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 KRW 7.03 trillion, a record high with a 40% margin, up 29% sequentially and surpassing previous peaks.

• Net profit for the quarter was KRW 5.75 trillion, with a net profit margin of 33%, up 40% sequentially and reversing a loss from the prior year.

• 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.

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

Financial highlights

• HBM revenue grew over 70% sequentially and 330% year-over-year; HBM now accounts for 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; gross profit for Q3 was KRW 9.17 trillion.

• Cash and equivalents increased to KRW 10.9 trillion; net debt fell to KRW 11 trillion, improving leverage ratios.

• Basic EPS for Q3 was KRW 8,344; diluted EPS KRW 7,924.

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 growth forecast to improve from mid- to high-teens percent in 2025; NAND demand to grow mid-teens percent.

• CapEx for 2024 expected in mid- to high KRW 10 trillion range, with 2025 slightly higher, focused on HBM, DDR5, LPDDR5, and infrastructure.

• Company plans to maintain investment in advanced manufacturing and R&D to support future growth.