SK hynix (000660) Q3 2024 earnings summary

Executive summary

• Achieved record high quarterly revenue of KRW 17.5731 trillion in Q3 2024, up 7% sequentially and 94% year-over-year, driven by strong AI memory demand and premium products like HBM and enterprise SSDs.

• Operating profit reached a record KRW 7.03 trillion, with a 40% margin, surpassing previous peaks and marking an all-time high.

• Net profit for the quarter was KRW 5.75 trillion, with a net profit margin of 33%.

• DRAM and NAND profitability improved quarter-over-quarter, supported by strong sales expansion and product mix optimization.

• HBM's share of DRAM revenues hit 30% in Q3 and is forecast to reach 40% in Q4, reflecting robust demand from AI server customers.

Financial highlights

• HBM revenue grew over 70% sequentially and 330% year-over-year; HBM now 30% of DRAM sales, expected to reach 40% in Q4.

• Enterprise SSD revenue rose nearly 20% quarter-on-quarter and over 430% year-over-year, now over 60% of NAND sales.

• EBITDA was KRW 10.1 trillion with a 57% margin; depreciation and amortization at KRW 3.07 trillion.

• Cash and equivalents at KRW 10.86 trillion, up sequentially; net debt at KRW 11 trillion, down KRW 4.6 trillion.

• Gross profit was KRW 9.17 trillion, up 22% quarter-on-quarter; gross margin rose to 52%.

Outlook and guidance

• DRAM bit shipments expected to grow mid-single digits sequentially in Q4, led by HBM and server DRAM.

• NAND bit shipments projected to rise low teens percent sequentially, driven by enterprise SSDs.

• HBM3E 12-high shipments to begin in Q4; sales volume of 12-high HBM3E to surpass 8-high in H1 2025.

• DRAM demand expected to grow mid-to-high teens percent in 2024 and high teens percent in 2025; NAND demand to grow mid teens percent both years.

• PC and smartphone memory demand to recover gradually in 2025, with AI features driving content growth.