Nova Reports First Quarter 2024 Financial Results
Nova (Nasdaq: NVMI) reported strong financial results for the first quarter of 2024, with revenue reaching $141.8 million, a 6% increase QoQ, and GAAP net income of $36.9 million. Non-GAAP net income was a record $44.6 million, reflecting the company's robust operational model and continued market traction for its innovative technologies. The service business grew by 13% YoY, driven by expanding tool life extensions. Memory product revenue share increased to 40%, led by demand for advanced DRAM and HBM solutions. Gross margin improved to 59% while operating expenses increased to $46.0 million. Management provided a positive outlook for the second quarter, projecting revenue of $144-$152 million and GAAP EPS of $1.07-$1.21.
Strong revenue growth of 6% QoQ, reaching $141.8 million in the first quarter of 2024.
GAAP net income of $36.9 million and a record non-GAAP net income of $44.6 million.
Service business expanded by 13% YoY, driven by increasing tool life extensions.
Memory product revenue share increased to 40% due to demand for advanced DRAM and HBM solutions.
Improved gross margin to 59% and provided a positive financial outlook for the second quarter.
GAAP net income decreased by 4% QoQ to $36.9 million.
Operating expenses increased to $46.0 million in the first quarter of 2024.
Insights
Examining Nova's Q1 2024 financial results reveals several indicators of the company's health and trajectory. A quarterly revenue increase of
The company's performance in diverse markets, impressive gross margin growth to
Nova's ability to exceed guidance in both revenue and profit is laudable, revealing a robust operational model and commanding presence in the semiconductor equipment sector. The emphasis on the adoption of Nova's state-of-the-art portfolio by leading customers showcases the company's innovation and relevance in current and future technological landscapes. With semiconductors being the backbone of numerous industries, Nova's continued R&D and resultant innovations like Elipson and Metrion may signal growth prospects and the ability to retain a technological edge. Investors should appreciate the long-term significance of R&D investments manifesting as market-ready products, especially in a sector driven by perpetual innovation. Additionally, the rising need for advanced packaging solutions correlates with industry trends towards miniaturization and multifunctionality in devices, presenting another avenue for growth that Nova seems well-positioned to exploit.
REHOVOT,
First Quarter 2024 Highlights:
- Quarterly revenue of
$141.8 million 6% QoQ, exceeding the high end of the Company guidance of$140 million - GAAP net income of
$36.9 million $1.15 4% QoQ, exceeding the high end of the Company guidance of$1.12 - Record Non-GAAP net income of
$44.6 million $1.39 2% QoQ, exceeding the high end of the Company guidance of$1.33 - Record operating and free cash flow.
- Continued adoption of Nova's innovative portfolio by leading customers for cutting-edge applications in logic, memory, and advanced packaging.
- Service business continued to expand, growing
13% year over year, driven by increasing utilization rates and tool life extensions. - Memory product revenue share increased to
40% , driven by advanced DRAM and HBM demand.
GAAP Results (K)
Q1 2024 | Q4 2023 | Q1 2023 | |
Revenues | |||
Net Income | |||
Earnings per Diluted Share |
Non-GAAP Results (K)
Q1 2024 | Q4 2023 | Q1 2023 | |
Net Income | |||
Earnings per Diluted Share | |||
A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements included in |
Management Comments
"Our results this quarter exceeded the high end of the guidance we provided in revenue and profit, driven by increased demand for our state-of-the-art portfolio, and supported by a robust operational model," said Gaby Waisman, President and CEO. "Our performance was bolstered by diverse exposure to opportunities across markets, territories, customers, and technologies, which include the transition to Gate-All-Around, rising need for advanced packaging solutions, and a healthy demand for mature nodes. Our Chemical Metrology division consistently delivers solid results, penetrating multiple HBM customers. As we anticipate the transition to the most advanced technology nodes, we saw an increase in market traction for our new technologies, Elipson and Metrion, with multiple evaluations underway at various customers."
2024 Second Quarter Financial Outlook
Management provided an outlook for the second quarter, the period ending June 30, 2024. Based on current estimates, management expects:
$144 million $152 million $1.07 $1.21 $1.27 $1.42
2024 First Quarter Results
Total revenues for the first quarter of 2024 were
Gross margin in the first quarter of 2024 was
Operating expenses in the first quarter of 2024 were
On a GAAP basis, the Company reported net income of
On a non-GAAP basis, the Company reported net income of
Conference Call Information
Nova will host a conference call today, May 09, 2024, at 8:30 a.m. Eastern Time, to discuss the Company's first quarter 2024 financial results and outlook. To attend the conference call, please dial one of the following teleconferencing numbers. Please begin by placing your calls five minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.
INTERNATIONAL Dial-in Number: 1-412-317-0519
At:
8:30 a.m. Eastern Time
5:30 a.m. Pacific Time
3:30 p.m. Israel Time
The conference call will also be webcast live from a Link on Nova's website at https://www.novami.com/investors/events/.
A replay of the conference call will be available from May 9, 2024, at 11:30 a.m. Eastern Time until May 16, 2024, at 11:59 p.m. Eastern Time. To access the replay, please dial one of the following numbers:
Replay Dial-in
Replay Dial-in INTERNATIONAL: 1-412-317-0088
Replay Pin Number: 6529075
A replay will also be available for 90 days on Nova's website link at https://www.novami.com/investors/events/.
About Nova
Nova is a leading innovator and key provider of material, optical and chemical metrology solutions for advanced process control in semiconductor manufacturing. Nova delivers continuous innovation by providing state-of-the-art, high-performance metrology solutions for effective process control throughout the semiconductor fabrication lifecycle. Nova's product portfolio, which combines high-precision hardware and cutting-edge software, provides its customers with deep insight into developing and producing the most advanced semiconductor devices. Nova's unique capability to deliver innovative solutions enables its customers to improve performance, enhance product yields and accelerate time to market. Nova acts as a partner to semiconductor manufacturers from its offices worldwide. Additional information may be found on Nova's website link - https://www.novami.com/.
Nova is traded on the Nasdaq and TASE, Nasdaq ticker symbol NVMI.
Use of Non-GAAP Adjusted Financial Measures
This press release provides financial measures that exclude amortization of acquired intangible assets, stock-based compensation expenses, revaluation of operating lease liabilities and remeasurement of intercompany loans, amortization of issuance costs and tax effect of non-GAAP adjustment, as applicable, and are therefore not calculated in accordance with generally accepted accounting principles (GAAP). Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding Nova's performance because they reflect our operational results and enhance management's and investors' ability to evaluate Nova's performance before charges or benefits considered by management to be outside Nova's ongoing operating results. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management believes that it is in the best interest of its investors to provide financial information that will facilitate comparison of both historical and future results and allow greater transparency to supplemental information used by management in its financial and operational decision making. A reconciliation of each GAAP to non-GAAP financial measure discussed in this press release is contained in the accompanying financial tables.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future performance, such as statements regarding, but not limited to, anticipated growth opportunities and projections about our business and its future revenues, expenses and profitability. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied in those forward-looking statements. Factors that may affect our results, performance, circumstances or achievements include, but are not limited to, the following: increased information technology security threats and sophisticated computer crime; foreign political and economic risks including supply-chain difficulties; regulations that could restrict our operations such as economic sanctions and export restrictions; changes in
(Tables to Follow)
NOVA LTD. | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
( | ||
As of | ||
March 31, | December 31, | |
ASSETS | 2024 | 2023 |
Current assets | ||
Cash and cash equivalents | 118,106 | 107,574 |
Short-term interest-bearing bank deposits | 156,618 | 119,850 |
Marketable securities | 220,811 | 216,258 |
Trade accounts receivable, net | 99,394 | 111,256 |
Inventories | 148,421 | 138,198 |
Other current assets | 20,118 | 17,084 |
Total current assets | 763,468 | 710,220 |
Non-current assets | ||
Marketable securities | 195,136 | 191,351 |
Interest-bearing bank deposits and restricted deposits | 7,716 | 6,254 |
Deferred tax assets | 24,420 | 23,583 |
Operating lease right-of-use assets | 40,801 | 41,856 |
Property plant and equipment, net | 66,905 | 66,874 |
Intangible assets, net | 36,846 | 39,184 |
Goodwill | 49,401 | 50,080 |
Other long-term assets | 4,879 | 4,405 |
Total non-current assets | 426,104 | 423,587 |
Total assets | 1,189,572 | 1,133,807 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current liabilities | ||
Convertible senior notes, net | 198,000 | 197,678 |
Trade accounts payable | 38,813 | 35,158 |
Deferred revenues | 46,831 | 41,978 |
Operating lease current liabilities | 6,643 | 6,703 |
Other current liabilities | 48,061 | 41,294 |
Total current liabilities | 338,348 | 322,811 |
Non-current liabilities | ||
Operating lease long-term liabilities | 38,245 | 39,762 |
Long-term deferred tax liability | 10,354 | 10,574 |
Other long-term liabilities | 10,844 | 9,908 |
Total non-current liabilities | 59,443 | 60,244 |
Shareholders' equity | 791,781 | 750,752 |
Total liabilities and shareholders' equity | 1,189,572 | 1,133,807 |
NOVA LTD. | ||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
( | ||
Three months ended March 31, | ||
2024 | 2023 | |
Revenues: | ||
Products | 111,570 | 105,331 |
Services | 30,228 | 26,862 |
Total revenues | 141,798 | 132,193 |
Total cost of revenues | 58,537 | 54,927 |
Gross profit | 83,261 | 77,266 |
Operating expenses: | ||
Research and development, net | 24,752 | 22,968 |
Sales and marketing | 16,493 | 13,522 |
General and administrative | 4,796 | 5,039 |
Total operating expenses | 46,041 | 41,529 |
Operating income | 37,220 | 35,737 |
Financing income, net | 6,000 | 4,728 |
Income before taxes on income | 43,220 | 40,465 |
Income tax expenses | 6,360 | 5,838 |
Net income for the period | 36,860 | 34,627 |
Earnings per share: | ||
Basic | 1.27 | 1.21 |
Diluted | 1.15 | 1.10 |
Shares used in calculation of earnings per share | ||
Basic | 29,030 | 28,678 |
Diluted | 32,159 | 31,824 |
NOVA LTD. | ||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
( | ||
Three months ended March 31, | ||
2024 | 2023 | |
Cash flows from operating activities: | ||
Net income | 36,860 | 34,627 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of property and equipment | 2,903 | 2,340 |
Amortization of intangible assets | 1,468 | 1,444 |
Amortization of premium and accretion of discount on marketable securities, net | (1,648) | (428) |
Amortization of debt discount and issuance costs | 322 | 316 |
Share-based compensation | 6,372 | 4,394 |
Net effect of exchange rate fluctuation | 1,257 | 1,349 |
Changes in assets and liabilities: | ||
Trade accounts receivable, net | 11,402 | 8,617 |
Inventories | (11,518) | (20,335) |
Other current and long-term assets | (3,482) | (8,231) |
Deferred tax assets, net | (766) | (1,937) |
Operating lease right-of-use assets | 1,044 | 802 |
Trade accounts payable | 3,975 | 500 |
Deferred revenues | 4,884 | (313) |
Operating lease liabilities | (1,566) | (1,645) |
Other current and long-term liabilities | 7,893 | 1,670 |
Accrued severance pay, net | 38 | (98) |
Net cash provided by operating activities | 59,438 | 23,072 |
Cash flows from investment activities: | ||
Change in short-term and long-term interest-bearing bank deposits | (38,259) | (23,062) |
Investment in marketable securities | (65,155) | (53,682) |
Proceeds from maturity of marketable securities | 57,249 | 41,892 |
Purchase of property and equipment | (2,768) | (2,758) |
Net cash provided by (used in) investing activities | (48,933) | (37,610) |
Cash flows from financing activities: | ||
Purchases of treasury shares | - | (112) |
Net cash provided by (used in) financing activities | - | (112) |
Effect of exchange rate fluctuations on cash and cash equivalents | 27 | (996) |
Changes in cash and cash equivalents and restricted cash | 10,532 | (15,646) |
Cash and cash equivalents and restricted cash -beginning of period | 107,574 | 111,721 |
Cash and cash equivalents - end of period | 118,106 | 96,075 |
NOVA LTD. | ||||
RECONCILIATION OF GAAP TO NON-GAAP RESULTS | ||||
( | ||||
Three months ended | ||||
March 31, | December 31, | March 31, | ||
GAAP gross profit | 83,261 | 74,012 | 77,266 | |
Stock-based compensation* | 1,763 | 1,537 | 1,165 | |
Amortization of acquired intangible assets | 1,366 | 1,354 | 1,338 | |
Non-GAAP gross profit | 86,390 | 76,903 | 79,769 | |
GAAP gross margin as a percentage of revenues | 59 % | 55 % | 58 % | |
Non-GAAP gross margin as a percentage of revenues | 61 % | 57 % | 60 % | |
GAAP operating income | 37,220 | 33,662 | 35,737 | |
Stock-based compensation* | 6,372 | 5,654 | 4,394 | |
Amortization of acquired intangible assets | 1,468 | 1,461 | 1,444 | |
Non-GAAP operating income | 45,060 | 40,777 | 41,575 | |
GAAP operating margin as a percentage of revenues | 26 % | 25 % | 27 % | |
Non-GAAP operating margin as a percentage of revenues | 32 % | 30 % | 31 % | |
GAAP net income | 36,860 | 38,068 | 34,627 | |
Stock-based compensation* | 6,372 | 5,654 | 4,394 | |
Amortization of acquired intangible assets | 1,468 | 1,461 | 1,444 | |
Amortization of issuance costs | 322 | 324 | 316 | |
Revaluation of operating lease and intercompany loans | 893 | (827) | (822) | |
Tax effect of non-GAAP adjustments | (1,303) | (1,083) | (884) | |
Non-GAAP net income | 44,612 | 43,597 | 39,075 | |
GAAP basic earnings per share | 1.27 | 1.31 | 1.21 | |
Non-GAAP basic earnings per share | 1.54 | 1.50 | 1.36 | |
GAAP diluted earnings per share | 1.15 | 1.20 | 1.09 | |
Non-GAAP diluted earnings per share | 1.39 | 1.36 | 1.23 | |
Shares used for calculation of earnings per share | ||||
Basic | 29,030 | 28,975 | 28,678 | |
Diluted | 32,159 | 32,023 | 31,824 | |
* Stock-based compensation for the three months ended March 31, 2024, included in – Cost of revenues - 1,763; | ||||
NOVA LTD. | ||
SUPPLEMENTAL INFORMATION - RECONCILIATION OF SECOND QUARTER 2024 | ||
GAAP TO NON-GAAP GUIDANCE | ||
( | ||
Low | High | |
Estimated GAAP net income per diluted share | 1.07 | 1.21 |
Estimated non-GAAP items: | ||
Stock-based compensation | 0.19 | 0.20 |
Amortization of acquired intangible assets | 0.04 | 0.04 |
Amortization of issuance costs | 0.01 | 0.01 |
Tax effect of non-GAAP adjustments | (0.04) | (0.04) |
Estimated non-GAAP net income per diluted share | 1.27 | 1.42 |
Company Contact:
Dror David, Chief Financial Officer
Tel: +972-73-229-5760
E-mail - investors@novami.com
Nova website link - https://www.novami.com/
Investor Relations Contact:
Miri Segal MS-IR LLC
Tel: +917-607-8654
E-mail - msegal@ms-ir.com
Logo - https://mma.prnewswire.com/media/1446151/Nova_Logo.jpg
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SOURCE Nova
FAQ
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