WIN Semiconductors (3105) Q2 2024 earnings summary

Executive summary

• Q2 2024 consolidated revenue reached TWD 4.96 billion (NT$4.96b), up 12% quarter-on-quarter and 26% year-on-year, driven by higher utilization and improved product mix.

• Net profit attributable to the parent company was TWD 485 million (NT$485m), with EPS of TWD 1.14, both increasing from Q1 2024.

• For H1 2024, revenue was TWD 9.40 billion, up 38% year-over-year, and the company returned to profitability with net income of TWD 892 million, compared to a net loss in H1 2023.

• Gross margin improved to 27.2% in Q2 2024 from 22.4% last quarter, despite a 3.1 percentage point negative impact from a subsidiary's share price decline.

• Wi-Fi and infrastructure segments led Q2 revenue growth, while optical declined due to product transition.

Financial highlights

• Q2 gross profit was TWD 1,352 million, up 36% quarter-on-quarter and 71% year-on-year.

• Operating margin rose to 10.1% in Q2 2024, up 6 percentage points from the previous quarter.

• Net income for Q2 was TWD 393 million, with a net margin of 7.9%.

• H1 2024 net income was TWD 660 million, reversing a loss in H1 2023.

• Return on equity for Q2 was 5%.

Outlook and guidance

• Q3 2024 revenue is expected to decline by high single digits quarter-on-quarter, with gross margin guided to the mid-20% range due to less favorable product mix.

• Full-year 2024 revenue is still expected to increase over 2023.

• Management expects continued growth in the foundry segment, supported by robust demand in Asia and the Americas.

• Chinese Android customer demand to slow in Q3, while iOS inventory build remains strong.