In This Article:
Release Date: February 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Nova Ltd (NASDAQ:NVMI) achieved record revenue and profitability in 2024, with a 30% year-over-year revenue growth reaching $672.4 million.
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The company exceeded the top end of its guidance in revenue and non-GAAP profitability for the fourth quarter.
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Nova's advanced packaging revenue more than doubled, reaching 15% of product revenue, indicating significant growth in this segment.
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The acquisition of Centronics is expected to further fuel growth in advanced packaging and diversify Nova's offerings.
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Nova's service division delivered a record year with 19% revenue growth, driven by increasing demand for capacity and yield improvements.
Negative Points
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Operating expenses increased significantly, with a portion directed towards expanding R&D efforts.
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The company's exposure to China, which accounted for 39% of revenue, is expected to decline due to growth in advanced nodes elsewhere.
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Gross margins are at the high end of the target model, but reaching above 60% remains challenging due to product mix and market dynamics.
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The integration of Centronics, while strategic, involves risks related to post-merger integration and alignment of activities.
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The company's growth in memory sales is primarily driven by DRAM, with NAND showing weaker performance.
Q & A Highlights
Q: Can you talk about your aspirations for advanced packaging sales for the current year? A: Definitely. The advanced packaging had contributions from both our chemical metrology division and the dimensional metrology division. We expect this year to continue and grow by double-digit growth. With the addition of Centronics, we expect to fuel our growth as we move in with this platform to additional customers. - Gaby Weissman, President and CEO
Q: Can you discuss the services growth outlook for this year and any impact from the restrictions that came on late last year? A: Our model assumes service growth between 10% to 15% for 2025. We don't see a significant impact on services from the restrictions. - Guy Kisner, CFO
Q: How are you thinking about the demand for memory versus foundry logic into 2025, and which segment do you expect to grow faster? A: We expect advanced logic and advanced packaging to lead the growth in 2025, with the HPM segment as part of advanced packaging growing with metrology intensity. - Gaby Weissman, President and CEO
Q: Could you talk about the drivers that are driving the gross margin expansion in Q1 and what it would take to reach above 60% again? A: We remain committed to our target model and anticipate strong gross margins heading into 2025. Reaching above 60% is challenging, but it depends on the success of new products. - Guy Kisner, CFO