Benchmark Electronics (BHE) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $658 million, exceeding guidance midpoint, with strong Semi-Cap and A&D growth offset by declines in Medical and AC&C sectors; net income was $15.4 million and operating income $28.1 million.

• Non-GAAP gross margin reached 10.2% (up 50 bps YoY), and non-GAAP operating margin was 5.3%, marking the 16th consecutive quarter of YoY expansion.

• Free cash flow for Q3 was $29 million, with trailing 12-month free cash flow totaling $245 million; operating cash flow for Q3 was $39 million.

• Inventory reduced by $18 million sequentially and $143 million year-over-year, supporting cash flow and working capital efficiency.

• International sales comprised 65% of Q3 2024 revenue, up from 60% in Q3 2023.

Financial highlights

• Q3 non-GAAP EPS was $0.57, at the high end of guidance; GAAP EPS was $0.42, both down year-over-year.

• GAAP gross margin was 10.1%, non-GAAP gross margin 10.2%; GAAP operating margin 4.3%, non-GAAP 5.3%.

• Cash balance at quarter-end was $324 million, up from $283 million at year-end 2023.

• Net cash positive position of $46 million at quarter end.

• ROIC improved to 9.9% non-GAAP, up 50-60 bps YoY.

Outlook and guidance

• Q4 2024 revenue expected between $640 million and $680 million.

• Non-GAAP gross margin guidance at 10.2%; operating margin 4.9%–5.1%.

• Non-GAAP EPS guidance for Q4 is $0.53–$0.59; GAAP EPS $0.40–$0.46.

• Free cash flow for the year expected to exceed $130 million.

• Management expects $60M–$70M in capital expenditures over the next 12 months, mainly for machinery and equipment.