Intevac(IVAC)2024-08-06 02:52Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was nearly 0.12, which was better than guidance [5][6] - Cash and investments at the end of the quarter surpassed 5 million from Q1 [6][17] Business Line Data and Key Metrics Changes - HDD revenue outlook for the full year has been increased to approximately 40 million, with strong growth in HAMR upgrades [6][14] - Year-to-date HDD revenues exceeded last year's first half by more than 10%, indicating continued strong growth [6][8] Market Data and Key Metrics Changes - Demand for cloud storage has significantly increased in 2024, with expectations for continued growth, particularly in data center deployments related to AI [8][9] - The HDD industry is experiencing improving fundamentals, driven by strong cloud demand growth [8][9] Company Strategy and Development Direction - The company is focused on maintaining strong customer relationships and order activity, with expectations for near-record levels of upgrades in 2024 and growth in 2025 [9][10] - The TRIO platform is being prioritized for qualification and market expansion, with ongoing engagement with new customers and collaborations [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued demand for HAMR upgrades and the potential for a stable flow of upgrade business over the next five years [21][22] - The company expects to exit 2024 with around 70 million in cash, emphasizing the importance of protecting the balance sheet [14][17] Other Important Information - The company has engaged Intralink to accelerate expansion in Asia, focusing on identifying opportunities in fast-growing sectors [11][12] - The TRIO platform's versatility allows for applications beyond consumer devices, including polymers and advanced packaging [26][27] Q&A Session Summary Question: Regarding the installed base for HAMR and future upgrades - Management indicated that approximately 140 to 145 systems can be upgraded to HAMR, with about 20 upgrades completed to date, suggesting significant future opportunities [21][22] Question: On the TRIO sampling process - The TRIO sampling involves running customer samples through a test bed in Santa Clara, with iterative testing and analysis conducted in parallel with customer evaluations [23][24] Question: Clarification on revenue upside and order timing - Management confirmed that the revenue upside was due to pull-ins of HAMR and other upgrades from the second half of the year, with orders for the quarter just under 4 million and a backlog of over $42 million [29][30] Question: Gross margins and future expectations - Gross margins for Q2 were strong, with expectations for similar margins in the upcoming quarter, primarily driven by HDD business [32][33] Question: TRIO tool qualification and potential for additional orders - Management confirmed that the TRIO tool must go through a qualification process with both the glass finisher and the end customer before launch [40][41]