eMemory Technology (3529) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached NT$899.5 million, up 0.7% sequentially and 14.3% year-over-year, with gross margin at 100%.

• Achieved a milestone with the first 3-nanometer customer license project and ongoing collaboration with a global CPU IP leader for cloud data centers.

• Siemens partnership on SRAM repair progressing well, addressing high-density memory needs for AI and HPC applications.

• Technology development advanced to 2-nanometer, with design wins and mass production at 5, 6, 7, 12, and 16-nanometer nodes.

• NeoFuse and NeoBit technologies led revenue contributions; NeoFuse comprised 58.4% of Q3 revenue, up 1.3% QoQ and 5.3% YoY.

Financial highlights

• Q3 2024 revenue was NT$899.5 million, up 0.7% sequentially and 14.3% year over year; nine-month revenue was NT$2,595.3 million, up 20.6% year over year.

• Operating income reached NT$505 million, up 2% sequentially and 21% year over year; operating margin rose to 56.1%.

• Net income was NT$414 million, down 12.9% sequentially but up 2% year over year; nine-month net profit rose 23% to NT$1,305.8 million.

• EPS for Q3 was NT$5.54; nine-month EPS was NT$17.68, up from NT$14.35 a year ago.

• Licensing revenue accounted for 32.3% of Q3 revenue, down 3% sequentially but up 12.2% year over year; royalties made up 67.7%, up 2.6% sequentially and 15.3% year over year.

Outlook and guidance

• Licensing and royalty revenues expected to maintain growth momentum, driven by strong demand from foundries and chip companies.

• Royalty revenue is projected to grow as more tape-outs at advanced nodes (16/12/7/6nm) enter production and market share increases in mature applications.

• New IP technologies (NeoFuse/NeoPUF) verified in N3P process; NeoMTP for e-Paper display drivers to ramp up soon.

• 2nm technology development ongoing with leading foundries; security IP and SRAM repair toolset collaborations expected to contribute to revenue.

• Anticipates significant growth in PUF-based security IP revenue in Q4.