Amkor Technology(AMKR) - 2025 Q2 - Quarterly Results

Financial Performance and Outlook This section provides an overview of Amkor's financial results, liquidity, and future projections Second Quarter 2025 Financial Highlights Amkor reported Q2 2025 revenue of $1.51 billion, a 14% sequential increase, exceeding guidance with double-digit growth across all end markets, and net income of $54 million, or $0.22 per diluted share, including a $32 million one-time net benefit to operating income - CEO Giel Rutten highlighted that Q2 revenue of $1.51 billion was up 14% sequentially and above guidance, with double-digit growth across all end markets, strengthening the company's strategic presence in AI and HPC[2] Quarterly Financial Results Comparison (in millions, except per share data) | | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net sales | $1,511 | $1,322 | $1,461 | | Gross margin | 12.0% | 11.9% | 14.5% | | Operating income | $92 | $32 | $82 | | Net income attributable to Amkor | $54 | $21 | $67 | | Earnings per diluted share | $0.22 | $0.09 | $0.27 | | EBITDA | $259 | $197 | $247 | - Q2 2025 results included a $32 million net benefit to operating income and EBITDA from a contingency payment related to the Nanium acquisition, positively impacting net income by $16 million and earnings per diluted share by $0.07[3] Financial Condition and Dividends As of June 30, 2025, Amkor maintained a strong liquidity position with $2.0 billion in cash and short-term investments against $1.6 billion in total debt, planning a significant debt repayment of $223 million in July 2025 and continuing shareholder returns with a quarterly dividend of $0.08269 per share - At the end of Q2 2025, total cash and short-term investments stood at $2.0 billion, with total debt at $1.6 billion[4] - The company will repay $223 million in debt in July 2025[4] - A quarterly dividend of $0.08269 per share was paid on June 25, 2025, with future dividends subject to Board approval[4] Third Quarter 2025 Business Outlook For Q3 2025, Amkor projects strong sequential growth with net sales expected between $1.875 billion and $1.975 billion, anticipating a gross margin of 13.0% to 14.5% and net income in the range of $85 million to $120 million, or $0.34 to $0.48 per diluted share, with full-year 2025 capital expenditures forecasted at approximately $850 million Third Quarter 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Net sales | $1.875 billion to $1.975 billion | | Gross margin | 13.0% to 14.5% | | Net income | $85 million to $120 million | | Diluted EPS | $0.34 to $0.48 | - Full year 2025 capital expenditures are projected to be approximately $850 million[6] Operational Performance Analysis In Q2 2025, Advanced products drove sales with $1.228 billion, while Mainstream products contributed $283 million, with the Communications end market remaining the largest segment at 40% of sales, though this represents a decrease from 48% in the prior year, and the top ten customers accounted for 72% of net sales, indicating continued customer concentration, while gross margin stood at 12.0%, down from 14.5% YoY, influenced by changes in the cost structure Net Sales by Product Type (in millions) | Product Type | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Advanced products | $1,228 | $1,064 | $1,180 | | Mainstream products | $283 | $258 | $281 | | Total net sales | $1,511 | $1,322 | $1,461 | End Market Distribution (% of Net Sales) | End Market | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Communications | 40% | 40% | 48% | | Computing | 22% | 22% | 20% | | Automotive, industrial & other | 20% | 21% | 20% | | Consumer | 18% | 17% | 12% | - The top ten customers represented 72% of net sales in Q2 2025, consistent with Q2 2024 and slightly up from 71% in Q1 2025[10] Detailed Financial Statements This section presents Amkor's reconciled non-GAAP measures, consolidated income statements, balance sheets, and cash flow statements Non-GAAP Financial Measure Reconciliation Amkor provides a reconciliation for the non-GAAP measure EBITDA, defined as net income before interest, taxes, and depreciation/amortization, which management uses to assess financial operating results and the ability to service debt, with Q2 2025 EBITDA at $259 million, reconciled from a net income of $55 million - The company uses EBITDA, a non-GAAP measure, to provide additional information for assessing financial operating results, evaluating operating performance, and the ability to service debt, fund capital expenditures, and pay dividends[13] EBITDA Reconciliation (in millions) | | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net income | $55 | $22 | $67 | | Plus: Interest expense | $17 | $17 | $16 | | Plus: Income tax expense | $28 | $4 | $14 | | Plus: Depreciation & amortization | $159 | $154 | $150 | | EBITDA | $259 | $197 | $247 | Consolidated Statements of Income For the three months ended June 30, 2025, Amkor's net sales increased to $1.51 billion from $1.46 billion year-over-year, but higher cost of sales led to a lower gross profit of $181.9 million compared to $212.4 million in Q2 2024, consequently decreasing net income attributable to Amkor to $54.4 million from $66.9 million in the prior-year quarter Consolidated Income Statement Highlights (in millions) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net sales | $1,511.4 | $1,461.5 | | Gross profit | $181.9 | $212.4 | | Operating income | $92.0 | $81.5 | | Net income attributable to Amkor | $54.4 | $66.9 | | Diluted EPS | $0.22 | $0.27 | Consolidated Balance Sheets As of June 30, 2025, Amkor's total assets increased to $7.71 billion from $6.94 billion at the end of 2024, primarily due to higher cash and property, plant, and equipment, while total liabilities also rose to $3.47 billion from $2.76 billion, driven by increases in long-term debt and capital expenditures payable, with total stockholders' equity seeing a modest increase to $4.20 billion Balance Sheet Highlights (in millions) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $3,624.6 | $3,073.5 | | Property, plant and equipment, net | $3,802.0 | $3,576.1 | | Total assets | $7,705.6 | $6,944.3 | | Total current liabilities | $1,915.7 | $1,455.3 | | Long-term debt | $1,198.2 | $923.4 | | Total liabilities | $3,473.6 | $2,761.2 | | Total Amkor stockholders' equity | $4,197.4 | $4,149.5 | Consolidated Statements of Cash Flows For the first six months of 2025, net cash from operating activities was $282.6 million, a decrease from $387.1 million in the same period of 2024, with $205.8 million used in investing activities mainly for capital expenditures, and a significant inflow of $308.2 million from financing activities, primarily new long-term debt, resulting in a net cash increase of $393.8 million and boosting the end-of-period cash balance to $1.53 billion Cash Flow Summary (in millions) | | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $282.6 | $387.1 | | Net cash used in investing activities | ($205.8) | ($275.1) | | Net cash provided by (used in) financing activities | $308.2 | ($138.5) | | Net increase (decrease) in cash | $393.8 | ($40.2) | | Cash, cash equivalents and restricted cash, end of period | $1,528.1 | $1,080.4 | Forward-Looking Statements and Risk Factors This section outlines the disclaimer for forward-looking statements and details various risks that could impact the company's business and financial performance Forward-Looking Statement Disclaimer The report includes a disclaimer for its forward-looking statements, cautioning investors about reliance on projections and outlining numerous significant risks that could materially affect business and financial results, including the cyclical nature of the semiconductor industry, competition, customer concentration, high fixed costs, international operational risks, substantial indebtedness, and the ability to protect proprietary technology - Key business risks include dependence on the volatile semiconductor industry, competition, high fixed costs requiring high capacity utilization, and lack of long-term customer commitments[23] - The company faces risks from customer concentration, particularly in the mobile communications and automotive markets, and dependence on international operations which are subject to trade restrictions and regional conflicts[23] - Financial risks include managing substantial indebtedness, restrictive covenants, interest rate fluctuations, and potential changes in tax laws[23][25] - Other notable risks involve the ability to develop and protect new technology, maintain IT system security, attract and retain qualified personnel, and potential environmental liabilities[23][25]