Amkor Technology (AMKR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $1.46 billion, up 7% sequentially and flat year-over-year, with EPS of $0.27, in line with guidance and expectations.

• Growth was driven by advanced packaging, especially for premium smartphones and 2.5D technology for AI; communications and computing end markets showed strength.

• Automotive, industrial, and consumer segments faced soft demand and inventory corrections, with communications up 10% sequentially and Android up 20% year-over-year.

• The company is preparing to deliver advanced SiP modules from its Vietnam Facility in Q3 2024 and progressing on an advanced packaging and test facility in Arizona, supported by a preliminary $400 million CHIPS Act agreement.

• Extended useful life of test equipment from five to seven years, reducing Q2 depreciation by $15 million and increasing net income by $13 million, EPS by $0.05.

Financial highlights

• Q2 2024 gross profit was $212 million with a gross margin of 14.5%, up from 12.8% year-over-year, aided by cost efficiencies and FX.

• Q2 2024 operating income was $82 million (5.6% margin); net income was $67 million (4.6% margin); EBITDA was $247 million (16.9% margin).

• Cash and short-term investments at quarter end were $1.5 billion; total liquidity $2.2 billion; total debt $1.1 billion (debt/EBITDA ratio 1x).

• Free cash flow for the first half of 2024 was $134.8 million, down from $146.0 million in the prior year.

• Quarterly dividend of $0.07875 per share was paid on June 24, 2024.

Outlook and guidance

• Q3 2024 revenue guidance is $1.785 billion to $1.885 billion, up 26% sequentially, driven by advanced SiP for smartphones, new wearables, and strong HPC/ARM-based PC demand.

• Q3 2024 gross margin expected between 14% and 16%, with operating expenses around $125 million.

• Q3 2024 net income projected at $105 million to $140 million, EPS $0.42–$0.56, over 80% higher than Q2.

• Full-year 2024 CapEx forecast remains $750 million, focused on advanced packaging and facility expansion.

• Management expects to continue paying quarterly cash dividends, subject to board discretion and financial conditions.