Nordic Semiconductor (NOD) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached USD 159 million, up 18% year-over-year and 24% sequentially, driven by strong consumer demand, seasonality, and broad market recovery, especially in consumer electronics and PC accessories.

• Gross margin was 49.5%, slightly down from 50.5% in Q3 2023, with EBITDA at USD 16.2 million and net profit after tax at USD 6.2 million.

• Consumer segment led the recovery, accounting for 69% of total revenue and showing strong growth.

• Company maintains a leading market position in Bluetooth Low Energy, with over 40% market share and robust design activity.

• Commercial launch of the nRF54 Series and nRF9151 SiP, with major launches and customer wins, is expected to drive future growth.

Financial highlights

• Bluetooth revenue increased 19% year-over-year to USD 143.1 million; proprietary revenue grew 18% to USD 12.1 million.

• Consumer segment revenue was USD 109 million (+35% YoY, +31% QoQ); industrial revenue at USD 26 million (+8% YoY); healthcare at USD 21 million (-21% YoY, +41% QoQ); other at USD 3 million.

• Operating cash flow was USD 13.8 million, reversing a prior year outflow; cash and cash equivalents at USD 260.8 million.

• Inventories increased to USD 181 million in Q3, up USD 80 million year-over-year; net working capital at 44.6% of LTM revenue.

• CapEx was USD 3.1 million (1.5%-2% of revenue), reflecting continued low investment levels.

Outlook and guidance

• Q4 2024 revenue is guided between USD 130 million and USD 150 million, with gross margin expected around 50%.

• This implies a year-over-year revenue growth of 20%-39% for Q4, but a sequential decline of 6%-18% from Q3 due to seasonality.

• Modest growth is expected in 2025, with acceleration anticipated from 2026 onward as new products ramp.

• Long-term targets include average annual revenue growth above 20% and an EBITDA margin of 25% within five years.