SK hynix (000660) Q2 2024 earnings summary

Executive summary

• Achieved record quarterly revenue of KRW 16.4233 trillion in Q2 2024, up 32% sequentially and 125% year-on-year, driven by strong AI memory demand, HBM, and eSSD sales, and ASP increases.

• Operating profit reached KRW 5.47 trillion with a 33% margin, and net profit was KRW 4.12 trillion, reflecting a turnaround from a loss a year ago.

• HBM sales grew over 80% sequentially and over 250% year-on-year, becoming a key revenue driver; eSSD sales up 50% sequentially.

Financial highlights

• EBITDA was KRW 8.59 trillion with a 52% margin; gross profit was KRW 7.50 trillion and gross margin improved to 46%.

• Cash and equivalents were KRW 9.7 trillion, down from KRW 10.32 trillion in Q1; borrowings reduced by KRW 4.3 trillion to KRW 25.2 trillion.

• Net profit margin was 25%, up from a loss a year ago.

Outlook and guidance

• Strong AI server demand expected to continue in 2H 2024, with DRAM bit shipment to grow slightly and NAND to decrease mid-single digits in Q3.

• HBM3E shipments to surpass HBM3 in Q3, with mass production of 12-high HBM3E and new high-density eSSD products planned.

• CapEx for 2024 expected to be higher than initially planned, focused on AI memory and infrastructure, but managed within operating cash flow.