Intevac (IVAC) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $14.5M, up $4.2M year-over-year, driven by strong HDD technology upgrades and execution in Singapore, with gross margin improving to 38.2% from 24.9% year-over-year.

• Net loss narrowed to $3.3M ($0.12/share), better than forecast and improved from $4.9M ($0.19/share) in Q2 2023, aided by higher revenues, improved gross profit, and ERC benefits.

• Cash and investments at quarter end were $70.4M, up nearly $5M from Q1, supporting a strong balance sheet and ongoing R&D and market expansion.

• Order backlog was $42.5M at quarter-end, down from $53.1M in Q1 2024 and $58.2M in Q2 2023, supporting a full-year HDD revenue outlook of $45M.

• Company transformation focuses on growth through the TRIO™ platform, targeting large addressable markets in consumer electronics and auto displays.

Financial highlights

• Q2 2024 revenue: $14.5M; gross margin: 38.2%; operating expenses: $8.8M; net loss: $3.3M ($0.12/share); cash and investments: $70.4M.

• Six-month 2024 revenues: $24.2M (up from $21.8M in 2023); six-month gross margin: 40.4%; six-month net loss: $4.9M.

• Market capitalization: $100M; share price: $3.61 as of August 2, 2024; no outstanding debt.

• Interest and other income for Q2 2024: $0.8M, up from $0.7M year-over-year.

• Inventory: $45.6M as of June 29, 2024, mainly due to TRIO inventory.

Outlook and guidance

• Full-year HDD revenue outlook raised to $45M, up from $40M.

• Q3 2024 revenue guidance: $10.5M–$12.0M; gross margin expected at 37%–39%; operating expenses projected at $8.6M–$8.8M; EPS guidance: ($0.14)–($0.18).

• Revenue from the TRIO platform is expected to begin as product qualifications complete in 2024.

• Fiscal 2024 is expected to remain challenging, with no profitability anticipated for the year.

• Expectation for 2-3 initial TRIO tool orders in the second half of 2024.