Benchmark Electronics (BHE) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $666 million, exceeding guidance but down 9% year-over-year, with strong A&D and SemiCap performance offsetting declines in Medical, AC&C, and Industrials.

• Non-GAAP EPS was $0.57 (above guidance); GAAP EPS was $0.43; net income was $15.5 million, driven by improved margins and cost controls.

• Non-GAAP gross margin was 10.2% for the sixth consecutive quarter; non-GAAP operating margin reached 5.1%, both up year-over-year.

• Free cash flow was $47 million in Q2, with over $230 million generated in the last four quarters; inventory reduced by $38 million sequentially and $157 million year-over-year.

• Board approved a dividend increase to $0.17 per share, effective immediately.

Financial highlights

• Net sales were $666 million, down 1% sequentially and 9% year-over-year.

• GAAP and non-GAAP gross margin were both 10.2%, up from 9.1% year-over-year.

• GAAP operating margin was 4.1% (up 80 bps YoY); non-GAAP operating margin was 5.1% (up 60 bps YoY).

• Free cash flow was $47 million in Q2; cash balance at quarter end was $310 million.

• Cash conversion cycle improved to 90 days from 94 in Q1; inventory days decreased to 90 from 94 sequentially.

Outlook and guidance

• Q3 2024 revenue expected between $630 million and $670 million.

• Non-GAAP gross margin expected to remain around 10%; non-GAAP operating margin between 4.8% and 5%.

• Non-GAAP EPS guidance for Q3 is $0.52–$0.58; GAAP EPS: $0.36–$0.42.

• Full-year 2024 free cash flow estimate raised to over $120 million.

• Effective tax rate for 2024 expected at 22%–24%.