ACM Research, Inc. (ACMR)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 revenue was $223.47M, up 31.2% year over year and up 9.6% sequentially; GAAP diluted EPS was $0.46 (non-GAAP $0.56). Gross margin was 49.6% vs 46.4% a year ago but down sequentially from 51.4% in Q3 .
• Management maintained FY2025 revenue guidance at $850–$950M and raised the long-term gross margin target to 42–48% (from 40–45%), signaling confidence in mix and cost structure improvements .
• Shipments surged to $264M in Q4 (vs $140M in Q4’23), implying a strong pipeline of tools under customer evaluation that can convert to revenue in future periods; cash, equivalents and time deposits rose to $441.9M at year-end .
• Regulatory overhang: ACM Shanghai and ACM Korea were added to the U.S. Entity List in December; management emphasized localized supply chain and described production impact as manageable, with continued support for global customers .
• S&P Global consensus estimates for Q4 were unavailable at the time of this analysis; estimate comparisons are therefore omitted (attempted retrieval but API limit reached).

What Went Well and What Went Wrong

• What Went Well
  • Strong top-line and profitability: revenue +31% YoY to $223.5M; operating income +88% YoY to $44.0M; gross margin expanded 320 bps YoY to 49.6% .
  • Product momentum: process qualification achieved for Thermal and PEALD furnace tools at two China customers; shipments up 88% YoY to $264M, highlighting traction in furnace and plating platforms .
  • Confidence in model: FY2025 revenue guide held at $850–$950M; long-term gross margin target raised to 42–48% from 40–45% .
• What Went Wrong
  • Sequential margin compression: gross margin declined to 49.6% in Q4 from 51.4% in Q3; operating margin dipped to 19.7% from 21.7% sequentially, reflecting mix/volume/currency factors .
  • Revenue concentration: Q4 revenue was almost entirely Mainland China ($223.11M vs $0.36M other regions), exposing ACM to regional and policy risks .
  • Regulatory uncertainty: addition of ACM Shanghai and ACM Korea to the U.S. Entity List creates ongoing risk; management asserted impacts are manageable but visibility for Q4 2025 remains less clear vs earlier quarters .

Financial Results

Segment revenue breakdown

Regional revenue breakdown

KPIs

Notes: Non-GAAP metrics exclude stock-based compensation; non-GAAP net income/EPS also exclude unrealized gains/losses on short-term investments .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We grew revenue by 40% and total shipments by 63%… Our operating profit increased by 57.6%, and we generated $152 million in cash flow from operations.” — Dr. David Wang, CEO .
• “We achieved process qualification of our Thermal and Plasma-Enhanced ALD furnace tools at two semiconductor customers in mainland China.” — Dr. David Wang .
• “We are working quickly to complete the transition [to localized supply chain]… We think the impact on our production is manageable, and we do not expect a significant interruption of our business.” — Dr. David Wang on Entity List .
• “We have updated our long-term business model to a gross margin target range of 42% to 48%, versus the prior range of 40% to 45%.” — Company outlook .
• “Net cash… was $259.1 million… For 2025, we expect our effective tax rate in the 12% to 15% range… Capex about $65–$75 million.” — Mark McKechnie, CFO .

Q&A Highlights

• FY2025 revenue outlook: Visibility solid through Q3 driven by prior-year shipments and current POs; Q4 visibility lower; potential range refinement by mid-year .
• Regulatory impact: Entity List effects differ by customer; ACM working with customers to assess impacts; continued expansion at some customers .
• Plating market share: ACM estimates ~30–35% share in China across front-end and back-end applications .
• Advanced packaging trajectory: Expected to grow vs 2024 with panel-level tools beginning to contribute in 2025 .
• End-market mix (memory/logic/EV): Not disclosed; mgmt acknowledged concentration with top customers (four customers >52% of revenue) .

Estimates Context

• S&P Global consensus estimates for Q4 2024 EPS and revenue were unavailable at the time of request due to an API limit; therefore, estimate comparisons are not included.
• Given higher long-term gross margin targets and strong shipments, analysts may revisit margin forecasts and revenue conversion timing; however, regulatory dynamics and China concentration could temper estimate revisions until visibility improves .

Key Takeaways for Investors

• Revenue and profitability momentum: Q4 revenue +31% YoY; operating income +88% YoY; gross margin near 50% underscores solid product mix and cost execution .
• Mix shift benefits: Furnace (ALD) and plating contributed more in Q4; process qualifications and 17 furnace customers indicate broadening platform adoption into 2025 .
• Sequential margin caution: Gross/operating margins dipped sequentially (mix/currency/volume); monitor mix evolution and margin durability as furnace and panel tools ramp .
• Pipeline conversion: Record shipments ($264M) and first-tool evaluations support future revenue; watch acceptance timing and conversion rates in 2025 .
• Guidance and model confidence: FY2025 revenue guide maintained; long-term gross margin target raised to 42–48%—a positive structural signal .
• Regulatory risk management: Entity List addition introduces uncertainty; mgmt highlights localized supply chain to mitigate; monitor customer spending plans and export rules .
• Concentration risk: ~100% of Q4 revenue from China; global expansion (Oregon facility, U.S./EU engagements) is strategic but will take time; positioning in advanced packaging could aid diversification .

All data sourced from ACMR’s Q4 2024 8-K and press releases, and the Q4 2024 earnings call transcript as cited above.