Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue for the second quarter was $202.5 million, up 40% year-over-year.
- Gross margin was 48.2%, exceeding the long-term target range of 40% to 45%.
- ACM Research Inc (ACMR, Financial) ended the quarter with approximately $367 million in cash and time deposits.
- Revenue from ECP furnace and other technologies grew 104% in Q2, representing 19% of total revenue.
- The company has set a new long-term revenue target of $3 billion, up from the previous target of $1 billion.
Negative Points
- Revenue from advanced packaging, excluding ECP services and spares, declined by 20.4% in Q2.
- Operating expenses increased to $45.6 million from $36.3 million year-over-year.
- R&D expenses rose to $21.8 million from $19.4 million, reflecting higher personnel costs.
- Sales and marketing expenses increased to $14.1 million from $11 million.
- The company has no immediate plans to pay dividends to ACM Research Inc (ACMR) shareholders, opting to reinvest earnings back into the business.
Q & A Highlights
Q: For the second half, your shipments appear to be increasing. Can you talk about maybe what percent or give us some sense of how much of that shipment base is outside of China versus China? And how that will increase in the mix over time?
A: We expect our shipments to be a bit higher in the second half versus the first half of the year. The substantial majority of our shipments will still be within China, with some shipments outside, but the majority will be to the Mainland China market in the back half of the year. - Mark Mckechnie, CFO
Q: Are you already shipping into Korea fabs for Korean customers? And if not, what is the timing of that starting?
A: We are working with Korean customers, but as of Q2, we have no shipments going to Korea. We see opportunities, including R&D tools beyond cleaning products, and hope to start shipping in the second half of this year, especially for HBM products. - Hui Wang, CEO
Q: Can you talk about your opportunity in the high bandwidth memory supply chain in Taiwan and who the competition is in that market?
A: We are engaging with customers in Taiwan and the US for advanced packaging tools. We have received our first coater developer order from a US advanced packaging house and are engaging with multiple customers in Taiwan. We believe our new panel products will address new trends and bring revenue growth potential. - Hui Wang, CEO
Q: Can you clarify if the shipment growth comment is half-over-half or sequential quarter-over-quarter?
A: It is a half-over-half comment. We expect shipments to be higher in the second half than in the first half. - Mark Mckechnie, CFO
Q: Any thoughts on starting a dividend policy with ACM Research investors, especially with the lock-up expiry of ACM Shanghai shares?
A: We currently reinvest the dividends received from ACM Shanghai into marketing, R&D, and other business purposes. We believe this is in the best interest of ACM USA investors rather than distributing dividends. - Hui Wang, CEO and Mark Mckechnie, CFO
Q: Can you give more color on the evaluations going on outside of China in terms of tools and countries?
A: We have cleaning tools being evaluated by US customers, including SAPS cleaning and backside/bevel cleaning. We also have evaluations in Europe and Korea for copper plating tools, and we are engaging with customers in Singapore and the US for new cleaning capabilities. - Hui Wang, CEO
Q: Have you evaluated the impact of potential new export control restrictions on Chinese companies?
A: We are monitoring the situation closely and will follow all laws. Any new regulations would impact not only ACM but also many US companies. We will adjust based on new regulations. - Hui Wang, CEO and Mark Mckechnie, CFO
Q: Is there any potential impact on the supply chain if new export control rumors come to fruition?
A: Our supply chain is currently stable. We are using multiple supply chains, including non-US parts, and qualifying local suppliers to secure our supply chain. We have plans to quickly switch to alternative choices if needed. - Hui Wang, CEO
Q: Any update on the private offering with ACM Shanghai shares announced in January?
A: We are in the final formal application process, which may take six to eight months or longer. We expect to get permission by mid-next year and will choose the right time for the secondary offering based on market conditions. - Hui Wang, CEO
Q: Are there any new products we can look forward to in the second half of this year or early 2025?
A: We announced two new products in Q2 and will continue exploring new products. We are focused on our core technologies and products, including cleaning, copper plating, furnace, ALD, track, and PECVD. - Hui Wang, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
