Magnachip Reports Results for Third Quarter 2024

Financial Highlights

  • Q3 consolidated revenue was $66.5 million, at the high-end of guidance range of $61.5-66.5 million.
    • Q3 standard product business revenue was up 25.9% sequentially.
  • Q3 consolidated gross profit margin of 23.3% was in-line with the mid-point of guidance range of 22.5-24.5%.
    • Q3 standard product business gross profit margin was 24.4%, up 1.3 percentage points sequentially.
  • Ended Q3 with cash of $121.1 million; and an additional non-redeemable short-term financial investment of $30 million.
  • Repurchased approximately 0.5 million shares for aggregate purchase price of $2.5 million during the quarter.

Operational Highlights

  • Broad-based sequential revenue growth in our PAS business was driven by leaner distribution channels and better-than-typical seasonality. Relative strength was more evident in industrial, computing, and consumer applications. Automotive continues to show strength with additional design wins in Japan and China.
  • Started initial DDIC production and shipments for a premium smartphone model from a leading China OEM.
  • Received a purchase order from a second leading China smartphone OEM and commenced shipments in October 2024.
  • Began sampling our new OLED driver designed with next-generation IP, including sub-pixel rendering (SPR), refined color enhancement, color filter, brightness uniformity control and more than 20% reduction in power consumption than previous generation.
  • Power IC revenue increased sequentially, driven primarily by demand for LCD TVs and OLED IT in tablets and notebooks.

SEOUL, South Korea — (BUSINESS WIRE) — October 30, 2024 — Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced financial results for the third quarter 2024.

YJ Kim, Magnachip’s CEO, commented, “Our Q3 revenue was at the high-end of guidance driven by broad-based growth in our Standard Product businesses, which is comprised of our MSS and PAS businesses. Standard Product revenue increased 25.9% sequentially and 24% year-over-year. Our discrete Power business benefited from leaner inventory in distribution channels as well as new product designs wins resulting in better-than-seasonal growth. In MSS, the strong sequential growth was due to increased demand for products targeted for China smartphone OEMs, automotive displays, and OLED IT.”

YJ Kim added, “Looking ahead, we expect our Standard Product business revenue in Q4 will modestly decline sequentially, which is better than typical seasonality experienced in past years. We reiterate our full-year guidance for double-digit growth in both MSS and PAS businesses in 2024.”

Q3 2024 Financial Highlights

In thousands of U.S. dollars, except share data

 

GAAP

 

 

Q3 2024

 

Q2 2024

 

Q/Q change

 

Q3 2023

 

Y/Y change

 

Consolidated Revenues

66,460

53,171

up

25.0

%

61,245

up

8.5

%

Standard Products Business

64,020

50,835

 

up

25.9

%

51,619

 

up

24.0

%

Mixed-Signal Solutions

16,446

 

11,595

 

up

41.8

%

10,644

 

up

54.5

%

Power Analog Solutions

47,574

 

39,240

 

up

21.2

%

40,975

 

up

16.1

%

Transitional Fab 3 foundry services (1)

2,440

 

2,336

 

up

4.5

%

9,626

 

down

74.7

%

Consolidated Gross Profit Margin

23.3

%

21.8

%

up

1.5

%pts

23.6

%

down

0.3

%pts

Standard Products Business

24.4

%

23.1

%

up

1.3

%pts

28.7

%

down

4.3

%pts

Mixed-Signal Solutions

38.7

%

34.6

%

up

4.1

%pts

28.8

%

up

9.9

%pts

Power Analog Solutions

19.4

%

19.7

%

down

0.3

%pts

28.6

%

down

9.2

%pts

Operating Loss

(11,003

)

(12,824

)

up

n/a

 

(9,235

)

down

n/a

 

Net Loss

(9,617

)

(12,997

)

up

n/a

 

(5,165

)

down

n/a

 

Basic Loss per Common Share

(0.26

)

(0.34

)

up

n/a

 

(0.13

)

down

n/a

 

Diluted Loss per Common Share

(0.26

)

(0.34

)

up

n/a

 

(0.13

)

down

n/a

 

 

 

In thousands of U.S. dollars, except share data

 

 

Non-GAAP (2)

 

 

Q3 2024

 

Q2 2024

 

Q/Q change

 

Q3 2023

 

Y/Y change

 

Adjusted Operating Loss

(9,026

)

(11,608

)

up

n/a

 

(7,064

)

down

n/a

 

Adjusted EBITDA

(4,949

)

(7,569

)

up

n/a

 

(2,735

)

down

n/a

 

Adjusted Net Loss

(12,797

)

(8,134

)

down

n/a

 

(1,591

)

down

n/a

 

Adjusted Loss per Common Share—Diluted

(0.34

)

(0.21

)

down

n/a

 

(0.04

)

down

n/a

 

___________

(1)

Following the consummation of the sale of the Foundry Services Group business and Fab 4 in Q3 2020, we provided transitional foundry services to the buyer for foundry products manufactured in our fabrication facility located in Gumi, Korea, known as “Fab 3” (“Transitional Fab 3 Foundry Services”). The contractual obligation to provide the Transitional Fab 3 Foundry Services ended August 31, 2023, and we are winding down these foundry services and have begun to convert portions of the idle capacity to PAS products during the second half of 2024. Because these foundry services during the wind-down period are still provided to the same buyer by us using our Fab 3 based on mutually agreed terms and conditions, we will continue to report our revenue from providing these foundry services and related cost of sales within the Transitional Fab 3 Foundry Services line in our consolidated statement of operations until such wind down is completed. Management believes that disclosing revenue of Transitional Fab 3 Foundry Services separately from the standard products business allows investors to better understand the results of our core standard products MSS and PAS businesses.

 
(2)

Management believes that non-GAAP financial measures, when viewed in conjunction with GAAP results, can provide a meaningful understanding of the factors and trends affecting our business and operations and assist in evaluating our core operating performance. However, such non-GAAP financial measures have limitations and should not be considered as a substitute for net loss or as a better indicator of our operating performance than measures that are presented in accordance with GAAP. A reconciliation of GAAP results to non-GAAP results is included in this press release.


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