Nova (NVMI) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $157M, up 11% sequentially and 28% year-over-year, surpassing guidance and setting new company highs across all key metrics.

• GAAP net income reached $45.1M ($1.41/diluted share), up 23% sequentially and 48% year-over-year; non-GAAP net income was $52.0M ($1.61/diluted share), up 16% sequentially and 52% year-over-year.

• Growth driven by strong demand for advanced packaging, chemical metrology, logic, and mature node solutions.

• Cash reserves exceeded $750M, supporting strategic flexibility and a $1B annual sales target.

• Nova has a diversified global footprint, doubling revenues every five years through innovation and expansion.

Financial highlights

• Q2 2024 revenue was $157M, up 11% quarter-over-quarter and 28% year-over-year, with record profitability and EPS at $1.67.

• Gross margin reached 59% GAAP and 61% non-GAAP, above the target model of 57%-59%.

• Operating margin was 29% GAAP and 34% non-GAAP; operating income for Q2 2024 was $45.6M.

• Free cash flow in H1 2024 was $115M, or 38% of revenue; record operating and free cash flow achieved in Q2.

• Last twelve months (LTM) revenue reached $562M, with a 5-year CAGR of 16%.

Outlook and guidance

• Q3 2024 revenue expected between $168M and $176M; GAAP EPS guidance: $1.39–$1.52; non-GAAP EPS: $1.60–$1.73.

• Gross margin for Q3 expected at 56% GAAP and 58% non-GAAP; operating expenses to rise to $50M GAAP and $45M non-GAAP.

• Long-term targets: $1B annual revenue, gross margin 57%–59%, operating margin 27%–31%, EPS >$7.

• Memory segment expected to maintain around 25% of product revenue in H2 2024.

• China revenue share expected to be slightly higher than last year but to decline in H2 as leading-edge nodes accelerate.