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Nova Reports First Quarter 2024 Financial Results

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REHOVOT, Israel, May 9, 2024 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the first quarter, the three-month period ended March 31, 2024.

 

First Quarter 2024 Highlights:

  • Quarterly revenue of $141.8 million, up 6% QoQ, exceeding the high end of the Company guidance of $140 million.
  • GAAP net income of $36.9 million, or $1.15 per diluted share, down 4% QoQ, exceeding the high end of the Company    guidance of $1.12. 
  • Record Non-GAAP net income of $44.6 million, or $1.39 per diluted share, up 2% QoQ, exceeding the high end of the Company guidance of $1.33.
  • Record operating and free cash flow.
  • Continued adoption of Nova's innovative portfolio by leading customers for cutting-edge applications in logic, memory, and advanced packaging.
  • Service business continued to expand, growing 13% year over year, driven by increasing utilization rates and tool life extensions.
  • Memory product revenue share increased to 40%, driven by advanced DRAM and HBM demand.

GAAP Results (K) 

 

Q1 2024

Q4 2023

Q1 2023

Revenues

$141,798

$134,219

$132,193

Net Income                         

$36,860

$38,068

$34,627

Earnings per Diluted Share

$1.15

$1.20

$1.10

Non-GAAP Results (K)

 

Q1 2024

Q4 2023

Q1 2023

Net Income

$44,612

$43,597

$39,075

Earnings per Diluted Share

$1.39

$1.36

$1.23

 
 

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements included in 
this release. See also "Use of Non-GAAP Adjusted Financial Measures" section.

Management Comments

"Our results this quarter exceeded the high end of the guidance we provided in revenue and profit, driven by increased demand for our state-of-the-art portfolio, and supported by a robust operational model," said Gaby Waisman, President and CEO. "Our performance was bolstered by diverse exposure to opportunities across markets, territories, customers, and technologies, which include the transition to Gate-All-Around, rising need for advanced packaging solutions, and a healthy demand for mature nodes. Our Chemical Metrology division consistently delivers solid results, penetrating multiple HBM customers. As we anticipate the transition to the most advanced technology nodes, we saw an increase in market traction for our new technologies, Elipson and Metrion, with multiple evaluations underway at various customers."

2024 Second Quarter Financial Outlook

Management provided an outlook for the second quarter, the period ending June 30, 2024. Based on current estimates, management expects:

  • $144 million to $152 million in revenue
  • $1.07 to $1.21 in diluted GAAP EPS
  • $1.27 to $1.42 in diluted non-GAAP EPS

2024 First Quarter Results

Total revenues for the first quarter of 2024 were $141.8 million, an increase of 6% compared with the fourth quarter of 2023 and an increase of 7% compared with the first quarter of 2023.

Gross margin in the first quarter of 2024 was 59%, compared with 55% in the fourth quarter of 2023 and 58% in the first quarter of 2023.

Operating expenses in the first quarter of 2024 were $46.0 million, compared with $40.4 million in the fourth quarter of 2023 and $41.5 million in the first quarter of 2023.

On a GAAP basis, the Company reported net income of $36.9 million, or $1.15 per diluted share, in the first quarter of 2024. This is compared with net income of $38.1 million, or $1.20 per diluted share, in the fourth quarter of 2023, and $34.6 million, or $1.10 per diluted share, in the first quarter of 2023.

On a non-GAAP basis, the Company reported net income of $44.6 million, or $1.39 per diluted share, in the first quarter of 2024. This is compared with net income of $43.6 million, or $1.36 per diluted share, in the fourth quarter of 2023, and $39.1 million, or $1.23 per diluted share, in the first quarter of 2023.

Conference Call Information

Nova will host a conference call today, May 09, 2024, at 8:30 a.m. Eastern Time, to discuss the Company's first quarter 2024 financial results and outlook. To attend the conference call, please dial one of the following teleconferencing numbers. Please begin by placing your calls five minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.

U.S. TOLL-FREE Dial-in Number: 1-833-816-1427
ISRAEL TOLL-FREE Dial-in Number: 1-809-213-284
INTERNATIONAL Dial-in Number: 1-412-317-0519
At:
8:30 a.m. Eastern Time
5:30 a.m. Pacific Time
3:30 p.m. Israel Time

The conference call will also be webcast live from a Link on Nova's website at https://www.novami.com/investors/events/

A replay of the conference call will be available from May 9, 2024, at 11:30 a.m. Eastern Time until May 16, 2024, at 11:59 p.m. Eastern Time. To access the replay, please dial one of the following numbers:

Replay Dial-in U.S. TOLL-FREE: 1-877-344-7529
Replay Dial-in INTERNATIONAL: 1-412-317-0088
Replay Pin Number: 6529075

A replay will also be available for 90 days on Nova's website link at https://www.novami.com/investors/events/

About Nova

Nova is a leading innovator and key provider of material, optical and chemical metrology solutions for advanced process control in semiconductor manufacturing. Nova delivers continuous innovation by providing state-of-the-art, high-performance metrology solutions for effective process control throughout the semiconductor fabrication lifecycle. Nova's product portfolio, which combines high-precision hardware and cutting-edge software, provides its customers with deep insight into developing and producing the most advanced semiconductor devices. Nova's unique capability to deliver innovative solutions enables its customers to improve performance, enhance product yields and accelerate time to market. Nova acts as a partner to semiconductor manufacturers from its offices worldwide. Additional information may be found on Nova's website link - https://www.novami.com/.
Nova is traded on the Nasdaq and TASE, Nasdaq ticker symbol NVMI.

Use of Non-GAAP Adjusted Financial Measures

This press release provides financial measures that exclude amortization of acquired intangible assets, stock-based compensation expenses, revaluation of operating lease liabilities and remeasurement of intercompany loans, amortization of issuance costs and tax effect of non-GAAP adjustment, as applicable, and are therefore not calculated in accordance with generally accepted accounting principles (GAAP). Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding Nova's performance because they reflect our operational results and enhance management's and investors' ability to evaluate Nova's performance before charges or benefits considered by management to be outside Nova's ongoing operating results. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management believes that it is in the best interest of its investors to provide financial information that will facilitate comparison of both historical and future results and allow greater transparency to supplemental information used by management in its financial and operational decision making. A reconciliation of each GAAP to non-GAAP financial measure discussed in this press release is contained in the accompanying financial tables.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future performance, such as statements regarding, but not limited to, anticipated growth opportunities and projections about our business and its future revenues, expenses and profitability. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied in those forward-looking statements. Factors that may affect our results, performance, circumstances or achievements include, but are not limited to, the following:  increased information technology security threats and sophisticated computer crime; foreign political and economic risks including supply-chain difficulties; regulations that could restrict our operations such as economic sanctions and export restrictions; changes in U.S. trade policies; indirect effects of the Russia – Ukraine conflict; market instability including inflation and recessionary pressures; risks related to doing business with China; catastrophic events; inability to protect our intellectual property; open source technology exposure, including risks related to artificial intelligence; failure to compete effectively or to respond to rapid technological changes; consolidation in our industry; difficulty in predicting the length and strength of any downturn or expansion period of the market we target; factors that adversely affect the pricing and demand for our product lines; dependency on a small number of large customers; dependency on a single manufacturing facility per product line; dependency on a limited number of suppliers; difficulty in integrating current or future acquisitions; lengthy sales cycle and customer delays in orders; risks related to conditions in Israel, including related to the war against Hamas and other terrorist organizations; risks related to our convertible notes; currency fluctuations; and quarterly fluctuations in our operating results. We cannot guarantee future results, levels of activity, performance or achievements. The matters discussed in this press release also involve risks and uncertainties summarized under the heading "Risk Factors" in Nova's Annual Report on Form 20-F for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 20, 2024. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. Nova Ltd. does not assume any obligation to update the forward-looking information contained in this press release.

 

(Tables to Follow)

 

NOVA LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands) - (Unaudited)

 
 
 

As of

 

March 31,

December 31,

ASSETS

2024

2023

Current assets

   

Cash and cash equivalents

118,106

107,574

Short-term interest-bearing bank deposits

156,618

119,850

Marketable securities

220,811

216,258

Trade accounts receivable, net

99,394

111,256

Inventories

148,421

138,198

Other current assets

20,118

17,084

Total current assets

763,468

710,220

Non-current assets

   

Marketable securities

195,136

191,351

Interest-bearing bank deposits and restricted deposits

7,716

6,254

Deferred tax assets

24,420

23,583

Operating lease right-of-use assets

40,801

41,856

Property plant and equipment, net

66,905

66,874

Intangible assets, net

36,846

39,184

Goodwill

49,401

50,080

Other long-term assets

4,879

4,405

Total non-current assets

426,104

423,587

Total assets

1,189,572

1,133,807

LIABILITIES AND SHAREHOLDERS' EQUITY

   

Current liabilities

   

   Convertible senior notes, net

198,000

197,678

Trade accounts payable

38,813

35,158

Deferred revenues

46,831

41,978

Operating lease current liabilities

6,643

6,703

Other current liabilities

48,061

41,294

Total current liabilities

338,348

322,811

Non-current liabilities

   

Operating lease long-term liabilities

38,245

39,762

Long-term deferred tax liability

10,354

10,574

Other long-term liabilities

10,844

9,908

Total non-current liabilities

59,443

60,244

Shareholders' equity

791,781

750,752

Total liabilities and shareholders' equity 

1,189,572

1,133,807

 

 

NOVA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 (U.S. dollars in thousands, except per share data) - (Unaudited)

 
 

Three months ended March 31,

 

2024

2023

Revenues:

   

Products

111,570

105,331

Services

30,228

26,862

Total revenues

141,798

132,193

Total cost of revenues

58,537

54,927

Gross profit

83,261

77,266

Operating expenses:

   

Research and development, net

24,752

22,968

Sales and marketing

16,493

13,522

General and administrative

4,796

5,039

Total operating expenses

46,041

41,529

Operating income

37,220

35,737

Financing income, net

6,000

4,728

Income before taxes on income

43,220

40,465

Income tax expenses

6,360

5,838

Net income for the period

36,860

34,627

     

Earnings per share:

   

Basic

1.27

1.21

Diluted

1.15

1.10

     

Shares used in calculation of earnings per share
 (in thousands):

   

Basic

29,030

28,678

Diluted

32,159

31,824

 

 

NOVA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands) - (Unaudited)

 
 

Three months ended March 31,

 

2024

2023

Cash flows from operating activities:

   

Net income

36,860

34,627

Adjustments to reconcile net income to net cash provided by operating activities:

   

     Depreciation of property and equipment

2,903

2,340

     Amortization of intangible assets

1,468

1,444

     Amortization of premium and accretion of discount on marketable securities, net

(1,648)

(428)

     Amortization of debt discount and issuance costs

322

316

     Share-based compensation

6,372

4,394

     Net effect of exchange rate fluctuation

1,257

1,349

Changes in assets and liabilities:

   

     Trade accounts receivable, net

11,402

8,617

     Inventories

(11,518)

(20,335)

     Other current and long-term assets

(3,482)

(8,231)

     Deferred tax assets, net

(766)

(1,937)

     Operating lease right-of-use assets

1,044

802

     Trade accounts payable

3,975

500

     Deferred revenues

4,884

(313)

     Operating lease liabilities

(1,566)

(1,645)

     Other current and long-term liabilities

7,893

1,670

     Accrued severance pay, net

38

(98)

Net cash provided by operating activities

59,438

23,072

Cash flows from investment activities:

   

Change in short-term and long-term interest-bearing bank deposits

(38,259)

(23,062)

Investment in marketable securities

(65,155)

(53,682)

Proceeds from maturity of marketable securities

57,249

41,892

Purchase of property and equipment

(2,768)

(2,758)

Net cash provided by (used in) investing activities

(48,933)

(37,610)

Cash flows from financing activities:

   

Purchases of treasury shares

-

(112)

Net cash provided by (used in) financing activities

-

(112)

Effect of exchange rate fluctuations on cash and cash equivalents

27

(996)

Changes in cash and cash equivalents and restricted cash

10,532

(15,646)

Cash and cash equivalents and restricted cash -beginning of period

107,574

111,721

Cash and cash equivalents - end of period

118,106

96,075

 

 

NOVA LTD.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(U.S. dollars in thousands, except percentage and per share data) - (Unaudited)

 
 

Three months ended

 

March 31,
2024

December 31,
2023

March 31,
2023

GAAP gross profit

83,261

74,012

77,266

Stock-based compensation*

1,763

1,537

1,165

Amortization of acquired intangible assets

1,366

1,354

1,338

Non-GAAP gross profit

86,390

76,903

79,769

GAAP gross margin as a percentage of revenues

59 %

55 %

58 %

Non-GAAP gross margin as a percentage of revenues

61 %

57 %

60 %

       

GAAP operating income

37,220

33,662

35,737

Stock-based compensation*

6,372

5,654

4,394

Amortization of acquired intangible assets

1,468

1,461

1,444

Non-GAAP operating income

45,060

40,777

41,575

GAAP operating margin as a percentage of revenues

26 %

25 %

27 %

Non-GAAP operating margin as a percentage of revenues

32 %

30 %

31 %

       

GAAP net income

36,860

38,068

34,627

Stock-based compensation*

6,372

5,654

4,394

Amortization of acquired intangible assets

1,468

1,461

1,444

Amortization of issuance costs

322

324

316

Revaluation of operating lease and intercompany loans

893

(827)

(822)

Tax effect of non-GAAP adjustments

(1,303)

(1,083)

(884)

Non-GAAP net income

44,612

43,597

39,075

       

GAAP basic earnings per share

1.27

1.31

1.21

Non-GAAP basic earnings per share

1.54

1.50

1.36

       

GAAP diluted earnings per share

1.15

1.20

1.09

Non-GAAP diluted earnings per share

1.39

1.36

1.23

       

Shares used for calculation of earnings per share
(in thousands):

     

Basic

29,030

28,975

28,678

Diluted

32,159

32,023

31,824

 

* Stock-based compensation for the three months ended March 31, 2024, included in – Cost of revenues - 1,763;
Research and development, net – 2,848; Sales and marketing – 1,253; General and administrative – 508.

 

 

NOVA LTD.

SUPPLEMENTAL INFORMATION - RECONCILIATION OF SECOND QUARTER 2024

GAAP TO NON-GAAP GUIDANCE

(U.S. dollars) (Unaudited)

 
 

Low

High

Estimated GAAP net income per diluted share

1.07

1.21

Estimated non-GAAP items:

   

Stock-based compensation

0.19

0.20

Amortization of acquired intangible assets

0.04

0.04

Amortization of issuance costs

0.01

0.01

Tax effect of non-GAAP adjustments

(0.04)

(0.04)

Estimated non-GAAP net income per diluted share

1.27

1.42

 

 

Company Contact:
Dror David, Chief Financial Officer
Tel: +972-73-229-5760
E-mail - investors@novami.com
Nova website link - https://www.novami.com/

Investor Relations Contact:
Miri Segal MS-IR LLC
Tel: +917-607-8654
E-mail - msegal@ms-ir.com 

Logo - https://mma.prnewswire.com/media/1446151/Nova_Logo.jpg [mma.prnewswire.com]

 

 

 

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