ASE Technology (ASX) Q2 2024 earnings summary

Executive summary

• Q2 2024 net revenues reached NT$140,238 million, up 6% sequentially and 3% year-over-year, with net income attributable to shareholders at NT$7,783 million, up 37% sequentially and 1% year-over-year; basic EPS was NT$1.80, up 36% sequentially and flat YoY.

• Q2 2024 saw a bifurcated market: leading-edge products experienced strong demand and full utilization, while traditional products showed only selective signs of recovery and remained at ~60% utilization.

• Investments are increasing in leading-edge packaging, testing, labor, and equipment to meet growing complexity and demand.

• For the six months ended June 30, 2024, revenue was NT$273,040,918 thousand, up from NT$267,166,425 thousand year-over-year, with net profit at NT$14,120,467 thousand.

• The independent auditors' review report found no material misstatements and confirmed fair presentation of financials.

Financial highlights

• Q2 consolidated net revenues rose 6% sequentially and 3% year-over-year; gross profit was NT$23,066 million with a 16.4% margin, up 0.7pp sequentially and 0.4pp YoY.

• Net income was NT$7,783 million, up NT$2,101 million sequentially and flat YoY; EPS was NT$1.80 (basic), NT$1.75 (diluted).

• Operating profit reached NT$9,021 million, up NT$1,500 million sequentially but down NT$400 million YoY; operating margin up 0.7pp sequentially, down 0.5pp YoY.

• EBITDA for Q2 2024 was NT$26,127 million, up from NT$23,974 million in Q1 2024.

• Excluding PPA, gross margin was 17.1%, operating margin 7.3%, net margin 6.4%, and basic EPS NT$2.08.

Outlook and guidance

• Q3 ATM revenue expected to grow high single digits QoQ; gross margin guided at 23%-23.5%.

• Q3 EMS revenue to grow mid-to-high single digits QoQ; operating margin to exceed Q4 2023's 3.5%.

• Full-year growth now expected to be moderate due to slower general market recovery, but leading-edge remains strong.

• CapEx for 2024 to double from 2023, focused on leading-edge ATM capacity and technology advancement.

• The company continues to invest in property, plant, and equipment, with outstanding commitments of NT$71,891,060 thousand as of June 30, 2024.