Amkor Technology(US:AMKR)2025-10-28 20:56Financial Performance - Net sales increased by $125.4 million, or 6.7%, to $1,987.0 million for the three months ended September 30, 2025, compared to $1,861.6 million for the same period in 2024, driven by growth in computing and communications end markets [107]. - Gross margin for the three months ended September 30, 2025, decreased to 14.3% from 14.6% in the same period of 2024, primarily due to increased overhead and employee compensation costs [108]. - Operating income margin remained consistent at 8.0% for both the three months ended September 30, 2025, and 2024 [109]. - The computing end market grew by 23% for the three months ended September 30, 2025, while the communications end market grew by 5%, driven by strong demand across all computing applications and premium tier smartphones [112]. - The communications end market decreased by 8% for the nine months ended September 30, 2025, primarily due to lower supported content in premium tier smartphones [113]. Cash Flow and Expenses - Net cash provided by operating activities was $451.1 million for the nine months ended September 30, 2025, down from $551.3 million in the same period of 2024, primarily due to changes in working capital and lower operating profits [110]. - Free cash flow for the nine months ended September 30, 2025, was $(13.2) million, a significant decrease from $105.8 million in 2024 [153]. - Cash flow used in investing activities increased by $52.8 million for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to higher net payments for short-term investments and property, plant, and equipment [150]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $451,126 thousand, a decrease of $100.1 million compared to $551,260 thousand in 2024 [149]. Capital Expenditures - Capital expenditures totaled $472.5 million for the nine months ended September 30, 2025, compared to $458.1 million for the same period in 2024, focusing on investments in advanced packaging and test equipment [109]. - Capital expenditures for the nine months ended September 30, 2025, amounted to $472.5 million, with expectations for total capital expenditures in 2025 to be approximately $950 million [146][147]. Debt and Interest - As of September 30, 2025, the company had total debt of $1,811.9 million, with $547.4 million payable within 12 months [137]. - Interest expense for the three months ended September 30, 2025, increased by 35.9% to $21,231 thousand compared to $15,622 thousand in 2024, primarily due to an increase in average outstanding debt [120][121]. - Total debt maturities as of September 30, 2025, amounted to $1.82 billion, with fixed rate debt averaging an interest rate of 6.1% [163]. - Variable rate debt includes $500 million with an average interest rate of 5.7% [163]. - The company has net debt borrowings in 2025 compared to net debt repayments in 2024, indicating a shift in financing activities [151]. Research and Development - Research and development expenses increased by 8.3% for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to development projects in new advanced and mainstream packaging technologies [118]. Foreign Currency and Investments - Approximately 90% of net sales for the nine months ended September 30, 2025, were denominated in U.S. dollars, with the remaining in Japanese yen [158]. - A 10% appreciation of foreign currencies against the U.S. dollar would have resulted in approximately $121 million lower operating income for the nine months ended September 30, 2025 [158]. - The company reported a gain of $5.4 million from foreign exchange rate translation for the nine months ended September 30, 2025, compared to a loss of $6.0 million for the same period in 2024 [160]. - The company employs natural hedging techniques and forward contracts to mitigate foreign currency risk associated with its operations [156]. Other Financial Metrics - Income tax expense for the three months ended September 30, 2025, was $19,185 thousand, a decrease of 30.8% from $27,715 thousand in 2024, mainly due to an increase in income before income taxes [124]. - Total other expense, net for the three months ended September 30, 2025, was $4,530 thousand, a decrease of 39.5% from $7,492 thousand in 2024 [120]. - The company anticipates continuing to pay quarterly cash dividends, having paid a total of $61.3 million in dividends during the nine months ended September 30, 2025 [145]. - The company was awarded up to $407 million in direct funding by the U.S. Department of Commerce under the CHIPS Act to support the Arizona Facility, contingent on achieving certain milestones [101]. - The Vietnam Facility began delivering advanced packages in Q3 2024, contributing to the company's geographic footprint and supply chain diversification [101].