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ACM Research Reports First Quarter 2024 Results

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ACM Research reported robust financial results for the first quarter of 2024, showcasing impressive revenue growth of 105% driven by mature node spending, new products, and market share gains. The company's President and CEO, Dr. David Wang, expressed satisfaction with the record shipments and strong profitability. ACM anticipates further growth in 2024 due to its expanding product portfolio and global footprint. The company maintained its revenue guidance range of $650 million to $725 million for fiscal year 2024. ACM also highlighted key operating highlights, including increased shipments, introduction of new products like Frame Wafer Cleaning Tool, and strong financial performance.

Positive
  • Robust revenue growth of 105% in the first quarter of 2024 driven by mature node spending, new product contributions, and market share gains.

  • Record shipments and strong profitability highlighted by the President and CEO, Dr. David Wang.

  • Maintaining revenue guidance range of $650 million to $725 million for fiscal year 2024, showcasing confidence in future growth.

  • Introduction of innovative products like Frame Wafer Cleaning Tool expanding the advanced packaging portfolio.

Negative
  • Operating expenses increased by 73.1% compared to the previous year, impacting the overall financial performance.

  • Unrealized loss on short-term investments amounted to $2.6 million, affecting net income.

  • A decrease in cash and cash equivalents from $304.5 million to $288.3 million between December 2023 and March 2024 may raise concerns about liquidity.

Insights

The reported 105% revenue growth in the first quarter for ACM Research is a significant indicator of the company's strong performance and traction in the market, particularly within the semiconductor wafer processing space. The growth narrative is underpinned by a mix of mature node spending by customers in China, market share gains and a broadening product portfolio, which suggests a robust demand environment and successful execution of the company's expansion strategy.

ACM's gross margin outperformance relative to its long-term business model is impressive, indicating efficiency in operations and a favorable product mix. However, investors should note the slight decrease in margins compared to the previous year, which could be indicative of changing cost dynamics or product mix shifts that may warrant further scrutiny.

The increase in operating income and net income, both GAAP and non-GAAP, reflects operational leverage as the company scales. The significant difference between GAAP and non-GAAP figures due to stock-based compensation and unrealized losses on investments suggests that these items are worth monitoring as they can materially impact the company's reported profitability. The company's earnings per share (EPS) have demonstrated a notable increase, which should be of interest to shareholders tracking earnings growth.

ACM's guidance maintenance may be seen as a sign of management's confidence in the company's trajectory, albeit it's important for investors to consider the challenges posed by international trade policies, supply chain constraints and other market variables. The liquidity position, as evidenced by cash and equivalents, appears robust, although a slight decrease from the previous quarter could prompt questions regarding cash flow management and investment strategies.

The launch of the Frame Wafer Cleaning Tool represents ACM's ongoing innovation and commitment to the advanced packaging market, a high-growth area within semiconductor manufacturing. The company's tool, which includes an environmentally-friendly solvent reclamation system, not only signals ACM's R&D capabilities but also its responsiveness to industry trends favoring sustainability.

The focus on gaining market share in cleaning equipment, particularly in technologies like Tahoe, single wafer high temperature SPM and supercritical CO2 dry products, indicates ACM's strategic positioning in critical segments of the semiconductor equipment market. This is complemented by the strength in Electro-Chemical Plating (ECP) and customer adoption of furnace products, which further diversifies the company's revenue streams.

ACM's expanded global footprint, with initial production commencing in Lingang, Shanghai and ongoing investments in U.S. and Korea operations, highlights the company's strategic efforts to mitigate geopolitical risks and cater to a global customer base. This geographical diversification is crucial, considering the current volatile international trade environment impacting the semiconductor sector.

FREMONT, Calif., May 08, 2024 (GLOBE NEWSWIRE) -- ACM Research, Inc. (“ACM”) (NASDAQ: ACMR), a leading supplier of wafer processing solutions for semiconductor and advanced wafer-level packaging applications, today reported financial results for its first quarter ended March 31, 2024.

“I am pleased with our first quarter results, a solid start for 2024. We delivered 105% revenue growth, record shipments, and strong profitability," said ACM’s President and Chief Executive Officer, Dr. David Wang. “Our results demonstrate continued spending on mature nodes by our mainland China customers, contribution from new products, and market share gains at both existing and new customers.”

Dr. Wang continued, “We anticipate growth for 2024 as a result of our broadening product portfolio and expanding global footprint. We expect additional market share gains in cleaning with increased customer traction for Tahoe, single wafer high temperature SPM, and supercritical CO2 dry products, continued strength in ECP, and accelerating customer adoption for our furnace products. We expect to begin initial production at our facility in Lingang, Shanghai this year, and we continue to invest in our U.S. and Korea operations to support the global market opportunity.”

 Three Months Ended March 31,
 GAAP Non-GAAP(1)
  2024   2023   2024   2023 
 (dollars in thousands, except EPS)
Revenue$152,191  $74,256  $152,191  $74,256 
Gross margin 52.0%  53.8%  52.5%  54.0%
Income from operations$25,232  $8,862  $39,801  $10,930 
Net income attributable to ACM Research, Inc.$17,433  $7,145  $34,597  $9,867 
Basic EPS$0.28  $0.12  $0.56  $0.17 
Diluted EPS$0.26  $0.11  $0.52  $0.15 


(1)Reconciliations to U.S. generally accepted accounting principles (“GAAP”) financial measures from non-GAAP financial measures are presented below under “Reconciliation of GAAP to Non-GAAP Financial Measures.” Non-GAAP financial measures exclude stock-based compensation and, with respect to net income attributable to ACM Research, Inc. and basic and diluted earnings per share, also exclude unrealized loss on short-term investments.
  

Outlook

ACM is maintaining its revenue guidance range of $650 million to $725 million for fiscal year 2024. This expectation is based on ACM management’s current assessment of the continuing impact from international trade policy, together with various expected spending scenarios of key customers, supply chain constraints, and the timing of acceptances for first tools under evaluation in the field, among other factors.

Operating Highlights and Recent Announcements

  • Shipments. Total shipments in the first quarter of 2024 were $245 million, up 175% from the first quarter of 2023. Total shipments include deliveries for revenue in the quarter and deliveries of first tool systems awaiting customer acceptance for potential revenue in future quarters.
  • Expanded Advanced Packaging Portfolio with Introduction of Frame Wafer Cleaning Tool. We introduced our Frame Wafer Cleaning Tool for advanced packaging. The tool effectively cleans semiconductor wafers during the post-debonding cleaning process. The Frame Wafer Cleaning Tool also includes an innovative solvent reclamation system that provides environmental and cost benefits. We have also successfully completed the installation and qualification of the first tool with a major Chinese manufacturer.

First Quarter 2024 Financial Summary

Unless otherwise noted, the following figures refer to the first quarter of 2024 and comparisons are with the first quarter of 2023.

  • Revenue was $152.2 million, up 105.0%, reflecting higher sales of single wafer cleaning, Tahoe and semi-critical cleaning equipment and advanced packaging (excluding ECP), and services and spares.
  • Gross margin was 52.0% versus 53.8%. Non-GAAP gross margin, which excludes stock-based compensation, was 52.5% versus 54.0%. Gross margin exceeded ACM’s long-term business model range of 40% to 45%. ACM expects gross margin to vary from period to period due to a variety of factors, such as product mix, currency impacts and sales volume.
  • Operating expenses were $53.9 million, an increase of 73.1%. Operating expenses as a percentage of revenue decreased to 35.4% from 41.9%. Non-GAAP operating expenses, which exclude the effect of stock-based compensation, were $40.1 million, up 37.4%. Non-GAAP operating expenses as a percentage of revenue decreased to 26.3% from 39.3%.
  • Operating income was $25.2 million, up from $8.9 million. Operating margin was 16.6% versus 11.9%. Non-GAAP operating income, which excludes the effect of stock-based compensation, was $39.8 million, up from $10.9 million. Non-GAAP operating margin, which excludes stock-based compensation, was 26.2% versus 14.7%.
  • Unrealized loss on short-term investments was $2.6 million. The loss reflects the change in market value of the investments by ACM’s principal operating subsidiary, ACM Research (Shanghai), Inc., in short-term investments. The value is marked-to-market quarterly and is excluded in the non-GAAP financial metrics.
  • Income tax expense was $4.4 million, compared to $2.9 million.
  • Net income attributable to ACM Research, Inc. was $17.4 million, up from $7.1 million. Non-GAAP net income attributable to ACM Research, Inc., which excludes the effect of stock-based compensation and unrealized loss on short-term investments, was $34.6 million, up from $9.9 million.
  • Net income per diluted share attributable to ACM Research, Inc. was $0.26, compared to $0.11. Non-GAAP net income per diluted share, which excludes the effect of stock-based compensation and unrealized loss on short-term investments, was $0.52, up from $0.15.
  • Cash and cash equivalents, plus restricted cash and short-term and long-term time deposits were $288.3 million at March 31, 2024, versus $304.5 million at December 31, 2023.

Conference Call Details

A conference call to discuss results will be held on Wednesday, May 8, 2024, at 8:00 a.m. Eastern Time (8:00 p.m. China Time). To join the conference call via telephone, participants must use the following link to complete an online registration process. Upon registering, each participant will receive email instructions to access the conference call, including dial-in information and a PIN number allowing access to the conference call. This pre-registration process is designed by the operator to reduce delays due to operator congestion when accessing the live call.

Online Registration: https://register.vevent.com/register/BI7d8a11ab6f694bde910596cd97b8276d

Participants who have not pre-registered may join the webcast by accessing the link at ir.acmrcsh.com/events.

A live and archived webcast will be available on the Investors section of the ACM website at www.acmrcsh.com.

Use of Non-GAAP Financial Measures

ACM presents non-GAAP gross margin, operating expenses, operating income, net income attributable to ACM Research, Inc. and basic and diluted earnings per share as supplemental measures to GAAP financial measures regarding ACM’s operational performance. These supplemental measures exclude the impact of stock-based compensation, which ACM does not believe is indicative of its core operating results. In addition, non-GAAP net income attributable to ACM Research, Inc. and basic and diluted earnings per share exclude the effect of stock-based compensation and unrealized loss on short-term investments, which ACM also believes are not indicative of its core operating results. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided below under “Reconciliation of GAAP to non-GAAP Financial Measures.”

ACM believes these non-GAAP financial measures are useful to investors in assessing its operating performance. ACM uses these financial measures internally to evaluate its operating performance and for planning and forecasting of future periods. Financial analysts may focus on and publish both historical results and future projections based on the non-GAAP financial measures. ACM also believes it is in the best interests of investors for ACM to provide this non-GAAP information.

While ACM believes these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures may not be reported by competitors, and they may not be directly comparable to similarly titled measures of other companies due to differences in calculation methodologies. The non-GAAP financial measures are not an alternative to GAAP information and are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures. They should be used only as a supplement to GAAP information and should be considered only in conjunction with ACM’s consolidated financial statements prepared in accordance with GAAP.

Forward-Looking Statements

Certain statements contained in this press release are not historical facts and may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “plans,” “expects,” “believes,” “anticipates,” “designed,” and similar words are intended to identify forward-looking statements. Forward-looking statements are based on ACM management’s current expectations and beliefs, and involve a number of risks and uncertainties that are difficult to predict and that could cause actual results to differ materially from those stated or implied by the forward-looking statements. A description of certain of these risks, uncertainties and other matters can be found in filings ACM makes with the U.S. Securities and Exchange Commission, all of which are available at www.sec.gov. Because forward-looking statements involve risks and uncertainties, actual results and events may differ materially from results and events currently expected by ACM. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. ACM undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in its expectations with regard to these forward-looking statements or the occurrence of unanticipated events.

About ACM Research, Inc.

ACM develops, manufactures and sells semiconductor process equipment for single-wafer or batch wet cleaning, electroplating, stress-free polishing and thermal processes that are critical to advanced semiconductor device manufacturing, as well as wafer-level packaging. ACM is committed to delivering customized, high performance, cost-effective process solutions that semiconductor manufacturers can use in numerous manufacturing steps to improve productivity and product yield.

© ACM Research, Inc. The ACM Research logo is a trademark of ACM Research, Inc. For convenience, this trademark appears in this press release without a ™ symbol, but that practice does not mean that ACM will not assert, to the fullest extent under applicable law, its rights to the trademarks.

For investor and media inquiries, please contact:

In the United States:The Blueshirt Group
Steven C. Pelayo, CFA
+1 (360) 808-5154
steven@blueshirtgroup.co
  
In China:The Blueshirt Group Asia
Gary Dvorchak, CFA
+86 (138) 1079-1480
gary@blueshirtgroup.co
  


ACM RESEARCH, INC.
Condensed Consolidated Balance Sheets
 
  
 March 31, 2024 December 31, 2023
 (Unaudited)  
 (In thousands)
Assets   
Current assets:   
Cash and cash equivalents$211,305  $182,090 
Restricted cash 808   1,083 
Short-term time deposits 48,364   80,524 
Short-term investment 18,648   21,312 
Accounts receivable, net 296,371   283,186 
Other receivables 51,316   40,065 
Inventories, net 581,140   545,395 
Advances to related party 1,338   2,432 
Prepaid expenses 20,066   20,023 
Total current assets 1,229,356   1,176,110 
Property, plant and equipment, net 218,822   201,848 
Land use right, net 8,305   8,367 
Operating lease right-of-use assets, net 6,498   7,026 
Intangible assets, net 2,803   2,538 
Long-term time deposits 27,841   40,818 
Deferred tax assets 21,360   20,271 
Long-term investments 31,293   27,880 
Other long-term assets 10,471   6,050 
Total assets$1,556,749  $1,490,908 
Liabilities and Equity   
Current liabilities:   
Short-term borrowings$54,706  $31,335 
Current portion of long-term borrowings 6,549   6,783 
Related party accounts payable 16,243   11,407 
Accounts payable 135,499   141,814 
Advances from customers 182,547   181,368 
Deferred revenue 4,405   3,687 
Income taxes payable 11,403   6,401 
FIN-48 payable 12,131   12,149 
Other payables and accrued expenses 107,098   102,951 
Current portion of operating lease liability 2,668   2,764 
Total current liabilities 533,249   500,659 
Long-term borrowings 53,408   53,952 
Long-term operating lease liability 3,830   4,262 
Other long-term liabilities 5,469   5,873 
Total liabilities 595,956   564,746 
Commitments and contingencies    
Equity:   
Stockholders’ equity:   
Class A Common stock 6   6 
Class B Common stock 1   1 
Additional paid-in capital 646,800   629,845 
Retained earnings 174,260   156,827 
Statutory surplus reserve 30,060   30,060 
Accumulated other comprehensive loss (54,925)  (49,349)
Total ACM Research, Inc. stockholders’ equity 796,202   767,390 
Non-controlling interests 164,591   158,772 
Total equity 960,793   926,162 
Total liabilities and equity$1,556,749  $1,490,908 

 

ACM RESEARCH, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
 
 Three Months Ended March 31,
  2024   2023 
 (Unaudited)
 (In thousands, except share and per share data)
Revenue$152,191  $74,256 
Cost of revenue 73,070   34,270 
Gross profit 79,121   39,986 
Operating expenses:   
Sales and marketing 14,173   9,337 
Research and development 23,918   14,029 
General and administrative 15,798   7,758 
Total operating expenses 53,889   31,124 
Income from operations 25,232   8,862 
Interest income 1,774   1,785 
Interest expense (783)  (695)
Realized gain from sale of short-term investments 273   3,994 
Unrealized loss on short-term investments (2,595)  (654)
Other income (expense), net 3,080   (1,418)
Loss from equity method investments (520)  (32)
Income before income taxes 26,461   11,842 
Income tax expense (4,369)  (2,879)
Net income 22,092   8,963 
Less: Net income attributable to non-controlling interests 4,659   1,818 
Net income attributable to ACM Research, Inc.$17,433  $7,145 
Comprehensive income (loss):   
Net income 22,092   8,963 
Foreign currency translation adjustment, net of tax (6,829)  9,423 
Comprehensive Income 15,263   18,386 
Less: Comprehensive income attributable to non-controlling interests 3,406   3,462 
Comprehensive income attributable to ACM Research, Inc.$11,857  $14,924 
    
Net income attributable to ACM Research, Inc. per common share:   
Basic$0.28  $0.12 
Diluted$0.26  $0.11 
    
Weighted average common shares outstanding used in computing per share amounts:  
Basic 61,367,184   59,736,764 
Diluted 66,242,321   65,058,777 

 

ACM RESEARCH, INC.
Total Revenue by Product Category and by Region
   
`Three Months Ended
March 31,
 20242023
 (Unaudited)
 ($ in thousands)
Single wafer cleaning, Tahoe and semi-critical cleaning equipment$109,470$36,614
ECP (front-end and packaging), furnace and other technologies 25,800 26,598
Advanced packaging (excluding ECP), services & spares 16,921 11,044
Total Revenue by Product Category$ 152,191$ 74,256
   
  2023 2022
Mainland China$152,135$72,458
Other Regions 56 1,798
Total Revenue by Region$ 152,191$ 74,256
 

ACM RESEARCH, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures

As described under “Use of Non-GAAP Financial Measures” above, ACM presents non-GAAP gross margin, operating expenses, operating income, net income attributable to ACM Research, Inc., and basic and diluted earnings per share as supplemental measures to GAAP financial measures, each of which excludes stock-based compensation (“SBC”) from the equivalent GAAP financial line items. In addition, non-GAAP net income attributable to ACM Research, Inc., and basic and diluted earnings per share exclude unrealized loss on short-term investments. The following tables reconcile gross margin, operating expenses, operating income, net income attributable to ACM Research, Inc., and basic and diluted earnings per share to the related non-GAAP financial measures:

 Three Months Ended March 31,
  2024  2023 
 ActualSBCOther non-operating adjustmentsAdjustedActualSBCOther non-operating adjustmentsAdjusted
(GAAP)(Non-GAAP)(GAAP)(Non-GAAP)
 (In thousands)
         
Revenue$152,191 $- $- $152,191 $74,256 $- $- $74,256 
Cost of revenue (73,070) (781) -  (72,289) (34,270) (125) -  (34,145)
Gross profit 79,121  (781) -  79,902  39,986  (125) -  40,111 
Gross margin 52.0% 0.5% -  52.5% 53.8% 0.2% -  54.0%
Operating expenses:        
Sales and marketing (14,173) (3,027) -  (11,146) (9,337) (431) -  (8,906)
Research and development (23,918) (4,503) -  (19,415) (14,029) (701) -  (13,328)
General and administrative (15,798) (6,258) -  (9,540) (7,758) (811) -  (6,947)
Total operating expenses (53,889) (13,788) -  (40,101) (31,124) (1,943) -  (29,181)
Income (loss) from operations$25,232 $(14,569)$- $39,801 $8,862 $(2,068)$- $10,930 
Unrealized loss on short-term investments (2,595) -  (2,595) -  (654) -  (654) - 
Net income (loss) attributable to ACM Research, Inc.$ 17,433 $ (14,569)$ (2,595)$ 34,597 $ 7,145 $ (2,068)$ (654)$ 9,867 
Basic EPS$0.28   $0.56 $0.12   $0.17 
Diluted EPS$0.26   $0.52 $0.11   $0.15 


FAQ

What was ACM Research's revenue growth in the first quarter of 2024?

ACM Research reported revenue growth of 105% in the first quarter of 2024.

What is ACM Research's revenue guidance range for fiscal year 2024?

ACM Research is maintaining its revenue guidance range of $650 million to $725 million for fiscal year 2024.

What new product did ACM Research introduce for advanced packaging?

ACM Research introduced the Frame Wafer Cleaning Tool for advanced packaging.

What was the gross margin for ACM Research in the first quarter of 2024?

ACM Research's gross margin was 52.0% in the first quarter of 2024.

Who is ACM Research's President and CEO?

Dr. David Wang is the President and CEO of ACM Research.

ACM Research, Inc.

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