Hon Hai Precision Industry (2317) Q3 2024 earnings summary

Executive summary

• Q3 FY24 revenue reached NTD 1,854,569 million (NT$1,854.6 billion), up 20% year-over-year and quarter-over-quarter, with net income attributable to owners at NTD 49,325 million, up 14% year-over-year.

• Consolidated revenue for the nine months ended September 30, 2024, was NT$4,729.1 billion, up 9.7% year-over-year, and net income for the nine months was NT$106.4 billion, up 19.6% year-over-year.

• Operating income for Q3 FY24 was NTD 54,771 million, up 19% year-over-year and 23% sequentially; operating profit for the nine months was NT$136.1 billion, up 16% year-over-year.

• Smart Consumer Electronics accounted for 45% of Q3 revenue, followed by Cloud and Networking at 32%, Computing at 17%, and Components/Other at 6%.

• Basic EPS for Q3 FY24 was NTD 3.55, up from NTD 3.11 in Q3 FY23; basic EPS for the nine months was NT$7.67, up from NT$6.42 year-over-year.

Financial highlights

• Gross profit margin for Q3 FY24 was 6.19%, slightly down year-over-year; gross margin for the nine months was 6.3%.

• Net profit margin for Q3 FY24 was 2.66%, a minor decrease from the prior year.

• Cash and cash equivalents at September 30, 2024, were NT$791.1 billion, down 35% year-over-year.

• Free cash flow for the first nine months was negative NTD 18,634 million, compared to positive NTD 286,153 million in the prior year period.

• Total assets as of September 30, 2024, were NT$4,272.3 billion, up 8% year-over-year.

Outlook and guidance

• AI server growth expected to be driven mainly by GB200 and NVIDIA product lines in the coming year, with other suppliers maintaining a low market share.

• General server revenue is projected to grow over 20% this year and continue growing next year, though at a slower pace than AI servers.

• Q4 FY24 expected to see sequential growth in Smart Consumer Electronics and Cloud/Networking segments.

• FY24 guidance indicates year-over-year growth in Smart Consumer Electronics and Cloud/Networking, with stable or moderate growth in other segments.

• FY25 outlook highlights continued focus on AI industry development, with political, economic, and monetary policy factors influencing performance.