• Revenue: $204 million, up 21% year-over-year.
• Gross Margin: 51.6%.
• Operating Margin: 27.5%.
• Cash and Time Deposits: $369 million at the end of the quarter.
• Cash Flow from Operations: $11.9 million for the third quarter.
• Revenue from Single Wafer Cleaning, Tahoe, and Semi-Critical Cleaning: $161 million, up 21.6%.
• Revenue from ECP, Furnace, and Other Technologies: $34.6 million, up 35.6%.
• Revenue from Advanced Packaging (excluding ECP, Services, and Spares): $8.4 million, down 21%.
• Total Shipments: $261 million, up 23%.
• Operating Expenses: $49.2 million.
• Net Income Attributable to ACM Research: $42.4 million.
• Net Income per Diluted Share: $0.63.
• Capital Expenditures: $33.4 million for the third quarter.
• 2024 Revenue Outlook: Raised to $725-$745 million.

• Warning! GuruFocus has detected 6 Warning Sign with ACMR.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• ACM Research Inc (NASDAQ:ACMR) reported a 21% increase in third-quarter revenue, reaching $204 million.
• The company achieved a gross margin of 51.6%, exceeding its long-term target range of 40-45%.
• ACM Research Inc (NASDAQ:ACMR) has raised its 2024 revenue outlook to $725-$745 million, indicating strong growth expectations.
• The company is making significant progress with its high-temperature SPM solutions, positioning itself as a key player in the market.
• ACM Research Inc (NASDAQ:ACMR) is expanding its global footprint, with new facilities in China and the US, enhancing its production and R&D capabilities.

Negative Points

• Advanced packaging revenue declined by 21% in Q3, indicating challenges in this segment.
• The company's reliance on the Chinese market remains high, with 63% of revenue coming from China, posing a risk if geopolitical tensions escalate.
• There is uncertainty regarding future US trade policies, which could impact ACM Research Inc (NASDAQ:ACMR)'s operations and market access.
• Gross margins are expected to return to the target range of 40-45% in the future, suggesting potential pressure on profitability.
• The advanced packaging market in China is experiencing a slowdown, which could affect future growth prospects in this area.

Q & A Highlights

Q: Can you provide details on your wet clean product portfolio's coverage of the 3D NAND market? A: Our typical process cleaning covers almost 90% of the market. We are engaged in R&D and production for most tools, including specific actions for 3D NAND. By the end of this year, we expect to be qualified for all processes, indicating significant progress.

Q: What is your outlook for China's WFE spending next year, considering potential changes in US trade policy? A: We expect China's market to remain strong due to ongoing demand in memory and logic foundries. While it's hard to predict exact numbers, we anticipate steady growth. Regarding US trade policy, we will comply with all regulations and continue supporting global production ramp-ups.

Q: Given your consistent gross margins above target, what is your outlook for 2025? A: Our year-to-date gross margins are above 50%, driven by product mix and foreign exchange benefits. While we maintain a long-term target of 40-45%, our backlog margins are healthy. We expect to stick to this target range in the future.

Q: How do you foresee sales outside of China evolving next year? A: Expanding internationally is a corporate focus. We anticipate good growth in China and potential contributions from international markets, depending on customer evaluations and project statuses. Our new clean room in Oregon signifies our commitment to global expansion.

Q: What are the competitive advantages of your high-temperature SPM solutions? A: Our high-temperature SPM tool offers better cleaning environments and uptime due to controlled chemical splash. Our Tahoe tool, targeting lower and middle temperatures, provides excellent particle removal efficiency, making it suitable for advanced logic and memory applications.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.