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Silicon Motion Technology Corporation (SIMO - Free Report) reported strong second-quarter 2024 results, wherein both the top and bottom lines surpassed 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 improved to $30.8 million or 91 cents per American depositary share (ADS) from $11 million or 33 cents per ADS in the prior-year quarter. Higher net sales across various end markets contributed to the year-over-year improvement in GAAP earnings.
Non-GAAP net income was $32.5 million or 96 cents per ADS compared with $12.6 million or 38 cents per ADS in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by a penny.
Silicon Motion Technology Corporation Price and Consensus
Quarterly revenues increased to $210.7 million from the year-ago quarter’s tally of $140.4 million. The top line beat the Zacks Consensus Estimate of $207 million. Increased sales of SSD controllers, as well as eMMC and UFS controllers, on a year-over-year basis, contributed to the top-line growth. Net sales increased 11% sequentially in the second quarter.
Management noted that sales of SSD controllers increased in the range of 0-5% sequentially and 25-30% on a year-over-year basis.
eMMC+UFS (Embedded Multi-Media Card + Universal Flash Storage) sales recorded solid sequential improvement between 25% and 30% and increased 190-195% year over year.
Revenues in SSD solutions increased 20-25% sequentially but decreased 5-10% year over year.
Other Details
In the second quarter of 2024, non-GAAP gross profit was $96.8 million compared with $59.7 million in the year-ago quarter, with respective margins of 46% and 42.5%. The rise was primarily driven by higher revenues year over year.
Total operating expenses on a non-GAAP basis increased from $48 million to $62.1 million. Non-GAAP operating income improved from $11.7 million to $34.7 million, with margins of 8.3% and 16.5%, respectively.
Cash Flow & Liquidity
For the first six months of 2024, Silicon Motion generated $29.3 million of cash from operating activities compared with a cash flow of $43 million in the year-ago period.
As of Jun 30, 2024, the company had $289.2 million in cash and cash equivalents with $60.2 million of other liabilities. In the second quarter of 2024, the company’s capital expenditure totaled $10.4 million, including $6.3 million for the routine procurement of testing tools, software, design tools and other goods.
Outlook
For third-quarter 2024, the company estimates non-GAAP revenues in the range of $205-216 million. Non-GAAP gross margin is expected to be around 46-47%. Non-GAAP operating margin is anticipated to be in the band of 14.3-15.3%.
For full-year 2024, management projects non-GAAP revenues in the range of $800-$830 million. Non-GAAP gross margin is expected to be around 46-47%. Non-GAAP operating margin is anticipated to be in the band of 14.8-16.8%. Per management, the company’s new cost-effective, high-quality, and unique solutions are anticipated to scale further throughout the year.
Zacks Rank
Silicon Motion currently carries a Zacks Rank #3 (Hold).
Cogent Communications Holdings, Inc. (CCOI - Free Report) is scheduled to release second-quarter 2024 earnings on Aug 8. The Zacks Consensus Estimate for earnings is pegged at a loss of $1.02 per share, indicating a decline of 684.6% from the year-ago reported figure.
Akamai Technologies, Inc. (AKAM - Free Report) is slated to release second-quarter 2024 earnings on Aug 8. The Zacks Consensus Estimate for earnings is pegged at $1.54 per share, indicating growth of 3.4% from the year-ago reported figure.
Akamai has a long-term earnings growth expectation of 4.8%. AKAM delivered an average earnings surprise of 5.4% in the last four reported quarters.
CommScope Holding Company, Inc. (COMM - Free Report) is scheduled to release second-quarter 2024 earnings on Aug 8. The Zacks Consensus Estimate for earnings is pegged at $0.06 per share, suggesting a decline of 68.42% from the year-ago reported figure.
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Silicon Motion (SIMO) Tops Q2 Earnings & Revenue Estimates
Silicon Motion Technology Corporation (SIMO - Free Report) reported strong second-quarter 2024 results, wherein both the top and bottom lines surpassed 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 improved to $30.8 million or 91 cents per American depositary share (ADS) from $11 million or 33 cents per ADS in the prior-year quarter. Higher net sales across various end markets contributed to the year-over-year improvement in GAAP earnings.
Non-GAAP net income was $32.5 million or 96 cents per ADS compared with $12.6 million or 38 cents per ADS in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by a penny.
Silicon Motion Technology Corporation Price and Consensus
Silicon Motion Technology Corporation price-consensus-chart | Silicon Motion Technology Corporation Quote
Revenues
Quarterly revenues increased to $210.7 million from the year-ago quarter’s tally of $140.4 million. The top line beat the Zacks Consensus Estimate of $207 million. Increased sales of SSD controllers, as well as eMMC and UFS controllers, on a year-over-year basis, contributed to the top-line growth. Net sales increased 11% sequentially in the second quarter.
Management noted that sales of SSD controllers increased in the range of 0-5% sequentially and 25-30% on a year-over-year basis.
eMMC+UFS (Embedded Multi-Media Card + Universal Flash Storage) sales recorded solid sequential improvement between 25% and 30% and increased 190-195% year over year.
Revenues in SSD solutions increased 20-25% sequentially but decreased 5-10% year over year.
Other Details
In the second quarter of 2024, non-GAAP gross profit was $96.8 million compared with $59.7 million in the year-ago quarter, with respective margins of 46% and 42.5%. The rise was primarily driven by higher revenues year over year.
Total operating expenses on a non-GAAP basis increased from $48 million to $62.1 million. Non-GAAP operating income improved from $11.7 million to $34.7 million, with margins of 8.3% and 16.5%, respectively.
Cash Flow & Liquidity
For the first six months of 2024, Silicon Motion generated $29.3 million of cash from operating activities compared with a cash flow of $43 million in the year-ago period.
As of Jun 30, 2024, the company had $289.2 million in cash and cash equivalents with $60.2 million of other liabilities. In the second quarter of 2024, the company’s capital expenditure totaled $10.4 million, including $6.3 million for the routine procurement of testing tools, software, design tools and other goods.
Outlook
For third-quarter 2024, the company estimates non-GAAP revenues in the range of $205-216 million. Non-GAAP gross margin is expected to be around 46-47%. Non-GAAP operating margin is anticipated to be in the band of 14.3-15.3%.
For full-year 2024, management projects non-GAAP revenues in the range of $800-$830 million. Non-GAAP gross margin is expected to be around 46-47%. Non-GAAP operating margin is anticipated to be in the band of 14.8-16.8%. Per management, the company’s new cost-effective, high-quality, and unique solutions are anticipated to scale further throughout the year.
Zacks Rank
Silicon Motion currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Cogent Communications Holdings, Inc. (CCOI - Free Report) is scheduled to release second-quarter 2024 earnings on Aug 8. The Zacks Consensus Estimate for earnings is pegged at a loss of $1.02 per share, indicating a decline of 684.6% from the year-ago reported figure.
Akamai Technologies, Inc. (AKAM - Free Report) is slated to release second-quarter 2024 earnings on Aug 8. The Zacks Consensus Estimate for earnings is pegged at $1.54 per share, indicating growth of 3.4% from the year-ago reported figure.
Akamai has a long-term earnings growth expectation of 4.8%. AKAM delivered an average earnings surprise of 5.4% in the last four reported quarters.
CommScope Holding Company, Inc. (COMM - Free Report) is scheduled to release second-quarter 2024 earnings on Aug 8. The Zacks Consensus Estimate for earnings is pegged at $0.06 per share, suggesting a decline of 68.42% from the year-ago reported figure.