What to know:
- SK Hynix reported record Q2 revenue and profit, driven by strong AI memory demand, despite missing market estimates.
- Revenue reached 79.3 trillion won, while operating profit came in at 60.54 trillion won, both below analyst forecasts.
- Rising sales of HBM, AI server DRAM, and enterprise SSDs fueled growth, with net income soaring 1,242% year over year.
SK Hynix has posted its best-ever second-quarter earnings report due to increased demand for its memory products related to artificial intelligence (AI). While SK Hynix has posted its best-ever quarterly revenue and net income, both numbers have missed analysts’ projections, resulting in a mixed investor response.
This manufacturer claimed that its sustained investment in AI infrastructure had enabled an increase in the sales of its valuable products, such as HBM, AI server DRAM, and enterprise SSDs (eSSDs). But its stock declined right after its earnings announcement as the numbers reported were below analysts’ expectations.
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SK Hynix Delivers Record Quarterly Performance
According to the company’s latest earnings report, SK Hynix has made 79.3 trillion won in second-quarter revenue, which is less than the 84 trillion won that market analysts estimated through LSEG SmartEstimates.
The operating profit was 60.54 trillion won, below the analyst estimate of 64 trillion won.
Despite falling short of estimates, the firm managed to have its best quarter to date. Revenue grew 257% from the corresponding period a year ago, and the operating profit surged 557% year over year, driving the operating margin up to 76%.
Net income climbed to 93.92 trillion won, marking a 1,242% increase from a year earlier.
It also maintained the momentum from the previous quarter. In comparison with the first quarter, revenues increased by 51% and operating profits by 61%. Also, SK Hynix has exceeded 100 trillion won for the first time in its history in cumulative revenues in the first half.
AI Memory Products Continue Driving Growth
According to SK Hynix, the company’s exceptional performance during this period is attributable to the rising expenditures on AI infrastructure globally.
An increase in demand for AI servers led to higher sales of high-margin memory products, which contributed to an increase in prices for DRAM and NAND flash memory.
The firm reported that it was able to boost its sales of high-margin products including HBM, AI server DRAM and enterprise SSDs.
Furthermore, SK Hynix was able to fortify its financial standing during the period. Its cash and cash equivalents totaled 88 trillion won, and its net cash amounted to 69.4 trillion won.
On another note, the company mentioned that it will be extending its multi-year supply contracts in order to have stable supply for the increasing AI demand.
Stock Sees Mixed Reaction After Earnings
Though the company reported all-time-high results, it was the earnings shortfall that dominated the minds of investors.
The stock price of SK Hynix declined by more than 3% immediately after the market opened due to the earnings report. Afterward, the share price recovered from the fall and increased by about 0.19% when the report was released.
The stock price has been trading in the positive territory year-to-date. Nonetheless, it has fallen more than 40% in the last month due to volatile price movements. It is expected that investors will follow the future memory demand and supply agreement of the firm in order to sustain its earnings growth.
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