Phison Electronics (8299) Q4 2024 earnings summary

Executive summary

• Full-year 2024 revenue was NT$58.94B, up 22.2% year-over-year, with gross margin at 32.4% and EPS at NT$38.95, reflecting strong growth despite a weak Q4.

• Q4 revenue was NT$12.57B, the lowest of the year, down 20.2% year-over-year, impacted by weak consumer demand and inventory adjustments, but non-consumer segments remained over 70% of the mix.

• Q4 net income reached NT$2.39B, up 246% sequentially, supported by one-time investment gains from the HSG share disposal, offset by increased R&D and bonus expenses.

• Inventory levels were reduced from TWD 32 billion to TWD 24 billion, improving cash position.

• Non-consumer/retail products contributed over 70% of revenue, reducing exposure to NAND market fluctuations.

Financial highlights

• 4Q24 gross margin was 30.8%, with a full-year gross margin of 32.4%.

• Full-year net income was NT$7.95B, up 119.5% year-over-year; full-year EPS was NT$38.95.

• R&D expenses reached TWD 12.5 billion, the highest ever, driven by extra profits and new chip development.

• Adjusted full-year EPS (non-TIFRS) was NT$35.36, mainly from HSG share disposal and share-based compensation.

• February 2025 revenue was NT$4.53B, up 25% month-over-month.

Outlook and guidance

• Demand is rebounding month-over-month since January, with February revenue up 25% sequentially.

• Gross margin is expected to improve in 2024, supported by higher Adaptive software sales and stronger demand.

• Management expects revenue and margin growth in 2025 versus 2024, but warns of potential NAND supply constraints in H2.

• Focus on leadership in storage and AI sectors, with continued investment in edge AI solutions.

• No formal financial guidance provided due to market volatility.