SK hynix (000660) Q4 2024 earnings summary

Executive summary

• Achieved record-high Q4 revenue of KRW 19.77 trillion, up 12% sequentially and 75% year-over-year, driven by strong AI memory demand, especially HBM and enterprise SSDs; full-year 2024 revenue reached KRW 66.2 trillion, with operating income at KRW 23.5 trillion.

• Net profit for Q4 was KRW 8.01 trillion, with a net margin of 41%.

• Growth was driven by strong sales of AI memory products, especially HBM and eSSD, with HBM accounting for over 40% of DRAM revenue in Q4.

• Company emphasizes sustainable profit through differentiated AI product competitiveness and profitability-oriented operations.

Financial highlights

• Q4 operating income rose to KRW 8.08 trillion, with a 41% operating margin; EBITDA was KRW 11.25 trillion (57% margin).

• FY2024 revenue totaled KRW 66.2 trillion; operating profit KRW 23.5 trillion; net income for FY2024 reached KRW 19.8 trillion, reversing a prior year loss.

• Annual free cash flow reached KRW 13.9 trillion; cash and equivalents at year-end were KRW 14.2 trillion, and interest-bearing debt fell to KRW 22.7 trillion.

• Q4 non-operating gain of KRW 1.5 trillion included a KRW 0.62 trillion FX gain and KRW 0.87 trillion from partial sale of System IC Wuxi.

• Q4 2024 operating margin reached 41%, up 1 percentage point sequentially and 38 points year-over-year.

Outlook and guidance

• 2025 memory demand outlook is cautious due to inventory adjustments and geopolitical risks, but AI memory demand is expected to drive growth; DRAM demand projected to grow by mid- to high teens %, NAND by low teens % in 2025.

• HBM revenue expected to more than double in 2025, with 12-high HBM3E products to comprise over half of HBM3E shipments by mid-year.

• CapEx will increase slightly, focused on HBM and infrastructure, with flexibility to adjust based on market conditions.

• Expects continued demand growth for HBM and high-density server DRAM as AI server investments rise globally; plans to expand HBM3E supply, develop HBM4, and transition to advanced processes for DDR5 and LPDDR5.

• Anticipates consumer market recovery in the second half of the year, with expanding sales of AI-equipped PCs and smartphones.