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Silicom Reports Q3 2024 Results

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Silicom (NASDAQ: SILC) reported Q3 2024 financial results with revenues of $14.8 million, down from $30.1 million in Q3 2023. The company posted a GAAP net loss of $2.6 million ($0.44 per share) compared to net income of $1.2 million in Q3 2023. For the first nine months of 2024, revenues were $43.6 million versus $105.4 million in 2023. The company generated $14 million in cash and spent $8.6 million on share repurchases. Management projects Q4 2024 revenues between $14-15 million, with low single-digit growth expected in 2025 and 20-30% compound annual growth rate from 2026.

Silicom (NASDAQ: SILC) ha riportato i risultati finanziari del terzo trimestre 2024, con ricavi di $14,8 milioni, in diminuzione rispetto ai $30,1 milioni del terzo trimestre 2023. L'azienda ha registrato una perdita netta GAAP di $2,6 milioni ($0,44 per azione), rispetto a un utile netto di $1,2 milioni nel terzo trimestre 2023. Nei primi nove mesi del 2024, i ricavi sono stati di $43,6 milioni rispetto ai $105,4 milioni del 2023. L'azienda ha generato $14 milioni in cassa e ha speso $8,6 milioni per il riacquisto di azioni. La direzione prevede ricavi per il quarto trimestre 2024 tra $14 e $15 milioni, con una crescita prevista a una cifra bassa nel 2025 e un tasso di crescita annuale composto del 20-30% dal 2026.

Silicom (NASDAQ: SILC) informó los resultados financieros del tercer trimestre de 2024, con ingresos de $14,8 millones, una disminución desde los $30,1 millones en el tercer trimestre de 2023. La compañía reportó una pérdida neta GAAP de $2,6 millones ($0,44 por acción) en comparación con una ganancia neta de $1,2 millones en el tercer trimestre de 2023. En los primeros nueve meses de 2024, los ingresos fueron de $43,6 millones frente a los $105,4 millones de 2023. La compañía generó $14 millones en efectivo y gastó $8,6 millones en recompra de acciones. La dirección proyecta ingresos para el cuarto trimestre de 2024 entre $14 y $15 millones, con un crecimiento de un solo dígito bajo esperado en 2025 y una tasa de crecimiento anual compuesta del 20-30% a partir de 2026.

Silicom (NASDAQ: SILC)은 2024년 3분기 재무 결과를 발표했으며, 수익은 $14.8 백만으로 2023년 3분기의 $30.1 백만에서 감소했습니다. 회사는 GAAP 기준 순손실 $2.6 백만 ($0.44 주당) 을 기록하며, 2023년 3분기의 순이익 $1.2 백만과 비교됩니다. 2024년 첫 아홉 달 동안의 수익은 $43.6 백만으로 2023년의 $105.4 백만과 대비됩니다. 회사는 $14 백만의 현금을 생성하고, 주식 재매입에 $8.6 백만을 지출했습니다. 경영진은 2024년 4분기 수익을 $14-15 백만 사이로 예상하며, 2025년에는 낮은 한 자릿수 성장률이 예상되고, 2026년부터는 20-30%의 연평균 복합 성장률을 예상합니다.

Silicom (NASDAQ: SILC) a annoncé les résultats financiers du troisième trimestre 2024, avec des recettes de $14,8 millions, en baisse par rapport à $30,1 millions au troisième trimestre 2023. L'entreprise a affiché une perte nette GAAP de $2,6 millions ($0,44 par action) contre un bénéfice net de $1,2 millions au troisième trimestre 2023. Pour les neuf premiers mois de 2024, les recettes s'élevaient à $43,6 millions contre $105,4 millions en 2023. L'entreprise a généré $14 millions en liquidités et a dépensé $8,6 millions pour le rachat d'actions. La direction prévoit des recettes pour le quatrième trimestre 2024 comprises entre $14 et $15 millions, avec une croissance prévue à un chiffre bas en 2025 et un taux de croissance annuel composé de 20 à 30 % à partir de 2026.

Silicom (NASDAQ: SILC) hat die finanziellen Ergebnisse für das dritte Quartal 2024 veröffentlicht, mit Einnahmen von $14,8 Millionen, was einen Rückgang von $30,1 Millionen im dritten Quartal 2023 darstellt. Das Unternehmen meldete einen GAAP-Nettoverlust von $2,6 Millionen ($0,44 pro Aktie) im Vergleich zu einem Nettogewinn von $1,2 Millionen im dritten Quartal 2023. Für die ersten neun Monate 2024 lagen die Einnahmen bei $43,6 Millionen gegenüber $105,4 Millionen im Jahr 2023. Das Unternehmen generierte $14 Millionen in Bar und gab $8,6 Millionen für den Aktienrückkauf aus. Das Management projiziert Einnahmen für das vierte Quartal 2024 zwischen $14 und $15 Millionen, mit einer erwarteten niedrigen einstelligen Wachstumsrate im Jahr 2025 und einer jährlichen Wachstumsrate von 20-30% ab 2026.

Positive
  • Generated $14 million in cash during first nine months of 2024
  • New customer standardization agreement for Edge products expected to generate several million dollars annually from 2026
  • New 400G FPGA smart NICs contract with multi-million-dollar ramp up beginning in 2026
  • Strong balance sheet supporting continued share buyback program
Negative
  • Q3 2024 revenues declined 51% to $14.8 million from $30.1 million in Q3 2023
  • Q3 2024 GAAP net loss of $2.6 million versus $1.2 million profit in Q3 2023
  • Nine-month revenues dropped 59% to $43.6 million from $105.4 million
  • Continued negative impact from excess customer inventories expected through 2025
  • Low single-digit growth projected for 2025

Insights

The Q3 2024 results reveal significant challenges for Silicom, with $14.8 million in quarterly revenue marking a 51% decline from the previous year. The company swung to a GAAP net loss of $2.6 million, compared to a profit last year. The first nine months show an even steeper revenue decline of 59%.

Key concerns include inventory overhang from specific customers and delayed product adoption. However, the company maintains a strong balance sheet and has generated $14 million in cash during 2024, using $8.6 million for share buybacks. Management's projection of low single-digit growth in 2025 followed by 20-30% CAGR from 2026 suggests a lengthy recovery timeline.

The strategic wins in Edge products and 400G FPGA smart NICs provide future growth potential, but meaningful revenue impact won't materialize until 2026. The company's cost optimization efforts and strong cash position provide some stability during this transition period.

KFAR SAVA, Israel, Oct. 31, 2024 /PRNewswire/ -- Silicom Ltd. (NASDAQ: SILC), a leading provider of high-performance networking and data infrastructure solutions, today reported its financial results for the third quarter ended September 30, 2024.  

Silicom_Ltd_Logo

Financial Results

Third quarter: Silicom's revenues for the third quarter of 2024 were $14.8 million compared with $30.1 million for the third quarter of 2023.

On a GAAP basis, the company's net loss for the quarter totalled $2.6 million, or $0.44 per ordinary share (basic and diluted), compared with net income of $1.2 million, or $0.18 per ordinary share (basic and diluted), for the third quarter of 2023.

On a non-GAAP basis (as described and reconciled below), net loss for the quarter totalled $1.7 million, or $0.28 per ordinary share (basic and diluted), compared with net income of $2.1 million, or $0.30 per ordinary share (basic and diluted), for the third quarter of 2023.

First Nine Months: Silicom's revenues for the first nine months of 2024 were $43.6 million compared with $105.4 million for the first three quarters of 2023.

On a GAAP basis, net loss for the period totalled $7.6 million, or $1.24 per ordinary share (basic and diluted), compared with net income of $8.6 million, or $1.26 per diluted share ($1.27 per basic share), for the first nine months of 2023.

On a non-GAAP basis (as described and reconciled below), net loss for the period totalled $4.9 million, or $0.80 per ordinary share (basic and diluted), compared with net income of $10.7 million, or $1.57 per diluted share ($1.58 per basic share), for the first nine months of 2023.

During the first nine months of 2024, the Company generated approximately $14 million in cash, and invested more than half of that, approximately $8.6 million, in repurchasing Silicom shares.

Guidance

Management projects that revenues for the fourth quarter of 2024 will range from $14 million to $15 million. Growth in 2025 is expected to be in the low single digits, with strong 20%-30% compound annual growth rate materializing gradually from 2026.

Comments of Management  

Liron Eizenman, Silicom's President and CEO, commented, "During the third quarter, we continued to progress towards our mid- and long-term goals while dealing responsibly with our short-term challenges. While we continue to be negatively impacted by excess inventories built by specific customers in previous years - whether in reaction to supply chain disruptions only or in combination with slower-than-expected sales of their new products and services - we believe we will see improvement in the situation during 2025 and a resolution by the end of 2025."

"In the meantime, we continue moving forward according to our strategic plan, with significant milestones affirming the potential of our core Server Adapter and Edge System products to drive significant revenue growth in 2026 and beyond. For example, a service provider customer has recently decided to standardize on our Edge products for all of its deployment scenarios, making Silicom its single hardware provider for its diverse offerings. Deployments will initiate in 2025, and we expect related sales to reach several million dollars per year already in 2026. In parallel, a network equipment OEM has selected one of our high-speed 400G FPGA smart NICs for its core network architecture, with first deliveries scheduled for the first quarter of 2025 and a multi-million-dollar ramp up beginning in 2026. As we continuously increase the number of these 'slow and steady' engagements, we will benefit from ongoing revenue growth and a reduced dependency on specific large accounts. Any faster-than-projected ramp up of pipeline deals could accelerate our progress significantly." 

Mr. Eizenman continued, "Looking forward, we continue to focus on achieving an EPS above $3 as we return our revenues to $150 - $160 million per year. To this end, we have 'right-sized' our expenses, investing as needed to achieve our strategic targets while retaining tight control of our outlays. Based on our very strong balance sheet, we continue moving forward with our share buyback plan: in fact, during the first three quarters of 2024 we have already repurchased more than half a million shares."

Mr. Eizenman concluded, "All in all, we are operating from an extremely solid financial platform, executing on an impressive pipeline and pursuing ambitious but achievable goals. Our team is dedicated, experienced, and fully focused on creating value - for our customers, for the market as a whole, and especially for our shareholders."

Conference Call Details
Silicom's Management will host an interactive conference today, October 31st, at 9am Eastern Time (6am Pacific Time, 3pm Israel Time) to review and discuss the results.

To participate, investors may either listen via a webcast link hosted on Silicom's website or via the dial-in. The link is under the investor relations' webcast section of Silicom's website at https://www.silicom-usa.com/webcasts/ 

For those that wish to dial in via telephone, one of the following teleconferencing numbers may be used:

US: 1 866 860 9642
ISRAEL: 03 918 0609
INTERNATIONAL:  +972 3 918 0609
At: 9:00am Eastern Time, 6:00am Pacific Time, 3:00pm Israel Time

It is advised to connect to the conference call a few minutes before the start.

For those unable to listen to the live call, a replay of the call will be available for three months from the day after the call under the above-mentioned webcast section of Silicom's website.

Non-GAAP Financial Measures

This release, including the financial tables below, presents other financial information that may be considered "non-GAAP financial measures" under Regulation G and related reporting requirements promulgated by the Securities and Exchange Commission (the "SEC") as they apply to our company. These non-GAAP financial measures exclude compensation expenses in respect of options and RSUs granted to directors, officers and employees, impairment of goodwill, taxes on amortization and impairment of acquired intangible assets, impairment of intangible assets and related write-offs, as well as lease liabilities - financial expenses (income). Non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. The tables also present the GAAP financial measures, which are most comparable to the non-GAAP financial measures as well as reconciliation between the non-GAAP financial measures and the most comparable GAAP financial measures. The non-GAAP financial information presented herein should not be considered in isolation from or as a substitute for operating income (loss), net income (loss) or per share data prepared in accordance with GAAP.

About Silicom

Silicom Ltd. is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed primarily to improve performance and efficiency in Cloud and Data Center environments, Silicom's solutions increase throughput, decrease latency and boost the performance of servers and networking appliances, the infrastructure backbone that enables advanced Cloud architectures and leading technologies like NFV, SD-WAN and Cyber Security. Our innovative solutions for high-density networking, high-speed fabric switching, offloading and acceleration, which utilize a range of cutting-edge silicon technologies as well as FPGA-based solutions, are ideal for scaling-up and scaling-out cloud infrastructures.

Silicom products are used by major Cloud players, service providers, telcos and OEMs as components of their infrastructure offerings, including both add-on adapters in the Data Center and stand-alone virtualized/universal CPE devices at the edge.

Silicom's long-term, trusted relationships with more than 200 customers throughout the world, its more than 400 active Design Wins and more than 300 product SKUs have made Silicom a "go-to" connectivity/performance partner of choice for technology leaders around the globe.

For more information, please visit: www.silicom.co.il

Statements in this press Statements in this press release which are not historical data are forward-looking statements which involve known and unknown risks, uncertainties, or other factors not under the company's control, which may cause actual results, performance, or achievements of the company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to, Silicom's increasing dependence for substantial revenue growth on a limited number of customers, the speed and extent to which Silicom's solutions are adopted by the relevant markets, difficulty in commercializing and marketing of Silicom's products and services, maintaining and protecting brand recognition, protection of intellectual property, competition, disruptions to its manufacturing, sales & marketing, development and customer support activities, the impact of the wars in Gaza and in the Ukraine, attacks on shipping by Huthis in the Red Sea, rising inflation, rising interest rates and volatile exchange rates, as well as any continuing or new effects resulting from the COVID-19 pandemic, and  the global economic uncertainty, which may impact customer demand by encouraging them to exercise greater caution and selectivity with their short-term IT investment plans. The factors noted above are not exhaustive.

Further information about the company's businesses, including information about factors that could materially affect Silicom's results of operations and financial condition, are discussed in our Annual Report on Form 20-F and other documents filed by the Company and that may be subsequently filed by the company from time to time with the SEC. These forward-looking statements can generally be identified as such because the context of the statement will include words such as "expect," "should," "believe," "anticipate" or words of similar import. Similarly, statements that describe future plans, objectives or goals are also forward-looking statements. In light of significant risks and uncertainties inherent in forward-looking statements, the inclusion of such statements should not be regarded as a representation by the company that it will achieve such forward-looking statements. The company disclaims any duty to update such statements, whether as a result of new information, future events, or otherwise. 

Company Contact:

Eran Gilad, CFO

Silicom Ltd.        

Tel: +972-9-764-4555      

E-mail: erang@silicom.co.il

Investor Relations Contact:

Ehud Helft

EK Global Investor Relations

Tel: +1 212 378 8040

E-mail: silicom@ekgir.com 

 

-- FINANCIAL TABLES FOLLOW –

 

Silicom Ltd. Consolidated Balance Sheets


(US$ thousands)








September 30,


December 31,


2024


2023







Assets












Current assets






Cash and cash equivalents

$

59,489


$

46,972

Marketable securities


9,818



7,957

Accounts receivables: Trade, net


13,264



25,004

Accounts receivables: Other


7,033



3,688

Inventories


43,498



51,507

Total current assets


133,102



135,128







Marketable securities


7,799



16,619

Assets held for employees' severance benefits                                     


1,481



1,357

Deferred tax assets


2,747



2,359

Property, plant and equipment, net


2,914



3,552

Intangible assets, net


2,316



2,253

Right of Use


7,280



6,466

Total assets

$

157,639


$

167,734







Liabilities and shareholders' equity












Current liabilities






Trade accounts payable

$

7,490


$

4,139

Other accounts payable and accrued expenses


6,443



6,668

Lease Liabilities


1,633



2,070







Total current liabilities


15,566



12,877







Lease Liabilities


5,034



3,877

Liability for employees' severance benefits


2,596



2,672

Deferred tax liabilities


92



46







Total liabilities


23,288



19,472







Shareholders' equity






Ordinary shares and additional paid-in capital


73,000



70,693

Treasury shares


(52,271)



(43,631)

Retained earnings


113,622



121,200

Total shareholders' equity


134,351



148,262







Total liabilities and shareholders' equity

$

157,639


$

167,734


Silicom Ltd. Consolidated Statements of Operations













(US$ thousands, except for share and per share data)














Three-month period


Nine-month period


ended September 30,


ended September 30,


2024


2023


2024


2023

Sales

$

14,756


$

30,057


$

43,623


$

105,368

Cost of sales


10,593



20,821



31,158



72,185

Gross profit


4,163



9,236



12,465



33,183













Research and development expenses


4,958



5,231



14,827



15,622

Selling and marketing expenses


1,366



1,946



4,360



5,343

General and administrative expenses


952



1,099



2,978



3,205

Total operating expenses


7,276



8,276



22,165



24,170













Operating income (loss)


(3,113)



960



(9,700)



9,013













Financial income (expenses), net


515



434



1,601



1,201

Income (loss) before income taxes


(2,598)



1,394



(8,099)



10,214

Income taxes


32



183



(521)



1,660

Net income (loss)

$

(2,630)


$

1,211


$

(7,578)


$

8,554

























Basic income (loss) per ordinary share (US$)

$

(0.44)


$

0.18


$

(1.24)


$

1.27













Weighted average number of ordinary shares used to
compute basic income (loss) per share (in thousands)


5,919



6,744



6,090



6,754













Diluted income (loss) per ordinary share (US$)

$

(0.44)


$

0.18


$

(1.24)


$

1.26













Weighted average number of ordinary shares used to
compute diluted income (loss) per share (in thousands)


5,919



6,753



6,090



6,809

 

Silicom Ltd. Reconciliation of Non-GAAP Financial Results













(US$ thousands, except for share and per share data)














Three-month period


Nine-month period


ended September 30,


ended September 30,


2024


2023


2024


2023













GAAP gross profit

$

4,163


$

9,236


$

12,465


$

33,183

(1) Share-based compensation (*)


82



105



193



323

Non-GAAP gross profit

$

4,245


$

9,341


$

12,658


$

33,506













GAAP operating income (loss)

$

(3,113)


$

960


$

(9,700)


$

9,013

Gross profit adjustments


82



105



193



323

(1) Share-based compensation (*)


777



834



2,113



2,091

Non-GAAP operating income (loss)

$

(2,254)


$

1,899


$

(7,394)


$

11,427













GAAP net income (loss)

$

(2,630)


$

1,211


$

(7,578)


$

8,554

Operating income (loss) adjustments


859



939



2,306



2,414

(2) Lease liabilities - Financial expenses (income)


98



(163)



(9)



(467)

(3) Taxes on amortization and impairment of acquired intangible assets


22



68



397



203

Non-GAAP net income (loss)

$

(1,651)


$

2,055


$

(4,884)


$

10,704













GAAP net income (loss)

$

(2,630)


$

1,211


$

(7,578)


$

8,554

Adjustments for Non-GAAP Cost of sales


82



105



193



323

Adjustments for Non-GAAP Research and development expenses


386



412



986



1,010

Adjustments for Non-GAAP Selling and marketing expenses


191



199



537



548

Adjustments for Non-GAAP General and administrative expenses


200



223



590



533

Adjustments for Non-GAAP Financial income (loss), net


98



(163)



(9)



(467)

Adjustments for Non-GAAP Income taxes


22



68



397



203

Non-GAAP net income (loss)

$

(1,651)


$

2,055


$

(4,884)


$

10,704













GAAP basic income (loss) per ordinary share (US$)

$

(0.44)


$

0.18


$

(1.24)


$

1.27

(1) Share-based compensation (*)


0.14



0.13



0.37



0.35

(2) Lease liabilities - Financial expenses (income)


0.02



(0.02)



-



(0.07)

(3) Taxes on amortization and impairment of acquired intangible assets


-



0.01



0.07



0.03

Non-GAAP basic income (loss) per ordinary share (US$)

$

(0.28)


$

0.30


$

(0.80)


$

1.58













GAAP diluted income (loss) per ordinary share (US$)

$

(0.44)


$

0.18


$

(1.24)


$

1.26

(1) Share-based compensation (*)


0.14



0.13



0.37



0.35

(2) Lease liabilities - Financial expenses (income)


0.02



(0.02)



-



(0.07)

(3) Taxes on amortization and impairment of acquired intangible assets


-



0.01



0.07



0.03

Non-GAAP diluted income (loss) per ordinary share (US$)

$

(0.28)


$

0.30


$

(0.80)


$

1.57

























(*) Adjustments related to share-based compensation expenses according to ASC topic 718 (SFAS 123 (R))













 

Logo: https://mma.prnewswire.com/media/733229/Silicom_Ltd_Logo.jpg

 

Cision View original content:https://www.prnewswire.com/news-releases/silicom-reports-q3-2024-results-302292801.html

SOURCE Silicom Ltd.

FAQ

What were Silicom's (SILC) Q3 2024 revenue and earnings?

Silicom reported Q3 2024 revenues of $14.8 million and a GAAP net loss of $2.6 million ($0.44 per share).

What is Silicom's (SILC) revenue guidance for Q4 2024?

Silicom projects Q4 2024 revenues to range between $14 million to $15 million.

When does Silicom (SILC) expect growth to recover?

Silicom expects low single-digit growth in 2025 and projects 20-30% compound annual growth rate starting from 2026.

How much cash did Silicom (SILC) spend on share repurchases in 2024?

Silicom invested approximately $8.6 million in share repurchases during the first nine months of 2024.

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