Quanta Computer (2382) Q2 2024 earnings summary

Executive summary

• Q2 2024 achieved record highs in gross profit, operating profit, and net profit, with margin ratios at their highest in two decades, driven by strong AI sector leadership and operational effectiveness.

• Net sales for Q2 2024 reached TWD 310 billion, up 19.7% quarter-on-quarter and 26.5% year-over-year, fueled by improved GPU supply and AI server shipment momentum.

• Net income for Q2 2024 was TWD 15.13 billion, up 25.4% quarter-on-quarter and 49.4% year-over-year; EPS for Q2 was TWD 3.92, up from TWD 2.63 a year ago.

• For the first half of 2024, revenue was TWD 569 billion (+11.3% YoY), net income TWD 27.2 billion (+63.8% YoY), and basic EPS TWD 7.06.

• Board approved issuance of up to USD 1 billion in unsecured overseas convertible bonds in August 2024.

Financial highlights

• Gross profit for Q2 2024 was TWD 26.6 billion, up 21.2% quarter-on-quarter and 27.4% year-over-year; gross margin was 8.58%.

• Operating profit for Q2 2024 reached TWD 15.2 billion, up 30% sequentially and 34.7% year-over-year; operating margin expanded to 4.91%.

• Net income after tax for Q2 2024 was TWD 15.1 billion, up 25.4% quarter-on-quarter and 49.4% year-over-year; net margin was 4.88%.

• For the first half of 2024, gross profit was TWD 48.6 billion (+26.3% YoY), operating profit TWD 26.9 billion (+40.5% YoY), and net income TWD 27.2 billion (+63.8% YoY).

• Pre-tax income for Q2 2024 was TWD 19.6 billion, up 35.9% year-over-year and 34.9% sequentially.

Outlook and guidance

• Q3 notebook shipments expected to be flat to slightly up sequentially, but full-year forecast remains a single-digit decline.

• AI server sales momentum expected to continue, with triple-digit year-over-year growth in 2024.

• Margins in Q3 expected to decline sequentially from Q2 peak due to higher ASP products and increased expenses.

• Auto business annual sales target unchanged, with double-digit year-over-year growth expected.

• Management expects to comply with all financial covenants for at least 12 months after the reporting date.