SK hynix (000660) Q2 2024 earnings summary

Executive summary

• Achieved record quarterly revenue of KRW 16.42 trillion in Q2 2024, up 32% sequentially and 125% year-on-year, driven by strong AI memory demand, ASP increases, and value-added product mix.

• Operating profit reached KRW 5.47 trillion with a 33% margin, and net profit was KRW 4.12 trillion (net margin 25%), reflecting significant profitability improvement.

• HBM sales grew over 80% sequentially and over 250% year-on-year, becoming a key revenue driver; eSSD sales up 50% sequentially.

Financial highlights

• EBITDA was KRW 8.59 trillion with a 52% margin, up 41% sequentially and 1,305% year-on-year.

• Gross profit was KRW 7.50 trillion, with gross margin improving to 46% from 39% in Q1.

• Cash and equivalents were KRW 9.7 trillion at quarter-end, down from KRW 10.32 trillion in Q1.

• Debt reduced to KRW 25.2 trillion from KRW 29.51 trillion in Q1; debt-to-equity ratio improved to 42%.

• Net pre-tax income was KRW 5.05 trillion.

Outlook and guidance

• DRAM bit shipment expected to grow by low single digits in Q3, led by HBM expansion; NAND bit shipment projected to decrease by mid-single digits, but revenue growth to continue due to rising prices and optimized mix.

• HBM3E shipments to surpass HBM3 in Q3, with HBM3E 12-high mass production starting and volume shipments in Q4.

• CapEx for 2024 expected to be higher than initially planned, focused on AI memory and infrastructure expansion, but within operating cash flow.

• Strong AI server demand expected to continue in 2H 2024, with gradual recovery in conventional applications.