Delta Electronics 2Q26 Preview: Margins and the 800V Ramp Decide a Quarter Whose Record Revenue Is Already Filed

Key Takeaways

Company snapshot

Delta Electronics is the world's largest maker of switching power supplies and a leading supplier of data-center power systems, thermal management, and liquid cooling. From its Taipei base it runs four businesses: power electronics, infrastructure for data centers and energy systems, e-mobility, and industrial automation. AI products are the main growth driver, at about 30% of power-supply segment revenue in 1Q26, up from 23% in 2025. Delta manufactures across Taiwan, China, Thailand, India, and the United States, and is listed in Taipei (2308 TT).

Expectations snapshot

The table sets what is already reported, the qualitative frame management gave with first-quarter results in April, and where the street and our model sit for the full year. Delta does not issue numerical quarterly guidance, so the 2Q26 column carries reported data and management's April commentary.

Source: Taiwan MOPS filings, company commentary, Bloomberg consensus; Zero One Investment Research.

Recent developments

First-quarter results on 29 April set a high base. Delta's 1Q26 announcement put revenue at NT$159.4bn, up 36% YoY, with gross margin at a record 37.0%, up from 34.6% in 4Q25, and operating margin at a record 17.8%. Net profit doubled, up 101% YoY to NT$20.55bn, for EPS of NT$7.91 (company 1Q26 results announcement, 29 Apr). Management said on the results call that about 0.7 percentage points of the gross margin came from a one-time customer order-cancellation penalty (call coverage: BigGo Finance, 30 Apr).

Management framed 2026 demand around cloud capex. On the April call, the company cited combined capital spending by the four major cloud service providers rising from about US$410bn in 2025 to US$670bn in 2026, and said factory expansion must accelerate, targeting investment growth of more than 10% over 2025's NT$46.1bn across Taiwan, China, Thailand, India, and the US (earnings-call coverage, 30 Apr).

The monthly prints then accelerated. June revenue of NT$65.6bn rose 55% YoY, the first month above NT$60bn, with power supplies and components at 50% of revenue and infrastructure at 37% (company release; Taiwan News, 10 Jul; Digitimes, 9 Jul). Delta has also been pushing its 800V high-voltage DC power systems as AI rack power approaches megawatt levels, positioning against data-center incumbents such as Vertiv (Digitimes, 4 Jun; CommonWealth Magazine, 21 Jun).

The shares did not follow the revenue. Delta fell about 9% on 17 July as the Taiex posted its largest single-day point drop on record, part of a market-wide AI pullback that followed TSMC's lower margin guidance for the next quarter (Focus Taiwan, 17 Jul). Sell-side ratings held through the fall: 18 of 19 covering analysts rate the stock a buy (Investing.com, 25 Jul).

How the quarter is tracking

All three months of the quarter are filed, and each grew more than 40% YoY. The quarter's NT$183.3bn total is up 15% QoQ and 48% YoY, and it widened the growth gap over 2025: full-year 2025 revenue grew 32%, the first half of 2026 is growing 41%.

Source: Taiwan MOPS monthly filings; Zero One Investment Research.

Source: Company disclosures, Taiwan MOPS monthly filings, Zero One Investment Research

The June filing carried a disclosure note attributing the jump to strong demand for AI-related products, the second such note in ten months. One nuance sits inside the record: local analyst projections after the April results ran near 20% QoQ growth for the quarter (MoneyDJ, 5 May), and the filed 15% is below that mark. With the revenue settled, the open items in the release are the margins on that revenue and the profit that falls out of it.

What the company guided and where our numbers sit

Delta's guidance is directional. The April frame: gross margin should stay better than last year's as the AI mix rises, but room for further upside from the record 37.0% is limited; capital spending grows more than 10% from 2025's NT$46.1bn, which puts 2026 above NT$50.7bn; ±400V high-voltage DC products begin small-volume shipments in the second half of 2026, with 800V volume meaningful primarily in 2027 (earnings-call coverage, 30 Apr).

The street expects FY2026E revenue of NT$768.9bn, up 39% YoY, with net profit of NT$106.8bn (Bloomberg consensus). First-half revenue of NT$342.6bn covers 45% of that full-year number, and the implied second half of NT$426.3bn requires 37% YoY growth, a step down from the first half's 41%. The implied half-on-half build of 24% is also smaller than the 28% Delta delivered in 2025, so the release does not need a further acceleration to keep the year on track.

Our model carries FY2026E revenue of NT$741.7bn and net profit of NT$100.9bn. Revenue is tracking ahead of those numbers: the first half already covers 46% of the full-year figure in what is seasonally the smaller half of Delta's year. A release in line with the ranges below would put upward pressure on our FY2026E numbers.

Source: Company disclosures, Bloomberg consensus, Zero One Investment Research

What to expect from the release

We expect the release to confirm the record revenue and shift attention to margins. The mix argues for strength: power supplies were half of June revenue, and AI products carry a rising share of that segment. Against that, the volume ramp of new capacity and management's own caution that upside from 37.0% is limited argue for a flat to slightly lower gross margin QoQ. Our arithmetic: at a 36-37% gross margin, with operating expenses holding near the first quarter's 19% of revenue, 2Q26 operating profit lands at NT$31-33bn, a record even at the bottom of the range, against NT$28.4bn in 1Q26. Applying the first quarter's ratio of net profit to operating profit, that points to net profit of roughly NT$22-24bn, up from NT$20.55bn in 1Q26.

Source: Company disclosures, Zero One Investment Research

At the meeting, we expect an updated read on cloud capex and the first shipment detail on the ±400V products due in the second half. Capital spending is the number most likely to move: April's frame of more than NT$50.7bn was set before the June acceleration, and the company has said expansion must speed up. A higher capex figure would read as confirmation of demand visibility.

What investors should watch

1. Second-quarter gross margin against the 37.0% record in 1Q26, remembering that the first quarter carried about 0.7 percentage points of one-time penalty income; and whether operating margin holds near 17.8%.
2. The AI share of power-supply segment revenue, which reached about 30% in 1Q26 from 23% in 2025, and the power segment's share of total revenue, 50% in June.
3. Confirmation that ±400V high-voltage DC shipments begin in the second half, and any change to the language that 800V volume becomes meaningful primarily in 2027.
4. The 2026 capital spending figure against the April frame of more than 10% growth on NT$46.1bn, and where the additions land, particularly US and India capacity.
5. Management's second-half order visibility against the roughly NT$426bn the street's full-year number implies, and whether the cloud-capex frame of US$670bn for 2026 gets raised.

Valuation

At NT$1,735 the shares trade at about 42x the street's FY2026E earnings and 34x forward EV/EBITDA. Vertiv, the closest AI data-center power and cooling comparable, trades at 45x forward earnings; Eaton, the diversified power-management major, at 30x; Lite-On, the nearest Taiwan power-supply peer, at 24x. The three-peer median of 30x sits below Delta, but those peers grow far slower than Delta's 48% second quarter, so the multiples are not directly comparable.

On the street's FY2027E earnings the multiple falls to about 26x, which is where the 800V ramp matters: that year carries 40% revenue growth in consensus. The embedded earnings growth is larger, with consensus net profit up 60%, which requires net margin to climb toward 16% from the 13.9% the street carries for FY2026E. Management's margin caution was aimed at the gross line; the consensus path leans on operating leverage continuing, as it did in 1Q26 when operating margin set a record. The July selloff has taken the FY2026E multiple from roughly 60x to 42x, so the meeting arrives with expectations already marked down. The condition that would change the valuation case is the margin line: if gross margin holds near 37% while revenue compounds at these rates, the FY2027E multiple compresses quickly; if margins step back toward 2025's 34.3%, the premium to Eaton becomes harder to defend.

Source: FMP market data and consensus estimates; Zero One Investment Research. Forward = FY2026E. P/BV omitted (not a relevant metric for capital-intensive hardware). Schneider Electric, ABB, Sungrow, and Chicony Power omitted on unsupported or defective vendor data.