Nova Reports Fourth Quarter and Full Year 2023 Results
REHOVOT, Israel, Feb. 15, 2024 /PRNewswire/ -- Nova (Nasdaq: NVMI) today announced financial results for the fourth quarter and full year ended December 31, 2023.
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Fourth Quarter 2023 Highlights:
-- Quarterly revenue of $134.2 million, up 4% QoQ, exceeding the high end
of the guidance of $132 million.
-- Record GAAP net income of $38.1 million, or $1.20 per diluted share, up
13% QoQ, exceeding the high end of the guidance of $1.11.
-- Record Non-GAAP net income of $43.6 million, or $1.36 per diluted share,
up 10% QoQ, exceeding the high end of the guidance of $1.31.
-- Continued proliferation of materials and chemical metrology solutions
across both Frontend and Backend markets.
-- Expanding the adoption of optical metrology solutions among multiple
DRAM customers for High Bandwidth Memory.
Full Year 2023 Highlights:
-- Annual revenue of $517.9 million.
-- GAAP net income of $136.3 million, or $4.28 per diluted share.
-- Non-GAAP net income of $155.9 million, or $4.86 per diluted share.
-- Solidifying Nova's leadership position in materials process control.
-- Multiple PRISM wins in Memory, Logic and Hybrid Bonding customers.
GAAP Results (K)
Q4 2023 Q3 2023 Q4 2022 FY 2023 FY 2022
Revenues $134,219 $128,808 $151,238 $517,922 $570,729
Net Income $38,068 $33,689 $36,098 $136,310 $140,213
Earnings per Diluted Share $1.20 $1.06 $1.15 $4.28 $4.43
Non-GAAP Results (K)
Q4 2023 Q3 2023 Q4 2022 FY 2023 FY 2022
Net Income $43,597 $39,405 $40,778 $155,891 $161,509
Earnings per Diluted Share $1.36 $1.23 $1.28 $4.86 $5.07
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
"Nova delivered a robust quarter, exceeding the top end of our guidance for revenue and profit, concluding the fiscal year on a stronger note than initially anticipated," said Gaby Waisman, President and CEO. "Our diversified exposure across territories and markets allowed us to achieve record performance in chemical metrology and services. Nova is uniquely positioned to accelerate its market penetration in Hybrid Bonding and to capitalize on the transition to GAA through our strong position in advanced logic manufacturing. Looking forward, we see positive performance indicators across our growth engines, expected to steer Nova to a path of growth in 2024."
2024 First Quarter Financial Outlook
Management provided an outlook for the first quarter, the period ending March 31, 2024. Based on current estimates, management expects:
-- $134 million to $140 million in revenue
-- $1.00 to $1.12 in diluted GAAP EPS
-- $1.21 to $1.33 in diluted non-GAAP EPS
2023 Fourth Quarter Results
Total revenues for the fourth quarter of 2023 were $134.2 million, an increase of 4% compared with the third quarter of 2023 and a decrease of 11% compared with the fourth quarter of 2022.
Gross margin in the fourth quarter of 2023 was 55%, compared with 57% in the third quarter of 2023 and 54% in the fourth quarter of 2022.
Operating expenses in the fourth quarter of 2023 were $40.4 million, compared with $38.1 million in the third quarter of 2023 and $45.5 million in the fourth quarter of 2022.
On a GAAP basis, the Company reported net income of $38.1 million, or $1.20 per diluted share, in the fourth quarter of 2023. This is compared with net income of $33.7 million, or $1.06 per diluted share, in the third quarter of 2023, and $36.1 million, or $1.15 per diluted share, in the fourth quarter of 2022.
On a non-GAAP basis, the Company reported net income of $43.6 million, or $1.36 per diluted share, in the fourth quarter of 2023. This is compared with net income of $39.4 million, or $1.23 per diluted share, in the third quarter of 2023, and $40.8 million, or $1.28 per diluted share, in the fourth quarter of 2022.
2023 Full Year Results
Total revenues for 2023 were $517.9 million, a decrease of 9% compared to total revenues of $570.7 million for 2022.
Gross margin in 2023 was 57%, compared with 56% in 2022.
Operating expenses in 2023 were $160.9 million, compared with operating expenses of $167.0 million in 2022.
On a GAAP basis, the Company reported net income of $136.3 million, or $4.28 per diluted share, in 2023. This is compared with a net income of $140.2 million, or $4.43 per diluted share, in 2022.
On a non-GAAP basis, the Company reported net income of $155.9 million, or $4.86 per diluted share, in 2023. This is compared with net income of $161.5 million, or $5.07 per diluted share, in 2022.
Conference Call Information
Nova will host a conference call today, February 15, 2024, at 8:30 a.m. Eastern Time, to discuss the Company's fourth quarter 2023 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: 1809-213-284
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 February 15, 2024, at 11:30 a.m. Eastern Time until November 22, 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: 6569905
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, acquisition-related expenses, inventory step-up and contingent consideration revaluation, stock-based compensation expenses, revaluation of operating lease liabilities and remeasurement of intercompany loans, amortization of debt discount and 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: political, economic and military instability in Israel, including related to the recent attack by Hamas and other terrorist organizations from the Gaza Strip and Israel's war against them; 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 such as the outbreak of COVID-19; inability to protect our intellectual property; open source technology exposure; 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 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, 2022, filed with the Securities and Exchange Commission on February 28, 2023. 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 December
31,
ASSETS 2023 2022
Current assets
Cash and cash equivalents 107,574 111,121
Short-term interest-bearing bank deposits 119,850 95,305
Marketable securities 216,258 167,073
Trade accounts receivable, net 111,256 109,320
Inventories 138,198 116,600
Other current assets 17,084 13,527
Total current assets 710,220 612,946
Non-current assets
Marketable securities 191,351 153,462
Interest-bearing bank deposits and restricted cash 6,254 2,083
Deferred tax assets 23,583 20,097
Operating lease right-of-use assets 41,856 44,885
Property plant and equipment, net 66,874 55,886
Intangible assets, net 39,184 43,586
Goodwill 50,080 49,009
Other long-term assets 4,405 2,151
Total non-current assets 423,587 371,159
Total assets 1,133,807 984,105
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Convertible senior notes, net 197,678
Trade accounts payable 35,158 42,732
Deferred revenues 41,978 30,543
Operating lease current liabilities 6,703 5,968
Other current liabilities 41,294 54,825
Total current liabilities 322,811 134,068
Non-current liabilities
Convertible senior notes, net - 196,394
Operating lease long-term liabilities 39,762 43,697
Long-term deferred tax liability 10,574 12,190
Other long-term liabilities 9,908 10,793
Total non-current liabilities 60,244 263,074
Shareholders' equity 750,752 586,963
Total liabilities and shareholders' equity 1,133,807 984,105
NOVA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data) -
(Unaudited)
Three months ended Year ended
December 31,
December 31,
2023 2022 2023 2022
Revenues:
Products 104,108 123,486 405,037 464,152
Services 30,111 27,752 112,885 106,577
Total revenues 134,219 151,238 517,922 570,729
Total cost of revenues 60,207 68,817 224,745 253,759
Gross profit 74,012 82,421 293,177 316,970
Operating expenses:
Research and development, net 21,290 26,206 88,043 90,458
Sales and marketing 13,580 14,214 52,467 52,729
General and administrative 5,480 5,077 20,404 23,852
Total operating expenses 40,350 45,497 160,914 167,039
Operating income 33,662 36,924 132,263 149,931
Financing income, net 7,283 2,157 22,436 8,478
Income before taxes on income 40,945 39,081 154,699 158,409
Income tax expenses 2,877 2,983 18,389 18,196
Net income for the period 38,068 36,098 136,310 140,213
Earnings per share:
Basic 1.31 1.26 4.73 4.89
Diluted 1.20 1.15 4.28 4.43
Shares used in calculation of earnings per share
(in thousands):
Basic 28,975 28,731 28,828 28,697
Diluted 32,023 31,737 32,089 31,870
NOVA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands) - (Unaudited)
Three months ended Year ended
December 31,
December 31,
2023 2022 2023 2022
Cash flows from operating activities:
Net income 38,068 36,098 136,310 140,213
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment 2,756 2,491 10,344 8,621
Amortization of intangible assets 1,461 1,463 5,857 6,033
Amortization of premium and accretion of discount on marketable securities, net (1,134) (254) (3,001) 1,666
Amortization of debt discount and issuance costs 324 322 1,284 1,282
Share-based compensation 5,654 4,381 18,286 16,647
Net effect of exchange rate fluctuation (2,591) 412 1,754 4,523
Changes in assets and liabilities:
Trade accounts receivable, net (18,606) (9,421) (1,183) (31,634)
Inventories 2,851 (2,168) (26,000) (29,311)
Other current and long-term assets (361) 5,926 (5,752) (4,223)
Deferred taxes, net (185) (6,598) (6,241) (13,740)
Operating lease right-of-use assets 259 841 3,050 3,873
Trade accounts payable 8,917 (79) (7,807) 5,142
Deferred revenues (292) 10,492 11,391 15,243
Operating lease liabilities 2,091 115 (3,221) (6,351)
Other current and long-term liabilities (9,671) 5,548 (11,352) 1,509
Accrued severance pay, net 64 27 (188) 46
Net cash provided by operating activities 29,605 49,596 123,531 119,539
Cash flows from investment activities:
Acquisition of subsidiary, net of acquired cash - (78,469)
Change in short-term and long-term interest-bearing bank deposits 31,367 (26,517) (29,658) 129,944
Investment in marketable securities (106,695) (30,064) (273,572) (211,742)
Proceeds from maturity of marketable securities 44,443 23,390 195,087 81,325
Purchase of property and equipment (7,601) (8,429) (17,188) (21,314)
Net cash provided by (used in) investing activities (38,486) (41,620) (125,331) (100,256)
Cash flows from
financing activities:
Settlement of a contingent consideration liability - (8,480)
Purchases of treasury shares - (15,000) (112) (21,416)
Proceeds from exercise of options - 8 122 90
Net cash provided by (used in) financing activities - (14,992) 10 (29,806)
Effect of exchange rate fluctuations on cash and cash equivalents (25) (77) (2,357) (4,454)
Changes in cash and cash equivalents
and restricted cash (8,906) (7,093) (4,147) (14,977)
Cash and cash equivalents
and restricted cash
-beginning of period 116,480 118,814 111,721 126,698
Cash and cash equivalents - end of period 107,574 111,721 107,574 111,721
NOVA LTD.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(U.S. dollars in thousands, except percentage and per share data) - (Unaudited)
Three months ended
December September 30, December
31, 31,
2023 2023 2022
GAAP gross profit 74,012 72,241 82,421
Stock-based compensation* 1,537 1,173 1,148
Amortization of acquired intangible assets 1,354 1,369 1,307
Non-GAAP gross profit 76,903 74,783 84,876
GAAP gross margin as a percentage of revenues 55 % 56 % 54 %
Non-GAAP gross margin as a percentage of revenues 57 % 58 % 56 %
GAAP operating
income 33,662 34,148 36,924
Stock-based compensation* 5,654 4,571 4,381
Acquisition-related
expenses
and contingent - (752)
consideration revaluation
Amortization of acquired intangible assets 1,461 1,477 1,463
Non-GAAP operating income 40,777 40,196 42,016
GAAP operating margin as a percentage of revenues 25 % 27 % 24 %
Non-GAAP operating margin as a percentage of revenues 30 % 31 % 28 %
GAAP net income 38,068 33,689 36,098
Stock-based compensation* 5,654 4,571 4,381
Acquisition-related expenses and contingent - (752)
consideration revaluation
Amortization of acquired intangible assets 1,461 1,477 1,463
Amortization of debt discount and issuance costs 324 324 322
Revaluation of operating lease and intercompany loans (827) 423 294
Tax effect of non-GAAP adjustments (1,083) (1,079) (1,028)
Non-GAAP net income 43,597 39,405 40,778
GAAP basic earnings per share 1.31 1.17 1.26
Non-GAAP basic earnings per share 1.50 1.36 1.42
GAAP diluted earnings per share 1.20 1.06 1.15
Non-GAAP diluted earnings per share 1.36 1.23 1.28
Shares used for calculation of earnings per share
(in thousands):
Basic 28,975 28,870 28,731
Diluted 32,023 31,983 31,737
* Stock-based compensation for the three months ended December 31, 2023 included in - Cost of revenues - 1,537;
Research and development, net - 2,554; Sales and marketing - 1,039; General and administrative - 524.
NOVA LTD.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(U.S. dollars in thousands, except percentage and per share data) - (Unaudited)
Year ended December 31,
2023 2022
GAAP gross profit 293,177 316,970
Stock-based compensation* 4,946 4,166
Acquisition-related inventory step-up 5,430 5,426
Non-GAAP gross profit 303,553 329,534
GAAP gross margin as a percentage of revenues 57 % 56 %
Non-GAAP gross margin as a percentage of revenues 59 % 58 %
GAAP operating income 132,263 149,931
Stock-based compensation* 18,286 16,647
Acquisition-related inventory step-up - 2,972
Acquisition-related expenses and contingent - 2,995
consideration revaluation
Amortization of acquired intangible assets 5,857 6,033
Non-GAAP operating income 156,406 178,578
GAAP operating margin as a percentage of revenues 26 % 26 %
Non-GAAP operating margin as a percentage of revenues 30 % 31 %
GAAP net income 136,310 140,213
Stock-based compensation* 18,286 16,647
Acquisition-related inventory step-up - 2,972
Acquisition-related expenses and contingent - 2,995
consideration revaluation
Amortization of acquired intangible assets 5,857 6,033
Amortization of debt discount and issuance costs 1,284 1,282
Revaluation of operating lease liabilities (1,994) (4,174)
Tax effect of non-GAAP adjustments (3,852) (4,459)
Non-GAAP net income 155,891 161,509
GAAP basic earnings per share 4.73 4.89
Non-GAAP basic earnings per share 5.41 5.63
GAAP diluted earnings per share 4.28 4.43
Non-GAAP diluted earnings per share 4.86 5.07
Shares used for calculation of earnings per share
(in thousands):
Basic 28,828 28,697
Diluted 32,089 31,870
* Stock-based compensation for the year ended December 31, 2023, included in - Cost of revenues - 4,946; Research
and development, net - 7,736; Sales and marketing - 3,437; General and administrative - 2,167.
NOVA LTD.
SUPPLEMENTAL INFORMATION - RECONCILIATION OF FIRST QUARTER 2024
GAAP TO NON-GAAP GUIDANCE
(U.S. dollars) (Unaudited)
Low High
Estimated GAAP net income per diluted share 1.00 1.12
Estimated non-GAAP items:
Stock-based compensation 0.20 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 1.21 1.33
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
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SOURCE Nova
