Technoprobe (TPRO) Q3 2024 earnings summary

Executive summary

• Nine-month 2024 revenues reached €386.9M, up 25.9% year-over-year, driven by strong AI demand, organic growth, and acquisitions, while automotive and industrial segments remained weak.

• EBITDA for the period was €95.3M, down 5.2% year-over-year, reflecting higher R&D investments, acquisition effects, and lower production yields.

• Net financial position improved to €630.3M, supported by operating cash flow and a capital increase.

• AI, especially edge and inference applications, is the main revenue driver, with increased test complexity and higher ASPs supporting growth.

• Consumer markets are stabilizing, with normalization of inventories and expectations for low single-digit growth in 2025.

Financial highlights

• Q3 2024 revenue was €145.8M, up 31.2% year-over-year and 4.7% sequentially, at the lower end of guidance.

• Q3 2024 gross profit was €59.4M (40.7% margin), up 8.8% year-over-year; EBITDA was €34.6M (23.7% margin), down 3.4% year-over-year.

• Nine-month 2024 gross profit was €160.1M (41.4% margin), up 2.2% year-over-year; EBITDA margin was 24.6%, down from 32.7% in 2023.

• Revenue growth was half driven by AI and consumer recovery, half by Harbor and DIS acquisitions; FX impact was a 1% headwind.

• Gross margin declined from 51% to 41.4% year-over-year due to acquisition dilution, higher depreciation, and product complexity.

Outlook and guidance

• Q4 2024 revenue expected at ~€150M ±3%, gross margin 42% ±2%, EBITDA margin 25% ±2%.

• ~€15M in Q4 revenue pushed to Q1 2025 due to customer delivery requests, not cancellations.

• Profitability is expected to recover in Q4 and 2025 as manufacturing constraints are resolved.

• AI is expected to account for ~30% of revenue in 2025, up from 25% in 2024.

• Sequential growth in revenues and profitability expected, driven by AI and consumer market stabilization.