Nova Measuring Instruments ((NVMI)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Nova Measuring Instruments showcased a robust fiscal year, with record-breaking revenue and profitability, driven largely by substantial growth in advanced packaging and the strategic acquisition of Sentronics. However, the company acknowledged potential hurdles due to its significant revenue exposure in China and escalating operating expenses.
Record Revenue and Profitability
Nova achieved an impressive milestone in fiscal year 2024, reporting record revenue of $672.4 million, marking a 30% increase from the previous year. The company also saw a 38% growth in non-GAAP net income, reflecting its strong financial performance and strategic initiatives.
Quarterly Performance
The fourth quarter of 2024 was particularly noteworthy for Nova, with revenue hitting a new high of $194.8 million. This represents a 9% increase from the previous quarter and a remarkable 45% growth compared to the same period last year.
Advanced Packaging Growth
Nova’s advanced packaging segment experienced substantial expansion, with revenue more than doubling and now accounting for 15% of the product revenue. The company successfully integrated metrology solutions with four of the top five advanced packaging manufacturers, highlighting its leadership in this sector.
Strong Financial Metrics
The company’s financial health was underscored by an operating margin of 28% on a GAAP basis and 33% on a non-GAAP basis. Nova’s earnings per share on a non-GAAP basis reached $1.94, surpassing guidance expectations.
Sentronics Acquisition
Nova completed the acquisition of Sentronics Metrology, a move that aligns with its strategic growth priorities. This acquisition is anticipated to be accretive within 12 months, underscoring Nova’s commitment to expanding its technological capabilities and market reach.
China Revenue Exposure
A significant portion of Nova’s revenue, 39% in 2024, was derived from China. The company indicated that this may decrease as growth is expected to stem from advanced nodes outside of China, reflecting a strategic shift in focus.
Operating Expenses Increase
Operating expenses rose to $54.5 million on a GAAP basis, primarily due to increased R&D investments. This highlights Nova’s commitment to innovation and sustaining its competitive edge in the market.
Forward-Looking Guidance
Looking ahead, Nova provided an optimistic outlook for 2025. After a record-breaking 2024, the company expects Q1 2025 revenue to range between $205 million and $215 million, with GAAP EPS projected between $1.75 and $1.91. Nova aims to continue expanding in the advanced logic and packaging markets, driven by increased demand from AI-related applications and strategic acquisitions like Sentronics.
In summary, Nova Measuring Instruments presented a strong fiscal performance with record revenue and growth in key areas such as advanced packaging. While there are challenges related to its revenue exposure in China and rising operating expenses, the company’s strategic focus and optimistic guidance for 2025 suggest a promising outlook. Nova’s commitment to innovation and strategic acquisitions positions it well for continued success in the evolving market landscape.
