Alchip Technologies (3661) Q4 2024 earnings summary

Executive summary

• 2024 revenue reached TWD 1.62 billion (US$1,618.4 million), up 70% year-over-year, with net income of TWD 201 million (US$200.8 million) and EPS of TWD 81.3, all record highs.

• Over 90% of revenue derived from HPC and AI applications, with significant design wins in advanced nodes and ADAS market penetration.

• North America accounted for 86% of 2024 revenue, reflecting a strategic shift away from China, which now represents only 10%.

• Major customer concentration: Customer A contributed 60% of 2024 revenue.

• Company expects a 10%-20% year-over-year revenue decline in 2025 due to product transitions and customer delays, but gross margin is projected to improve.

Financial highlights

• Q4 2024 revenue was TWD 404 million, up 39% year-over-year but down 12% sequentially; net income reached TWD 57 million, with EPS of TWD 23.

• Full-year 2024 operating income was TWD 202.3 million (US$202.3 million), up 67.6% year-over-year; net income grew 88.4% year-over-year.

• Q4 gross margin improved due to a favorable revenue mix, with higher-margin NRE and production contributions.

• Basic EPS increased to NT$81.34 (US$2.53) from NT$45.47 (US$1.46) year-over-year.

• Cash and cash equivalents at year-end 2024 were NT$27,044.2 million (US$824.9 million), up from NT$10,159.6 million (US$330.9 million) in 2023.

Outlook and guidance

• 2025 revenue expected to decline 10%-20% year-over-year, mainly from the phase-out of 7nm AI accelerators and delayed ADAS revenue.

• Gross margin is expected to improve in 2025, driven by higher NRE revenue and better production margins.

• Long-term outlook projects a 40%-50% CAGR through 2027, supported by strong AI and HPC demand and advanced node migration.

• The board proposed a 2024 cash dividend of NT$40.05 per share (US$1.221), pending shareholder approval.

• The company expects continued capital expenditure for machinery and SIP to support growth.