaming handheld segment”.

ASUS ROG Ally Gaming Handheld as mentioned in ASUS Q1'23 Earnings Report
ASUS ROG Ally Gaming Handheld

Those are our main takeaways from the ASUS Q1’23 earnings report. Subscribe to our weekly newsletter to be kept up to date every time a major tech company announces quarterly earnings.

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Ricardo Oliveira

Ricardo Oliveira is a Senior Director at TechFinitive, where he frequently collaborates with TechFinitive's editorial team to write and produce content. He's based in Sydney, Australia.