ACM Research Reports Strong Growth Amid Challenges

Acm Research ((ACMR)) has held its Q4 earnings call. Read on for the main highlights of the call.

ACM Research’s recent earnings call painted a picture of robust financial growth and operational achievements, with significant increases in revenue and profit, expansion of their product portfolio, and the opening of new facilities. Despite these positive developments, the company faces challenges due to its addition to the Entity List and regulatory hurdles. However, proactive measures to localize the supply chain and an optimistic outlook for future growth contribute to a generally positive sentiment.

Strong Revenue Growth

ACM Research reported impressive revenue figures, with the fourth quarter of 2024 delivering $223 million, marking a 31% increase. For the fiscal year, revenue reached $782 million, up 40%. This growth underscores the company’s successful strategies and market expansion efforts.

Gross Margin Improvement

The company achieved a gross margin of 49.8% for the fourth quarter and 50.4% for the full year. Notably, ACM Research updated its gross margin target range to 42% to 48%, reflecting confidence in maintaining strong profitability.

Increased Operating Profit

Operating profit saw a significant rise, increasing by 46% in the fourth quarter and 63% for the full year. This growth highlights ACM Research’s effective cost management and operational efficiency.

Cash Position and Dividends

ACM Research ended the year with $259 million in net cash and time deposits. Additionally, ACM Shanghai announced plans to pay a dividend of 25% to 30% of net earnings over the next three years, signaling a commitment to returning value to shareholders.

Expanding Product Portfolio

The company expanded its product portfolio, targeting an $18 billion global market opportunity. Significant growth was noted in the cleaning and plating product lines, positioning ACM Research for continued market leadership.

New Facility Openings

New production and R&D centers in Lingang and Oregon were opened, enhancing ACM Research’s production capabilities and global customer base, further strengthening its competitive position.

Entity List Addition

ACM Shanghai and ACM Korea were added to the U.S. Department of Commerce’s Entity List, potentially impacting their ability to obtain components from the U.S. This development poses a challenge to the company’s operations.

Regulatory Challenges

New U.S. Department of Commerce rules could restrict exports to ACM Shanghai and ACM Korea, potentially affecting operations in Mainland China. The company is actively working to mitigate these risks.

Forward-Looking Guidance

During the earnings call, ACM Research provided an optimistic outlook for 2025, projecting revenue between $850 million and $950 million, representing a 15% year-over-year growth at the midpoint. The company remains confident in its supply chain localization efforts and ongoing global customer expansion, despite challenges from U.S. export restrictions.

In summary, ACM Research’s earnings call highlighted strong financial performance and strategic advancements, with a generally positive sentiment despite regulatory challenges. The company’s proactive measures and optimistic guidance for 2025 suggest continued growth and resilience in the face of external pressures.