Realtek Semiconductor (2379) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached TWD 30.67 billion, up 19.7% quarter-over-quarter and 16.7% year-over-year, with all segments growing and Automotive showing the strongest momentum.

• Revenue for the six months ended June 30, 2024 was NT$56.3 billion, up 22.6% year-over-year; net income rose 70.8% to NT$7.5 billion.

• Gross margin was 50.9%, stable sequentially but up 9.2 percentage points year-over-year, reflecting a favorable product mix shift.

• Earnings per share for the six-month period were NT$14.66 (basic), up from NT$8.58 a year ago.

• Inventory turnover days dropped to 75, indicating healthy inventory levels.

Financial highlights

• Q2 2024 revenue was NT$30.7 billion, up 16.7% year-over-year; Q2 net income was NT$4.4 billion, up 68.3%.

• Operating profit was TWD 3.97 billion (13.0% of revenue), and net profit was TWD 4.39 billion (14.3% of revenue); EPS improved to TWD 8.55 from TWD 6.10 in Q1 and TWD 5.08 in Q2 2023.

• Operating income for the six months was NT$6.7 billion, up 91.5% year-over-year.

• Cash and cash equivalents increased to NT$16.4 billion as of June 30, 2024, from NT$13.8 billion a year ago.

• Operating expenses rose 27% year-over-year, mainly due to higher R&D and employee costs.

Outlook and guidance

• Q3 is expected to remain strong, supported by ongoing spec upgrades in connectivity and AI-rich applications, though order visibility is limited.

• Gross margin is expected to remain stable in Q3.

• Management expects continued growth, supported by strong demand for integrated circuit products and ongoing investments in R&D.

• Inventory write-off reversals will continue into 2025 but with decreasing impact.

• OPEX ratio is expected to stay at current levels in the short term, targeting mid-30s in the mid-term.