Faraday Technology (3035) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached NT$2,649 million, up 2.7% sequentially but down 9.2% year-over-year.

• Net income for Q2 2024 was NT$268 million, a 3.6% decrease from Q1 2024 and 30.8% lower year-over-year.

• Gross margin improved to 47.1% from 46.5% in Q1 2024 and 43.6% in Q2 2023.

• All three main product categories (IP, NRE, mass production) grew sequentially from Q1 2024.

• NRE revenue set a new quarterly record, driven by advanced process ASIC projects.

Financial highlights

• Operating income declined 18.9% sequentially and 38.9% year-over-year to NT$257 million.

• EPS was NT$1.00, down from NT$1.13 in Q1 2024 and NT$1.66 in Q2 2023.

• Non-operating items contributed NT$83 million, up 112.4% sequentially.

• Operating expenses increased 12.3% sequentially and 16.6% year-over-year, pressuring margins.

• Liabilities to equity ratio was 39.3%, down from 55.0% a year ago.

Segment performance

• IP revenue grew 4.8% sequentially and 0.7% year-over-year to NT$345 million.

• NRE revenue rose 2.9% sequentially and 32.0% year-over-year to NT$645 million, a record high.

• Mass production revenue increased 2.2% sequentially but fell 20.5% year-over-year to NT$1,659 million.

• Advanced process business saw total design win orders in H1 2024 surpassing all of 2023.

• NRE and MP revenue breakdowns show shifts in application and technology mix, with notable increases in NRE for industrial and communication applications.