Yahoo Finance ACM Research Inc (ACMR) (Q1 2024) Earnings Call Transcript Highlights: Soaring Revenues and ...
Revenue: $152.2 million, up 105% from the previous year.
Gross Margin: 52.5%, slightly down from 54% the previous year.
Operating Margin: 26.2%, showing strong profitability.
Net Income: $34.6 million, significantly increased from $9.9 million.
Earnings Per Share (EPS): $0.52, up from $0.15.
Cash and Equivalents: $288.3 million at the end of the quarter.
Total Shipments: $245 million, up 175%.
Capital Expenditures: $25.4 million, with an expected annual spend of about $100 million.
Inventory: Total $581.1 million, with finished goods making up $262.9 million.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
ACM Research Inc (NASDAQ:ACMR) reported a significant revenue increase of 105% in Q1 2024, reaching $152.2 million.
Gross margin for Q1 was strong at 52.5%, exceeding the normal expected range of 40% to 45%.
Shipments in Q1 2024 were up 175% to $245 million, driven by high delivery of finished goods and strong production execution.
ACM Research Inc (NASDAQ:ACMR) has expanded its product portfolio with significant advancements in SPM tools and expects a meaningful ramp in 2024.
The company is making strategic international expansions, including new hires and facility investments in the US, Korea, and Europe to support growth.
Negative Points
Revenue from ECP, furnace, and other technologies declined by 3% in Q1, representing 70% of total revenue.
Operating expenses increased to $40.1 million in Q1 from $29.2 million, reflecting higher personnel and development costs.
The company noted that gross margin could vary due to factors like sales volume, product mix, and currency impacts, indicating potential instability.
ACM Research Inc (NASDAQ:ACMR) is still in the build phase for significant international revenue contributions, with major orders expected to materialize mainly in future periods.
Despite strong Q1 shipments, the company anticipates a normalization in Q2, suggesting potential variability in shipment volumes.
Q & A Highlights
Q: What are the new product categories expected to drive the highest growth in 2024 for ACM Research? A: David Wang, CEO, highlighted that cleaning tools continue to be a major revenue driver, with significant contributions expected from SPM tools covering various temperatures. Additionally, the company anticipates revenue contributions from wet etcher and supercritical CO2 tools in the near future. ECP and furnace products are also expected to grow, contributing significantly to revenue.
Q: Can you provide an update on ACM Research's progress with its US customers? A: David Wang, CEO, mentioned ongoing efforts to expand the customer base in the US, with a key customer receiving multiple types of cleaning tools. The company sees significant potential for growth in the US market and is actively engaging with multiple customers for both front-end and packaging solutions.
Q: With the broadening success in international markets, does ACM Research see its business growing beyond the $1 billion mark? A: David Wang, CEO, expressed confidence in reaching a billion-dollar market solely in China and sees accelerated growth internationally with differentiated technology. The goal is for half of the revenue to come from China and the other half from international markets.
Q: What are the expectations for shipment levels throughout the rest of the year after a high first quarter? A: David Wang, CEO, explained that Q1 shipments were unusually high due to delayed shipments from the previous quarter and efficient production during the Lunar New Year. He anticipates a slight decrease in Q2 but expects shipments to grow in the subsequent quarters.
Q: How is ACM Research advancing in the high bandwidth memory (HBM) business with Hynix? A: David Wang, CEO, noted that Hynix is a key customer, particularly for ACM's advanced cleaning and electro copper plating technologies, which are crucial for HBM production. The company is optimistic about its differentiated products being a potential choice for Hynix.
Q: What are the next steps for ACM Research in securing and expanding business with TSMC? A: David Wang, CEO, mentioned ongoing engagement and evaluation processes with TSMC, focusing on cleaning and copper plating technologies. The company is confident in its differentiated products and is actively working to meet TSMC's requirements.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
