VeriSilicon Microelectronics (Shanghai) (688521) Q4 2024 earnings summary

Executive summary

• Revenue for 2024 was RMB 2.32 billion, nearly flat year-over-year, with a net loss attributable to shareholders of RMB -601 million, and an adjusted net loss (excluding non-recurring items) of RMB -643 million.

• Gross margin declined to 39.86%, down 4.89 percentage points year-over-year, mainly due to changes in revenue mix and lower margin in chip customization.

• R&D investment reached RMB 1.25 billion, accounting for 53.72% of revenue, up 12.9 percentage points year-over-year.

• The company maintained a high order backlog, with RMB 2.406 billion in hand at year-end, up 13% from Q3 and marking five consecutive quarters at high levels.

Financial highlights

• Revenue: RMB 2.32 billion, down 0.69% year-over-year.

• Net loss attributable to shareholders: RMB -601 million (2023: RMB -296 million).

• Adjusted net loss (excluding non-recurring items): RMB -643 million.

• Gross profit: RMB 926 million, down 11.54% year-over-year.

• Gross margin: 39.86%, down 4.89 percentage points.

• Operating cash flow: RMB -346 million.

• R&D expense: RMB 1.25 billion, up 31.68% year-over-year.

• Basic and diluted EPS: RMB -1.20.

Outlook and guidance

• The company is focusing on AIGC, automotive, wearable, data center, and IoT sectors, with continued investment in chiplet technology and next-generation IP.

• Plans to raise up to RMB 1.81 billion via a targeted share issuance for R&D in AIGC and chiplet platforms.

• Management expects R&D intensity to normalize as project volume increases and industry recovers.