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BE

BENCHMARK ELECTRONICS INC (BHE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $657M; non-GAAP EPS of $0.61 came in above the high end of company guidance ($0.53–$0.59), while GAAP EPS was $0.50. Non-GAAP operating margin was 5.1% and gross margin 10.4% .
  • Segment mix: strength in Semi-Cap (+18% YoY) and A&D (+15% YoY) offset weakness in AC&C (−48% YoY) and Medical (−7% YoY); Industrial grew 5% YoY .
  • Free cash flow remained positive for the 7th consecutive quarter; Q4 FCF was $36.9M (OpCF $45.9M). FY 2024 FCF totaled $156M; cash and restricted cash ended at $328M .
  • Q1 2025 guidance: revenue $620–$660M; non-GAAP EPS $0.48–$0.54; non-GAAP gross margin 10.0–10.2%; non-GAAP operating margin 4.5–4.7%; CapEx $15–$20M in Q1, $65–$75M for FY; FCF $50–$80M for FY .
  • Catalysts: management anticipates double-digit Semi-Cap growth in Q1 and for FY 2025, continued A&D strength, and improving Industrial/Medical demand; the company is breaking ground on its fourth Penang building to support Semi-Cap momentum and expects to complement dividends with increased share repurchases in 2025 .

What Went Well and What Went Wrong

  • What Went Well
    • Non-GAAP EPS beat the high end of guidance; margins remained resilient (10.4% gross, 5.1% operating). “This was exhibited by an outstanding year in margin expansion and free cash flow generation.” — CEO Jeff Benck .
    • Semi-Cap and A&D delivered strong YoY growth; management expects double-digit Semi-Cap growth for Q1 and FY 2025, supported by wins and share gains .
    • Working capital execution: CCC improved to 89 days; inventory reduction and cash generation drove $37M FCF in Q4 and $156M for FY .
  • What Went Wrong
    • AC&C down 48% YoY, driven by completion of large HPC programs and communications weakness; Medical down 7% YoY due to inventory rebalancing in devices .
    • Non-GAAP operating margin dipped 20 bps QoQ and 40 bps YoY due to higher variable compensation, despite solid gross margin performance .
    • Management flagged continued AC&C pressure through H1 2025 and softer industrial conditions in Europe (≈10% of revenue) .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$666 $658 $657
GAAP Diluted EPS ($)$0.43 $0.42 $0.50
Non-GAAP Diluted EPS ($)$0.57 $0.57 $0.61
GAAP Gross Margin (%)10.2% 10.1% 10.3%
Non-GAAP Gross Margin (%)10.2% 10.2% 10.4%
GAAP Operating Margin (%)4.1% 4.3% 4.3%
Non-GAAP Operating Margin (%)5.1% 5.3% 5.1%
Metric vs Prior Year (Q4 2023)Q4 2023Q4 2024
Revenue ($USD Millions)$691 $657
GAAP Diluted EPS ($)$0.49 $0.50
Non-GAAP Diluted EPS ($)$0.65 $0.61
GAAP Operating Margin (%)4.6% 4.3%
Non-GAAP Operating Margin (%)5.5% 5.1%

Segment Breakdown

SegmentQ2 2024 ($M)Q2 2024 (%)Q3 2024 ($M)Q3 2024 (%)Q4 2024 ($M)Q4 2024 (%)
Semi-Cap$172 26% $188 28% $198 30%
Complex Industrials$142 21% $151 23% $140 21%
Medical$111 17% $107 16% $117 18%
A&D$109 16% $102 16% $117 18%
AC&C$132 20% $110 17% $85 13%
Total$666 100% $658 100% $657 100%

KPIs

KPIQ2 2024Q3 2024Q4 2024
Cash Conversion Cycle (days)90 90 89
Accounts Receivable Days51 51 57
Contract Asset Days25 26 23
Inventory Days90 89 85
Accounts Payable Days(52) (54) (54)
Advance Payments from Customers Days(24) (22) (22)
Operating Cash Flow ($M)$55.8 $39.0 $45.9
Free Cash Flow ($M)$47.3 $29.2 $36.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q1 2025N/A$620–$660 New
Non-GAAP Gross Margin (%)Q1 2025N/A10.0–10.2 New
Non-GAAP SG&A ($M)Q1 2025N/A$34–$36 New
Non-GAAP Operating Margin (%)Q1 2025N/A4.5–4.7 New
Non-GAAP EPS ($)Q1 2025N/A$0.48–$0.54 New
Interest & Other ($M)Q1 2025N/A$4–$5 New
Effective Tax Rate (%)Q1 2025N/A23–24 New
Weighted Avg Shares (M)Q1 2025N/A~37.3 New
CapEx ($M)Q1 2025N/A$15–$20 New
CapEx ($M)FY 2025N/A$65–$75 New
Free Cash Flow ($M)FY 2025N/A$50–$80 New
Dividend per Share ($)Q4 2024$0.17 declared $0.17 payable Jan 14, 2025 Maintained

Additional reference: Q4 2024 guidance issued on Oct 30, 2024 was revenue $640–$680M and non-GAAP EPS $0.53–$0.59; actual Q4 non-GAAP EPS was $0.61, a beat vs guidance .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Semi-Cap cycle and share gainsEarly recovery signs; low double-digit 2024 Semi-Cap growth; capacity added in Penang; wins across engineering and machining +18% YoY in Q4; double-digit growth expected in Q1 and FY 2025; continued wins and share gains Improving; acceleration expected
AC&C (HPC/communications)Declines from completed HPC programs; customer disengagement; new wireless transport wins to contribute in H2 2025 −48% YoY; lull due to next-gen HPC transition; ramping new comms product line; growth late 2025 Near-term headwind; late-2025 recovery
Medical demand/inventory digestionDown 23% YoY; stabilization expected; biotech/life sciences wins; monitor solutions −7% YoY; +9% QoQ; management sees flat 2025 revenue, bookings in life sciences and devices Stabilizing; gradual improvement
Industrial demand and outsourcingSpecialty industrial/automation wins; structural EMS growth cycle; expansion in Romania +5% YoY in Q4; low-to-mid single-digit growth expected FY 2025; macro challenges persist Gradual improvement
A&D strength+36% YoY in Q2; supply chain improved; new defense/aero/space programs +15% YoY in Q4; continued double-digit growth expected; DHS surveillance program expansion Strong and sustained
Tariffs/nearshoring and regional exposureCapacity expansion in Mexico/Romania; customer interest in near/onshoring Watching Mexico/China tariff dynamics; ~10% revenue in Europe; domestic footprint a positive Tailwind for footprint; Europe soft

Management Commentary

  • “The fourth quarter and fiscal year 2024 continue to demonstrate our operational execution… outstanding year in margin expansion and free cash flow generation.” — CEO Jeff Benck .
  • “We are anticipating an improved demand environment as we progress through 2025 that should support our return to revenue growth… with earnings growth outperforming revenue.” — CEO Jeff Benck .
  • “We expect non-GAAP gross margin to be between 10% and 10.2%… non-GAAP operating margin to be between 4.5% and 4.7%… non-GAAP diluted EPS $0.48 to $0.54.” — CFO Bryan Schumaker (Q1 2025 guidance) .
  • “We are breaking ground on our fourth building in Penang, Malaysia in support of our ongoing momentum in the Semiconductor Capital Equipment sector.” — Company press release .

Q&A Highlights

  • Semi-Cap outlook: Growth driven by both share gains and improving demand (front-end wafer fab exposure highlighted). Management anticipates growing faster than the broader market .
  • Margin leverage: Capacity in Guadalajara, Romania, Penang provides operating leverage as utilization rises; Penang IV depreciation impact expected to be modest .
  • Engineering and Precision Technology: Vertical integration capabilities (frames, machining, subassemblies, integration) differentiate Benchmark and support margin profile .
  • Working capital and margins: Variable comp and tax seasonality affect Q1 expense; inventory turns targeted to improve from ~4 toward historical 5–5.5 .
  • AC&C transition: Lull between HPC generations; ramp of a new communications product line expected to contribute later in 2025 .

Estimates Context

Consensus estimates from S&P Global were unavailable for this session; the API returned a request-limit error, so we could not compare reported results to Wall Street consensus. We benchmarked results against company-issued guidance where applicable . Values from S&P Global were not retrieved due to system limits; normally, EPS and revenue consensus would be shown here with beat/miss status.

MetricQ4 2024 Consensus (S&P Global)ActualBeat/Miss
Primary EPS ($)Unavailable (S&P Global limit)$0.61 (non-GAAP) N/A
Revenue ($M)Unavailable (S&P Global limit)$657 N/A

Key Takeaways for Investors

  • Non-GAAP EPS topped company guidance on resilient margins; continued sequential FCF underscores improved working capital discipline .
  • Semi-Cap is the principal growth engine for 2025 (double-digit outlook); Penang IV capacity adds strategic leverage as wins ramp .
  • A&D momentum remains strong with defense and space programs; DHS surveillance expansion adds visibility .
  • AC&C will be a drag through H1 2025; positioning for late-2025 recovery as next-gen HPC and new comms products ramp .
  • Medical appears to be stabilizing; bookings in life sciences and monitoring solutions suggest medium-term recovery despite OEM inventory digestion .
  • Industrial improving; outsourcing trend and European softness point to a mixed backdrop, but new wins support low-to-mid single-digit FY growth .
  • Tactical stance: Favor exposure to Semi-Cap/A&D themes; near-term focus on margin/FCF continuity while monitoring AC&C and Medical inflections. Dividend maintained at $0.17; management signals higher buybacks in 2025, supportive of shareholder returns .