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Silicon Motion's (SIMO) Q1 Earnings & Revenues Top Estimates
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Silicon Motion Technology Corporation (SIMO - Free Report) reported healthy first-quarter 2024 results, with both the bottom and the top lines surpassing the Zacks Consensus Estimate. The leading merchant supplier of client SSD (Solid State Drive) controllers witnessed top-line growth driven by healthy demand trends.
Net Income
On a GAAP basis, net income in the reported quarter was $16 million or 48 cents per American depositary share (ADS) compared with $10.2 million or 30 cents per ADS in the prior-year quarter. Higher net sales across various end markets contributed to the increase.
Non-GAAP net income was $21.6 million or 64 cents per ADS, up from $11.2 million or 33 cents per ADS in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of 58 cents.
Silicon Motion Technology Corporation Price, Consensus and EPS Surprise
Quarterly revenues increased to $189.3 million from the year-ago quarter’s tally of $124.1 million. The top line beat the Zacks Consensus Estimate by 5%. Increased sales of SSD controllers, as well as eMMC and UFS controllers, on a year-over-year basis, contributed to the top-line expansion. Net sales decreased 6% sequentially in the first quarter.
Management noted that sales of SSD controllers jumped to the range of 0-5% sequentially and 35-40% on a year-over-year basis.
Notably, revenues from eMMC+UFS (Embedded Multi-Media Card + Universal Flash Storage) decreased between 10% and 15% quarter over quarter but increased 235-240% year over year.
Revenues from SSD solutions declined in the range of 5-10% sequentially and 30-35% year over year.
Margin Details
Non-GAAP gross profit aggregated $85.2 million compared with $52.5 million in the year-ago quarter, with respective margins of 45% and 42.3%. The rise was primarily driven by higher revenues year over year.
Non-GAAP operating expenses increased to $62.5 million from the prior-year figure of $39.6 million. Higher R&D spending, along with general and administrative expenses, led to the increase.
Non-GAAP operating income surged to $22.6 million from $12.9 million, with margins of 12% and 10.4%, respectively.
Balance Sheet & Cash Flow
As of Mar 31, 2024, Silicon Motion had cash, cash equivalents, restricted cash and short-term investments of $349.3 million compared with $369 million as of Dec 31, 2023.
The company generated $7.8 million in cash from operations during the reported quarter compared with $43.4 million in the fourth quarter.
In the first quarter of 2024, the company’s capital expenditure totaled $10.7 million. This includes $5 million for the routine procurement of testing equipment, software, design tools and other goods and another $5.7 million for building construction in Hsinchu.
Outlook
For second-quarter 2024, management estimates non-GAAP revenues in the range of $199-$208 million. Non-GAAP gross margin is expected to be 45-46%, excluding $0.1 million of stock-based compensation. Operating margin is anticipated in the band of 16.5-17.5%, excluding $2.5-$3.0 million of stock-based compensation and dispute-related expenses.
Due to the strong start to 2024 and an increasing backlog, the company has raised its full-year outlook. For full-year 2024, management now projects non-GAAP revenues in the range of $800-$830 million, changed from the previous outlook of $765-$800 million.
Non-GAAP gross margin is expected to be 45-47%, excluding $0.5 million of stock-based compensation. Operating margin is anticipated in the band of 14.7-16.7%, which excludes $30.0-$32.0 million of stock-based compensation and dispute-related expenses. The earlier guidance outlined the exclusion of $31.0-$33.0 million of stock-based compensation and dispute-related expenses from the operating margin.
Per the management, SIMO is set to improve steadily through 2024, scaling new SSD and eMMC+UFS controller programs. Besides augmenting its product line, these adjustments are anticipated to enhance average selling prices and profitability.
Zacks Rank
Silicon Motion currently carries a Zacks Rank #2 (Buy).
Arista Networks, Inc. (ANET - Free Report) is slated to announce first-quarter 2024 results on May 7, after the market close. The stock, sporting a Zacks Rank #1 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 13.3%, on average, in the trailing four quarters.
Airgain, Inc. (AIRG - Free Report) is slated to report first-quarter 2024 results on May 8, after the closing bell. It currently carries a Zacks Rank #2. It has a long-term earnings growth expectation of 35%.
Headquartered in San Diego, CA, Airgain offers integrated wireless solutions in the form of antenna products. These products are equipped to solve critical connectivity needs in both the design process and the operating environment across the enterprise, automotive and consumer markets. Ideal for original equipment and design manufacturers, vertical markets, chipset vendors, service providers, value-added resellers and software developers worldwide, the customizable antennas from Airgain serve both indoor and outdoor connectivity issues.
Turtle Beach Corporation (HEAR - Free Report) is slated to report first-quarter 2024 results on May 7, after the closing bell. It develops and markets gaming headset solutions for various platforms, including video game and entertainment consoles, handheld consoles, personal computers, tablets and mobile devices under the Turtle Beach brand. It has a Zacks Rank #2.
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Silicon Motion's (SIMO) Q1 Earnings & Revenues Top Estimates
Silicon Motion Technology Corporation (SIMO - Free Report) reported healthy first-quarter 2024 results, with both the bottom and the top lines surpassing the Zacks Consensus Estimate. The leading merchant supplier of client SSD (Solid State Drive) controllers witnessed top-line growth driven by healthy demand trends.
Net Income
On a GAAP basis, net income in the reported quarter was $16 million or 48 cents per American depositary share (ADS) compared with $10.2 million or 30 cents per ADS in the prior-year quarter. Higher net sales across various end markets contributed to the increase.
Non-GAAP net income was $21.6 million or 64 cents per ADS, up from $11.2 million or 33 cents per ADS in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of 58 cents.
Silicon Motion Technology Corporation Price, Consensus and EPS Surprise
Silicon Motion Technology Corporation price-consensus-eps-surprise-chart | Silicon Motion Technology Corporation Quote
Revenues
Quarterly revenues increased to $189.3 million from the year-ago quarter’s tally of $124.1 million. The top line beat the Zacks Consensus Estimate by 5%. Increased sales of SSD controllers, as well as eMMC and UFS controllers, on a year-over-year basis, contributed to the top-line expansion. Net sales decreased 6% sequentially in the first quarter.
Management noted that sales of SSD controllers jumped to the range of 0-5% sequentially and 35-40% on a year-over-year basis.
Notably, revenues from eMMC+UFS (Embedded Multi-Media Card + Universal Flash Storage) decreased between 10% and 15% quarter over quarter but increased 235-240% year over year.
Revenues from SSD solutions declined in the range of 5-10% sequentially and 30-35% year over year.
Margin Details
Non-GAAP gross profit aggregated $85.2 million compared with $52.5 million in the year-ago quarter, with respective margins of 45% and 42.3%. The rise was primarily driven by higher revenues year over year.
Non-GAAP operating expenses increased to $62.5 million from the prior-year figure of $39.6 million. Higher R&D spending, along with general and administrative expenses, led to the increase.
Non-GAAP operating income surged to $22.6 million from $12.9 million, with margins of 12% and 10.4%, respectively.
Balance Sheet & Cash Flow
As of Mar 31, 2024, Silicon Motion had cash, cash equivalents, restricted cash and short-term investments of $349.3 million compared with $369 million as of Dec 31, 2023.
The company generated $7.8 million in cash from operations during the reported quarter compared with $43.4 million in the fourth quarter.
In the first quarter of 2024, the company’s capital expenditure totaled $10.7 million. This includes $5 million for the routine procurement of testing equipment, software, design tools and other goods and another $5.7 million for building construction in Hsinchu.
Outlook
For second-quarter 2024, management estimates non-GAAP revenues in the range of $199-$208 million. Non-GAAP gross margin is expected to be 45-46%, excluding $0.1 million of stock-based compensation. Operating margin is anticipated in the band of 16.5-17.5%, excluding $2.5-$3.0 million of stock-based compensation and dispute-related expenses.
Due to the strong start to 2024 and an increasing backlog, the company has raised its full-year outlook. For full-year 2024, management now projects non-GAAP revenues in the range of $800-$830 million, changed from the previous outlook of $765-$800 million.
Non-GAAP gross margin is expected to be 45-47%, excluding $0.5 million of stock-based compensation. Operating margin is anticipated in the band of 14.7-16.7%, which excludes $30.0-$32.0 million of stock-based compensation and dispute-related expenses. The earlier guidance outlined the exclusion of $31.0-$33.0 million of stock-based compensation and dispute-related expenses from the operating margin.
Per the management, SIMO is set to improve steadily through 2024, scaling new SSD and eMMC+UFS controller programs. Besides augmenting its product line, these adjustments are anticipated to enhance average selling prices and profitability.
Zacks Rank
Silicon Motion currently carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Arista Networks, Inc. (ANET - Free Report) is slated to announce first-quarter 2024 results on May 7, after the market close. The stock, sporting a Zacks Rank #1 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 13.3%, on average, in the trailing four quarters.
Airgain, Inc. (AIRG - Free Report) is slated to report first-quarter 2024 results on May 8, after the closing bell. It currently carries a Zacks Rank #2. It has a long-term earnings growth expectation of 35%.
Headquartered in San Diego, CA, Airgain offers integrated wireless solutions in the form of antenna products. These products are equipped to solve critical connectivity needs in both the design process and the operating environment across the enterprise, automotive and consumer markets. Ideal for original equipment and design manufacturers, vertical markets, chipset vendors, service providers, value-added resellers and software developers worldwide, the customizable antennas from Airgain serve both indoor and outdoor connectivity issues.
Turtle Beach Corporation (HEAR - Free Report) is slated to report first-quarter 2024 results on May 7, after the closing bell. It develops and markets gaming headset solutions for various platforms, including video game and entertainment consoles, handheld consoles, personal computers, tablets and mobile devices under the Turtle Beach brand. It has a Zacks Rank #2.