Tower Semiconductor Ltd - $TSEM - Earnings Analysis: Q1 2025 revenue guidance of $358 million, +/- 5%, represents about 10% year-over-year growth.
Business Model
Tower Semiconductor generates revenue by providing technology, development, and process platforms for its customers in growing markets such as consumer, industrial, automotive, mobile, infrastructure, medical and aerospace and defense.
Revenue Sources
- RF infrastructure revenue was about $241,000,000 or 17% of corporate revenue in 2024.
- RF mobile revenue was approximately $418,000,000 20 9 percent of corporate revenue in 2024.
- Power management and discrete revenue was about $426,000,000 or 36% of our corporate revenue in 2024, broken down evenly between IC and discrete revenue.
- Sensor and display revenue was about $221,000,000 or 15% of our corporate revenue in 2024.
- Mixed signal and CMOS revenue was about 105,000,000 or 7% of corporate revenue in 2024.
Income Statement Analysis
- Revenues for the fourth quarter of 2024 were $387 million as compared to $371 million for the third quarter of 2024 and $352 million for the fourth quarter of 2023, representing 5% quarter over quarter growth and 10% year over year growth.
- Gross profit for the fourth quarter of 2024 was $87 million, compared to $84 million for the fourth quarter of 2023. During the fourth quarter of 2024, the Company took on for the first time its portion of incremental costs of the greenfield Agrate facility.
- Operating profit for the fourth quarter of 2024 was $46 million as compared to $45 million for the fourth quarter of 2023.
Balance Sheet Analysis
- Total assets increased from $2,918,517 thousands in Dec 31, 2023 to $3,080,485 thousands in Dec 31, 2024.
- Total stockholders equity increased from $2,427,039 thousands in Dec 31, 2023 to $2,640,180 thousands in Dec 31, 2024.
- Total liabilities decreased from $491,478 thousands in Dec 31, 2023 to $440,305 thousands in Dec 31, 2024.
Cash Flow Analysis
- Net cash provided by operating activities decreased from $126,098 thousands in Dec 31, 2023 to $100,816 thousands in Dec 31, 2024.
- Net cash used in investing activities decreased from $-136,426 thousands in Dec 31, 2023 to $-93,396 thousands in Dec 31, 2024.
- Net cash used in financing activities decreased from $-8950 thousands in Dec 31, 2023 to $2795 thousands in Dec 31, 2024.
Capital Allocation
The company is investing up to $300,000,000 to acquire equipment and other CapEx that Tower will own in Intel's new Mexico fab facility, enabling us to ramp up fab capacity and capabilities for our customers. In addition, dollars 500,000,000 of total cash has been allocated to make investments in equipment that Tower is to own in the 12 inches fab in Agronatti, Italy
Management Commentary
2025 revenue target: year-over-year growth, with sequential quarter-over-quarter revenue growth, and an acceleration in the second half of the year.
This momentum is fueled by increasing production shipments as our previously announced capacity investments progress through the final stages of customer qualifications.
Overall Sentiment: Positive, focused on growth and strategic investments.
Recommendation
Rating: Hold
Reason for Rating: Hold rating due to year-over-year revenue growth target, sequential quarter-over-quarter revenue growth, and an acceleration in the second half of the year
Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.
Generated on: 2/11/2025, 6:06:27 AM