Business Highlights Second quarter of 2024 sales increased 11% Q/Q and increased 50% Y/Y SSD controller sales:  2Q of 2024 increased 0% to 5% Q/Q and increased 25% to 30% Y/Y eMMC+UFS controller sales:  2Q of 2024 increased 25% to 30% Q/Q and increased 190% to 195% Y/Y SSD solutions sales:  2Q of 2024 increased 20% to 25% Q/Q and decreased 5% to 10% Y/Y Financial Highlights   2Q 2024 GAAP 2Q 2024 Non-GAAP • Net sales $210.7 million (+11% Q/Q, +50% Y/Y) $210.7 million (+11% Q/Q, +50% Y/Y) • Gross margin 45.9% 46.0% • Operating margin 14.6% 16.5% • Earnings per diluted ADS $0.91  $0.96 TAIPEI, Taiwan and MILPITAS, Calif., Aug. 02, 2024 (GLOBE NEWSWIRE) -- Silicon Motion Technology Corporation (NASDAQ:SIMO) ("Silicon Motion," the "Company" or "we") today announced its financial results for the quarter ended June 30, 2024.  For the second quarter of 2024, net sales (GAAP) increased sequentially to $210.7 million from $189.3 million in the first quarter of 2024. Net income (GAAP) increased to $30.8 million, or $0.91 per diluted American Depositary Share of the Company ("ADS") (GAAP), from net income (GAAP) of $16.0 million, or $0.48 per diluted ADS (GAAP), in the first quarter of 2024. For the second quarter of 2024, net income (non-GAAP) increased to $32.5 million, or $0.96 per diluted ADS (non-GAAP), from net income (non-GAAP) of $21.6 million, or $0.64 per diluted ADS (non-GAAP), in the first quarter of 2024. All financial numbers are in U.S. dollars unless otherwise noted. Second Quarter of 2024 Review "Our business was strong in the second quarter of 2024, with revenue above the high-end of our guided range and gross margins at the high-end of expectations," said Wallace Kou, President and CEO of Silicon Motion. "Our SSD controller revenue increased for the fifth consecutive quarter and strength from our eMMC and UFS business accelerated as smartphone OEMs build in anticipation for a seasonally stronger second half and modest handset industry growth this year. The first half of the year was a strong start to 2024, and we remain confident that our increasing share with flash makers and expanding product portfolio will continue to grow our business and profitability throughout this year." Key Financial Results (in millions, except percentages and per ADS amounts) GAAP Non-GAAP 2Q 2024   1Q 2024   2Q 2023   2Q 2024   1Q 2024   2Q 2023   Revenue $ 210.7   $ 189.3   $ 140.4   $ 210.7   $ 189.3   $ 140.4   Gross profitPercent of revenue   $96.845.9 %   $85.145.0 %   $56.440.2 %   $96.846.0 %   $85.245.0 %   $59.742.5 % Operating expenses $ 66.0   $ 67.2   $ 54.6   $ 62.1   $ 62.5   $ 48.0   Operating incomePercent of revenue   $30.714.6 %   $18.09.5 %   $1.81.3 %   $34.716.5 %   $22.612.0 %   $11.78.3 % Earnings per diluted ADS $ 0.91   $ 0.48   $ 0.33   $ 0.96   $ 0.64   $ 0.38   Other Financial Information (in millions) 2Q 2024 1Q 2024 2Q 2023 Cash, cash equivalents, restricted cash and short-term investments—end of period $ 343.6 $ 349.3 $ 305.0 Routine capital expenditures $ 6.3 $ 5.0 $ 4.3 Dividend payments $ 16.8 $ 16.8   -- During the second quarter of 2024, we had $10.4 million of capital expenditures, including $6.3 million for the routine purchase of testing equipment, software, design tools and other items, and $4.1 million for building construction in Hsinchu. Business Outlook"Our new programs with our flash maker customers are expected to further scale throughout this year as the move to increase outsourcing continues to build the foundation for the long-term revenue and profitability growth of our business," said Wallace Kou, President and CEO of Silicon Motion. "Our highly differentiated controller solutions for PCs and smartphones deliver high performance, higher density and lower cost solid state storage to enable cutting edge applications such as AI-at-the-edge. Despite the softness in the retail SSD market that is evident across the industry, we are confident that we can achieve our previous full-year outlook based on the ongoing strength of our growing NAND OEM business." For the third quarter of 2024, management expects: ($ in millions) GAAP Non-GAAP Adjustment Non-GAAP Revenue $205 to $216 -2.5% to +2.5% Q/Q+19% to 25% Y/Y -- $205 to $216 -2.5% to +2.5% Q/Q+19% to 25% Y/Y Gross margin 46.0% to 47.0% Approximately $0.1* 46.0% to 47.0% Operating margin 10.7% to 12.3% Approximately $6.4 to $7.4** 14.3% to 15.3% * Projected gross margin (non-GAAP) excludes $0.1 million of stock-based compensation.** Projected operating margin (non-GAAP) excludes $6.4 million to $7.4 million of stock-based compensation and dispute related expenses. For the full year 2024, management expects: ($ in millions) GAAP Non-GAAP Adjustment Non-GAAP Revenue $800 to $830+25% to 30% Y/Y -- $800 to $830+25% to 30% Y/Y Gross margin 45.9% to 46.9% Approximately $0.6* 46.0% to 47.0% Operating margin 10.9% to 13.3% Approximately $29.0 to $31.0** 14.8% to 16.8% * Projected gross margin (non-GAAP) excludes $0.6 million of stock-based compensation and restructuring charge.** Projected operating margin (non-GAAP) excludes $29.0 million to $31.0 million of stock-based compensation, dispute related expenses, restructuring charge and loss from settlement of litigation. Conference Call & Webcast:The Company's management team will conduct a conference call at 8:00 am Eastern Time on August 2, 2024.  Conference Call DetailsParticipants must register in advance to join the conference call using the link provided below. Conference access information (including dial-in information and a unique access PIN) will be provided in the email received upon registration. Participant Online Registration:https://register.vevent.com/register/BI2fe7e6f51a2f41b7963f31ce9f2d38ce A webcast of the call will be available on the Company's website at www.siliconmotion.com.  Discussion of Non-GAAP Financial Measures To supplement the Company's unaudited selected financial results calculated in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), the Company discloses certain non-GAAP financial measures that exclude stock-based compensation and other items, including gross profit (non-GAAP), operating expenses (non-GAAP), operating income (non-GAAP), net income (non-GAAP), and earnings per diluted ADS (non-GAAP). These non-GAAP measures are not in accordance with or an alternative to GAAP and may be different from similarly-titled non-GAAP measures used by other companies.  We believe that these non-GAAP measures have limitations in that they do not reflect all the amounts associated with the Company's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures.  The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measure.  We compensate for the limitations of our non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance. Our non-GAAP financial measures are provided to enhance the user's overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the non-GAAP results provide useful information to both management and investors as these non-GAAP results exclude certain expenses, gains and losses that we believe are not indicative of our core operating results and because they are consistent with the financial models and estimates published by many analysts who follow the Company.  We use non-GAAP measures to evaluate the operating performance of our business, for comparison with our forecasts, and for benchmarking our performance externally against our competitors.  Also, when evaluating potential acquisitions, we exclude the items described below from our consideration of the target's performance and valuation.  Since we find these measures to be useful, we believe that our investors benefit from seeing the results from management's perspective in addition to seeing our GAAP results.  We believe that these non-GAAP measures, when read in conjunction with the Company's GAAP financials, provide useful information to investors by offering: the ability to make more meaningful period-to-period comparisons of the Company's on-going operating results; the ability to better identify trends in the Company's underlying business and perform related trend analysis; a better understanding of how management plans and measures the Company's underlying business; and an easier way to compare the Company's operating results against analyst financial models and operating results of our competitors that supplement their GAAP results with non-GAAP financial measures. The following are explanations of each of the adjustments that we incorporate into our non-GAAP measures, as well as the reasons for excluding each of these individual items in our reconciliation of these non-GAAP financial measures: Stock-based compensation expense consists of non-cash charges related to the fair value of restricted stock units awarded to employees. The Company believes that the exclusion of these non-cash charges provides for more accurate comparisons of our operating results to our peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, the Company believes it is useful to investors to understand the specific impact of share-based compensation on its operating results. Restructuring charges relate to the restructuring of our underperforming product lines, principally the write-down of NAND flash, embedded DRAM and SSD inventory valuation and severance payments.  M&A transaction expenses consist of legal, financial advisory and other fees related to the transaction. Dispute related expenses consist of legal, consultant and other fees related to the dispute. Loss from settlement of litigation relates to an expense accrued in connection with a settlement of a lawsuit. Foreign exchange loss (gain) consists of translation gains and/or losses of non-US$ denominated current assets and current liabilities, as well as certain other balance sheet items which result from the appreciation or depreciation of non-US$ currencies against the US$. We do not use financial instruments to manage the impact on our operations from changes in foreign exchange rates, and because our operations are subject to fluctuations in foreign exchange rates, we therefore exclude foreign exchange gains and losses when presenting non-GAAP financial measures. Unrealized holding loss (gain) on investments relates to the net change in fair value of long-term investments. Silicon Motion Technology CorporationConsolidated Statements of Income(in thousands, except percentages and per ADS data, unaudited)     For Three Months Ended   For the Six Months Ended   Jun. 30,   Mar. 31,   Jun. 30,   Jun. 30,   Jun. 30,