Magnachip Semiconductor (MX) Q3 2024 earnings summary

Executive summary

• Q3 2024 consolidated revenue reached $66.5 million, up 25% sequentially and 8.5% year-over-year, at the high end of guidance, with both MSS and PAS segments exceeding expectations.

• Gross profit margin was 23.3%, up from 21.8% in Q2 but slightly down from 23.6% in Q3 2023; standard product business margin was 24.4%.

• Operating loss was $11 million; adjusted operating loss narrowed to $9 million; net loss was $9.6 million, with adjusted EBITDA at negative $4.9 million.

• Cash and equivalents at quarter-end were $121.1 million, with $30 million in short-term investments; 0.5 million shares repurchased for $2.5 million.

• Broad-based growth in PAS and MSS segments, with strong demand in industrial, automotive, communication, consumer, and computing applications.

Financial highlights

• Q3 2024 revenue: $66.5 million (up 25% sequentially, up 8.5% year-over-year); MSS revenue: $16.4 million (up 41.8% sequentially, up 54.5% year-over-year); PAS revenue: $47.6 million (up 21.2% sequentially, up 16.1% year-over-year).

• Gross profit margin: 23.3%; MSS margin: 38.7%; PAS margin: 19.4%.

• Adjusted EBITDA: $(4.9) million; adjusted net loss per share: $(0.34); basic and diluted loss per share: $(0.26).

• Days sales outstanding improved to 40 days from 53 days in Q2; average days in inventory decreased to 65 from 76 in Q2.

• Ended Q3 with $121.1 million in cash and $30 million in short-term financial instruments.

Outlook and guidance

• Q4 2024 consolidated revenue expected between $59–$64 million; MSS: $15–$17 million, PAS: $42–$45 million; foundry services to be immaterial beyond Q4.

• Q4 gross margin guidance: consolidated 21.5%–23.5%; MSS 37.5%–40.5%; PAS 17%–19%.

• Double-digit year-over-year growth expected for both MSS and PAS for full year 2024; consolidated gross margin 21%–22%.

• Foundry services revenue to wind down by year-end, with capacity conversion to PAS products underway.

• Q1 2025 expected to be seasonally soft, with possible carryover effects from foundry wind-down.