ASE Technology (ASX) Q3 2024 earnings summary

Executive summary

• Third quarter 2024 net revenues reached NT$160,105 million, up 14% sequentially and 3.9%-4% year-over-year, exceeding expectations due to strength in leading-edge advanced packaging and seasonal ramps in communications devices.

• Net income attributable to shareholders was NT$9,666 million, up 24% quarter-over-quarter and 10% year-over-year.

• Basic EPS was NT$2.24, a 24% increase from Q2 2024 and 10% higher than Q3 2023.

• Equipment utilization was 65%-70% for both packaging and testing, with EMS demand slightly ahead of expectations due to earlier seasonality.

Financial highlights

• Gross profit for Q3 2024 was NT$26,432 million with a gross margin of 16.5%, up 0.1 percentage points sequentially and 0.3 points year-over-year.

• Operating profit reached NT$11,476 million, up TWD 2.5 billion sequentially and TWD 0.1 billion year-over-year, with an operating margin of 7.2%.

• Net non-operating gain was NT$784 million, mainly from FX hedging and profits from associates.

• EBITDA for the quarter was NT$28,621 million.

• Excluding PPA expenses, net income attributable to shareholders was NT$10,835 million and basic EPS was NT$2.51.

Outlook and guidance

• Leading-edge advanced packaging revenues expected to more than double in 2025, with over 10% of ATM revenue from leading-edge next year.

• ATM Q4 revenues projected to grow slightly quarter-over-quarter, with gross margin flattish.

• EMS Q4 revenues expected to decline mid-single digit quarter-over-quarter, with operating margin down 1 percentage point.

• Margin improvement for next year expected to be back-end loaded due to front-end loaded investments.