Silicon Motion Technology Corporation SIMO reported solid third-quarter 2024 results, with both adjusted earnings and revenues surpassing the Zacks Consensus Estimate. 

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The leading merchant supplier of client SSD (Solid State Drive) controllers witnessed top-line growth driven by healthy demand trends.

SIMO’s Net Income

On a GAAP basis, net income was $20.8 million or 62 cents per American depositary share (ADS) compared with $10.6 million or 32 cents per ADS in the prior-year quarter. Higher net sales across various end markets contributed to the year-over-year improvement in GAAP earnings.

Non-GAAP net income was $31 million or 92 cents per ADS, up from $21.1 million or 63 cents per ADS in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 7 cents.

Silicon Motion Technology Corporation Price, Consensus and EPS Surprise

Silicon Motion Technology Corporation price-consensus-eps-surprise-chart | Silicon Motion Technology Corporation Quote

Silicon Motion’s Revenues

Quarterly revenues increased to $212.4 million from the year-ago quarter’s tally of $172.3 million. The top line beat the Zacks Consensus Estimate of $210 million. Increased sales of SSD controllers, as well as eMMC and UFS controllers, on a year-over-year basis, contributed to the top-line growth.

Management noted that sales of SSD controllers were flat sequentially and up 20 -25% on a year-over-year basis. 

eMMC+UFS (Embedded Multi-Media Card + Universal Flash Storage) sales recorded solid sequential improvement between 0% and 5% and increased 40-45% year over year.

Revenues in SSD solutions increased 5-10% sequentially and year over year.

SIMO’s Other Details

Non-GAAP gross profit aggregated $99.3 million compared with $73.3 million in the year-ago quarter, with respective margins of 46.8% and 42.5%. The rise was primarily driven by higher revenues year over year. Non-GAAP operating expenses increased to $65.1 million from $49.5 million. Non-GAAP operating income increased from $23.8 million to $34.2 million year-over-year, with margins of 13.8% and 16.1%, respectively.

SIMO’s Cash Flow & Liquidity

During the September quarter, Silicon Motion generated $54.05 million of cash from operating activities compared with $64.9 million in the year-ago period. As of Sept. 30, 2024, the company had $313.9 million in cash and cash equivalents with $62.7 million of other liabilities. 

The company’s capital expenditure totaled $12.4 million. This includes $7.4 million for the routine procurement of testing equipment, software, design tools and other goods and another $5 million for building construction in Hsinchu.

SIMO’s Outlook

For fourth-quarter 2024, management estimates non-GAAP revenues to be in the range of $191-$202 million. Non-GAAP gross margin is expected to be around 46.5-47.5%. Operating margin is anticipated to be in the band of 15.6-16.6%. The company expects that the introduction of two key new controllers, including the AI/enterprise server MonTitan controller and PCIe Gen 5.0 client SSD controller solutions, to scale further in the fourth quarter with improvement in demand.

SIMO’s Zacks Rank

Silicon Motion currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Motorola Solutions, Inc. MSI is scheduled to release third-quarter earnings on Nov. 7. The Zacks Consensus Estimate for earnings is pegged at $3.36 per share, indicating growth of 5.33% from the year-ago figure. 

Pinterest, Inc. PINS is scheduled to release third-quarter 2024 earnings on Nov. 7. The Zacks Consensus Estimate for earnings is pegged at 34 cents per share, indicating growth of 21.4% from the year-ago figure. 

Light and Wonder LNW is scheduled to release third-quarter earnings on Nov. 12. The Zacks Consensus Estimate for earnings is pegged at $1.11 per share, indicating growth of 37% from the year-ago figure.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Motorola Solutions, Inc. (MSI) : Free Stock Analysis Report

Silicon Motion Technology Corporation (SIMO) : Free Stock Analysis Report

Pinterest, Inc. (PINS) : Free Stock Analysis Report

Light & Wonder, Inc. (LNW) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research