Espressif Systems (688018) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached CNY 920.2 million, up 38.0% year-over-year, driven by expanded product categories and new customer wins.

• Net income attributable to Espressif was CNY 151.6 million, a 134.8% increase year-over-year, mainly due to higher revenue and improved gross margin.

• Gross margin improved to 43.2% in H1 2024, with AloT chips achieving 49.0%, supported by lower raw material costs and higher-margin new customer projects.

• EBITDA margin rose to 17.8% in H1 2024 from 10.3% in H1 2023, reflecting operational leverage.

• Espressif acquired a majority stake in M5Stack in Q2 2024, enhancing its modular hardware development capabilities.

Financial highlights

• H1 2024 revenue: CNY 920.2 million (H1 2023: CNY 667.0 million).

• H1 2024 net income: CNY 152.7 million (H1 2023: CNY 64.6 million).

• H1 2024 gross margin: 43.2% (H1 2023: 40.8%).

• H1 2024 EBITDA margin: 17.8% (H1 2023: 10.3%).

• H1 2024 basic EPS: CNY 1.8116 (H1 2023: CNY 0.8059).

Outlook and guidance

• Management targets a mid-term overall gross margin of 40% to support future R&D funding.

• Economic recovery observed, with growth from both new and existing customers and emerging applications in new sectors.