Magnachip Semiconductor (MX) Q2 2024 earnings summary

Executive summary

• Q2 2024 consolidated revenue was $53.2 million, up 8.4% sequentially but down 12.8% year-over-year, surpassing guidance midpoint, with both MSS and PAS segments showing sequential growth.

• Gross profit margin reached 21.8%, above guidance and up 3.5 percentage points sequentially, but down from 22.2% in Q2 2023.

• Net loss was $13.0 million, narrowed from Q1 but widened from $3.9 million in Q2 2023, mainly due to higher foreign currency losses and R&D expenses.

• Company continued China-focused strategy, launching a new subsidiary and securing OLED driver purchase commitments for premium smartphone OEMs.

• Business line reorganization continued, with MSS and PAS operating as separate subsidiaries.

Financial highlights

• MSS Q2 revenue: $11.6 million, up 28.7% sequentially but down 6.2% year-over-year; PAS Q2 revenue: $39.2 million, up 7.4% sequentially and 0.6% year-over-year.

• Operating loss: $12.8 million; adjusted operating loss: $11.6 million; adjusted EBITDA loss: $7.6 million.

• GAAP diluted loss per share: $0.34; Non-GAAP: $0.21.

• Cash and equivalents at quarter-end: $132.5 million; short-term investments: $30 million.

• Repurchased 0.5 million shares for $2.3 million in Q2; 1.1 million shares for $6.4 million in H1 2024.

Outlook and guidance

• Q3 2024 revenue expected at $61.5M–$66.5M; MSS: $14.5M–$16.5M; PAS: $45.5M–$48.5M.

• Q3 gross margin guidance: 22.5%–24.5%; MSS: 36.5%–39.5%; PAS: 18.5%–20.5%.

• Full-year 2024: MSS and PAS revenues expected to grow double digits year-over-year; consolidated gross margin 19%–22%.

• Transitional foundry services revenue to phase out by year-end.

• Sufficient liquidity expected to fund operations and capital expenditures for the next 12 months.