ACM Research Reports First Quarter 2024 Results
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.
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.
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
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
Operating Highlights and Recent Announcements
- Shipments. Total shipments in the first quarter of 2024 were
$245 million , up175% 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 , up105.0% , 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% versus53.8% . Non-GAAP gross margin, which excludes stock-based compensation, was52.5% versus54.0% . Gross margin exceeded ACM’s long-term business model range of40% to45% . 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 of73.1% . Operating expenses as a percentage of revenue decreased to35.4% from41.9% . Non-GAAP operating expenses, which exclude the effect of stock-based compensation, were$40.1 million , up37.4% . Non-GAAP operating expenses as a percentage of revenue decreased to26.3% from39.3% . - Operating income was
$25.2 million , up from$8.9 million . Operating margin was16.6% versus11.9% . 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, was26.2% versus14.7% . - 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, | |||
2024 | 2023 | |||
(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 | |||||||||||||||||||||||
Actual | SBC | Other non-operating adjustments | Adjusted | Actual | SBC | Other non-operating adjustments | Adjusted | |||||||||||||||||
(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
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