Q3 2024 Revenues and EPS both Surpassed Guidance while Gross Margin In Line With Guidance Range Issued on Aug. 8, 2024
Company Q4 2024 Guidance: Revenues to be flat to slightly down QoQ,
Gross Margin is Expected to be flat to slightly up QoQ, Profit per diluted ADS to be 9.3 Cents to 11.0 Cents
- Q3 2024 revenues were $222.4M, a decrease of 7.2% QoQ, yet significantly exceeded the guidance range of a 12.0% to 17.0% decrease QoQ. The better-than-expected financial results stemmed primarily from stronger order momentum in automotive, tablet and Tcon product lines. Q3 GM reached 30.0%, in line with guidance of around 30%, but down from 32.0% in Q2, mainly a result of unfavorable product mix
- Q3 2024 after-tax profit was $13.0M, or 7.4 cents per diluted ADS, considerably above the guidance range of 1.5 cents to 4.5 cents
- Himax Q4 2024 revenues to be flat to slightly down QoQ. GM to be flat to slightly up QoQ. Profit per diluted ADS to be in the range of 9.3 cents to 11.0 cents
- Looking ahead, Himax is confident in the outlook for key areas, namely automotive, AI, WLO, and OLED, expecting these product lines to drive significant business growth
- Himax Q3 automotive driver sales largely outperformed guidance, primarily fueled by rush orders from Himax’s Chinese panel customers shortly after Q2 earnings call on the backdrop of Chinese government's renewed trade-in stimulus announcement made in mid-August, as part of their efforts to further boost automobile consumption
- Himax FY24 automotive driver IC sales are projected to grow high-teens YoY, significantly outperforming global automotive growth. Himax remains optimistic in its long-term automotive IC outlook, particularly in LCD TDDI, OLED, and Tcon, all of which are relatively new and cutting-edge technologies for automotive display
- Himax continues to strengthen its automotive TDDI market dominance with cumulative shipments already exceeding 70M units, far surpassing those of its competitors. Q4 automotive TDDI sales are set to surpass DDIC sales for the first time
- Himax Q4 automotive Tcon business is expected to achieve high-teens growth QoQ, driven by secured design-win shipments. FY24 automotive Tcon business is projected to grow over 80% YoY, contributing to nearly 4% of total sales
- Himax is confident in its collaboration with FOCI on the LPO/CPO business, making decent progress in the initial small-scale production of the first-generation solution. Himax and FOCI, along with world-leading AI semiconductor companies and foundry partner, have begun new technology development for future generation products. Himax believes this will create new revenue streams and make a significant contribution to Company’s total revenue and profit in the coming years
- The Emergence of AI PC is prompting display upgrades towards OLED displays and displays equipped with touch features. Himax is well positioned to capitalize on this trend, offering a comprehensive range of NB IC products, including state-of-the-art in-cell touch TDDI for LCD NB, on-cell touch control for OLED NB and next-gen eDP 1.5 display interface for Tcon, applicable to both LCD and OLED panels
TAINAN, Taiwan, Nov. 07, 2024 (GLOBE NEWSWIRE) -- Himax Technologies, Inc. (Nasdaq: HIMX) (“Himax” or “Company”), a leading supplier and fabless manufacturer of display drivers and other semiconductor products, announced its financial results for the third quarter 2024 ended September 30, 2024.
“Looking ahead to Q4, the macro environment remains challenging. Against this backdrop, we continue to strictly manage expenses and implement various cost optimization measures, including enhancing manufacturing and operational efficiency, as well as leveraging a diverse range of vendors in foundries and backend suppliers. Looking ahead, while the global economy still looks uncertain, we are confident in the business outlook of several key areas, namely automotive, AI, WLO, and OLED, and expect these product lines to drive significant growth of our business,” said Mr. Jordan Wu, President and Chief Executive Officer of Himax.
“In terms of our WLO business, we are confident in our collaboration with FOCI on the LPO/CPO business where I am pleased to share that we are making decent progress in the initial small-scale production of the first-generation solution. Moreover, Himax and FOCI, along with world-leading AI semiconductor companies and foundry partner, have begun new technology development for future generation products. We believe this will create new revenue streams for Himax and make a significant contribution to our total revenue and profit in the coming years,” concluded Mr. Jordan Wu.
Third Quarter 2024 Financial Results
Himax net revenues registered $222.4 million, a decrease of 7.2% sequentially, yet significantly exceeded its guidance range of a 12% to 17% decrease. Gross margin came in at 30.0%, in-line with its guidance of around 30%, but down from 32.0% in the previous quarter and 31.4% in the same period last year. The sequential decline was a result of unfavorable product mix. Q3 profit per diluted ADS was 7.4 cents, considerably above the guidance range of 1.5 cents to 4.5 cents due to better-than-expected revenues.
Revenue from large display drivers came in at $30.7 million, reflecting a sequential decrease of 21.2%. The decrease was primarily attributed to weaker monitor and TV IC sales due to customers’ de-stocking amid challenging market conditions following substantial Q2 replenishment for shopping festivals. In contrast, notebook IC sales increased notably, resulting from rush orders for legacy products from leading panel customers. Sales of large panel driver ICs accounted for 13.8% of total revenues for the quarter, compared to 16.3% last quarter and 18.3% a year ago.
Small and medium-sized display driver segment totaled $155.4 million, a decline of 2.2% sequentially but significantly better than guidance of a low-teens decline, thanks to stronger-than-expected sales in the automotive and tablet markets. In Q3, automotive driver sales, which include both traditional DDIC and TDDI, experienced a mid-single digit decrease, yet largely outperformed Company’s expectation of a high teens decline. This better-than-expected result was primarily fueled by rush orders from Chinese panel customers shortly after Himax’s last earnings call on the backdrop of the Chinese government's renewed trade-in stimulus announcement made in mid-August, as part of their efforts to further boost automobile consumption. Himax’s automotive business, comprising drivers, Tcon, and OLED sales, remained the largest revenue contributor in the third quarter, representing nearly half of total sales. Meanwhile, Q3 tablet IC sales also exceeded guidance of a sequential decline, with sales slightly up from last quarter, fueled by rush orders from leading end customers. Q3 smartphone IC sales increased a decent double-digit sequentially, thanks to new product launches of leading phone makers. The small and medium-sized driver IC segment accounted for 69.9% of total sales for the quarter, compared to 66.3% in the previous quarter and 67.6% a year ago.
Third quarter revenues from its non-driver business reached $36.3 million, a decline of 13.1% from the previous quarter. This decrease was primarily driven by a double-digit sequential decline in Tcon sales, particularly for monitor application, as customers pulled forward their inventory purchases in the prior quarter anticipating strong sales during the shopping festivals. However, automotive Tcon sales saw an impressive sequential increase of over 30%, as Himax’s solutions, especially the market leading local dimming Tcon, continue to be rapidly adopted by major panel manufacturers, Tier 1 suppliers, and automotive manufacturers worldwide. In the third quarter, Himax’s Tcon business accounted for over 9% of total sales, with notable contributions from automotive Tcon, representing almost half of Tcon sales, supported by steady growth with well over one hundred secured design-win projects. Non-driver products accounted for 16.3% of total revenues, as compared to 17.4% in the previous quarter and 14.1% a year ago.
Operating expenses for the third quarter were $60.8 million, an increase of 28.4% from the previous quarter and a decline of 4.7% from a year ago. The sequential increase stemmed primarily from the expense for annual bonus compensation which the Company awards employees at the end of September each year, typically resulting in higher Q3 employee compensation expense compared to other quarters of the year. The year-over-year decrease was mainly due to a decline in employee bonus compensation as the amortized portion of prior year’s bonuses for last year was higher than that for this year. As a reminder, Himax grants annual bonuses to employees at the end of September each year, including RSU and cash awards based on the expected profit for the full year. Himax’s annual bonus compensation grant for 2024 was $12.5 million, in line with guidance, out of which $11.2 million, was immediately vested and expensed in the third quarter. In comparison, the annual bonuses for 2023 and 2022 were $10.4 million and $39.6 million respectively, of which $9.7 million and $18.5 million were vested and expensed immediately. To further elaborate, Himax’s Q3 bonus expense includes two portions. First, $11.2 million was the allocation for the immediately vested and recognized portion of the current year's bonus grant. Second, $2.7 million was expensed for the amortized tranches of prior years' bonuses, compared to $2.8 million last quarter and $6.2 million a year ago. Amid ongoing macroeconomic challenges, Himax is strictly enforcing budget and expense controls, with full-year 2024 OPEX projected to decline mid-single digit compared to last year.
