Kulicke & Soffa(KLIC) - 2025 Q2 - Quarterly Results

Q2 2025 Financial Performance Summary Kulicke & Soffa's Q2 2025 performance shows a revenue decline and significant GAAP net loss, largely due to business cessation charges, despite positive cash flow Q2 2025 Key Financial Results Q2 2025 saw a 5.9% year-over-year net revenue decline to $162.0 million, a GAAP net loss of $84.5 million, and a non-GAAP net loss of $27.9 million, despite positive cash flow Q2 2025 GAAP Financial Performance | | Fiscal Q2 2025 | Change vs. Fiscal Q2 2024 | Change vs. Fiscal Q1 2025 | | :--- | :--- | :--- | :--- | | Net Revenue | $162.0 million | down 5.9% | down 2.5% | | Gross Margin | 24.9% | up 1530 bps | down 2750 bps | | Loss from Operations | $(84.7) million | up 19.5% | down 197.7% | | Net Loss | $(84.5) million | up 17.7% | down 203.5% | | EPS – Diluted | $(1.59) | up 13.1% | down 205.3% | Q2 2025 Non-GAAP Financial Performance | | Fiscal Q2 2025 | Change vs. Fiscal Q2 2024 | Change vs. Fiscal Q1 2025 | | :--- | :--- | :--- | :--- | | Loss from Operations | $(27.4) million | up 45.4% | down 245% | | Net Loss | $(27.9) million | up 47.7% | down 237.8% | | EPS – Diluted | $(0.52) | up 45.3% | down 240.5% | - The company generated $79.9 million in GAAP cash flow from operations and $78.0 million in adjusted free cash flow during the quarter[13] - As of March 29, 2025, cash, cash equivalents, and short-term investments totaled $581.5 million[13] - The company repurchased 0.5 million shares of common stock for $21.3 million in Q2 2025[13] Strategic Business Updates The Board approved ceasing the Electronics Assembly equipment business, incurring approximately $86.6 million in Q2 2025 pre-tax charges, primarily from impairments - On March 31, 2025, the Board of Directors approved a plan to cease the Electronics Assembly (EA) equipment business[3] - During Q2 2025, the company incurred pre-tax charges of approximately $86.6 million related to this intended cessation, primarily from impairments[3] Management Commentary Management noted cautious order activity in Southeast Asia but remains focused on accelerating growth through key technology transitions in core markets - Management noted more cautious order activity specific to certain Southeast Asia markets[8] - The company remains prepared to accelerate growth through technology transitions in Vertical Wire, Power-Semiconductor, Advanced Dispense, and Thermo-Compression[8] Business Outlook The company provides its financial guidance for the third quarter of fiscal 2025, including revenue and earnings per share projections Q3 2025 Financial Guidance Q3 2025 guidance projects net revenue of approximately $145 million (+/- $10 million), a GAAP diluted loss per share of $(0.09), and non-GAAP diluted earnings per share of $0.05 Q3 2025 Outlook | Metric | Guidance | | :--- | :--- | | Net Revenue | $145 million +/- $10 million | | GAAP Diluted EPS | $(0.09) +/- 10% | | Non-GAAP Diluted EPS | $0.05 +/- 10% | - The difference between GAAP and Non-GAAP EPS guidance is primarily due to adjustments for equity-based compensation, amortization, and restructuring expenses, totaling an impact of $0.14 per share[32] Consolidated Financial Statements This section presents the company's consolidated financial statements, including the income statement, balance sheet, and cash flow statement Consolidated Condensed Statements of Operations (Income Statement) For Q2 2025, net revenue was $162.0 million, with a gross profit of $40.4 million, leading to an operating loss of $84.7 million and a net loss of $84.5 million Statement of Operations Highlights (Three Months Ended, in thousands) | Metric | March 29, 2025 | March 30, 2024 | | :--- | :--- | :--- | | Net revenue | $161,986 | $172,074 | | Gross profit | $40,384 | $16,471 | | (Loss)/income from operations | $(84,667) | $(105,155) | | Net loss | $(84,519) | $(102,680) | | Diluted net loss per share | $(1.59) | $(1.83) | - For the six months ended March 29, 2025, net revenue was $328.1 million, and the net loss was $2.9 million[19] Consolidated Condensed Balance Sheets As of March 29, 2025, total assets were $1.15 billion, a decrease from $1.24 billion in fiscal 2024, with total liabilities at $281.1 million and equity at $864.2 million Balance Sheet Highlights (in thousands) | Metric | March 29, 2025 | September 28, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $286,519 | $227,147 | | Short-term investments | $295,000 | $350,000 | | Inventories, net | $155,655 | $177,736 | | TOTAL ASSETS | $1,145,264 | $1,240,162 | | TOTAL LIABILITIES | $281,098 | $296,153 | | TOTAL SHAREHOLDERS' EQUITY | $864,166 | $944,009 | Consolidated Condensed Statements of Cash Flows Q2 2025 saw $79.9 million in net cash from operating activities, a turnaround from the prior year, with total cash and investments ending at $581.5 million Cash Flow Highlights (Three Months Ended, in thousands) | Metric | March 29, 2025 | March 30, 2024 | | :--- | :--- | :--- | | Net cash provided by / (used in) operating activities | $79,877 | $(20,148) | | Net cash provided by / (used in) investing activities | $(38,415) | $3,429 | | Net cash used in financing activities | $(33,506) | $(47,672) | | Change in cash and cash equivalents | $8,194 | $(64,912) | - Total cash, cash equivalents, and short-term investments at the end of Q2 2025 was $581.5 million, compared to $634.7 million at the end of Q2 2024[24] Reconciliation of GAAP to Non-GAAP Financial Measures This section provides reconciliations of GAAP financial measures to their non-GAAP counterparts, detailing adjustments for various items Reconciliation of Income from Operations Q2 2025 GAAP operating loss of $84.7 million was reconciled to a non-GAAP operating loss of $27.4 million, primarily by adjusting for impairment and restructuring charges Q2 2025 Reconciliation of Income from Operations (in thousands) | Metric | Amount | | :--- | :--- | | U.S. GAAP loss from operations | $(84,667) | | Pre-tax non-GAAP items: | | | Amortization related to intangible assets | $1,171 | | Restructuring | $8,806 | | Equity-based compensation | $7,493 | | Impairment charges | $39,817 | | Non-GAAP loss from operations | $(27,380) | Reconciliation of Net Income and EPS Q2 2025 GAAP net loss of $84.5 million (or $(1.59) per share) was reconciled to a non-GAAP net loss of $27.9 million (or $(0.52) per share) Q2 2025 Reconciliation of Net Income (in thousands) | Metric | Amount | | :--- | :--- | | U.S. GAAP net loss | $(84,519) | | Total non-GAAP adjustments | $56,648 | | Non-GAAP net loss | $(27,871) | Q2 2025 Reconciliation of Diluted EPS | Metric | Amount | | :--- | :--- | | U.S. GAAP net loss per share | $(1.59) | | Non-GAAP adjustments per share | $1.07 | | Non-GAAP net loss per share | $(0.52) | Reconciliation of Adjusted Free Cash Flow Q2 2025 adjusted free cash flow totaled $78.0 million, derived from GAAP net cash provided by operating activities less net capital expenditures Q2 2025 Reconciliation of Adjusted Free Cash Flow (in thousands) | Metric | Amount | | :--- | :--- | | U.S. GAAP net cash provided by operating activities | $79,877 | | Purchases of property, plant and equipment | $(1,954) | | Proceeds from sales of property, plant and equipment | $60 | | Non-GAAP adjusted free cash flow | $77,983 |