Foxconn Posts Q3 2024 Financial Results

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Revenue reached NT$1.85 trillion, and for the cumulative January-September period revenue totaled NT$4.7 trillion, both setting new highs for the same period compared to previous years. Third quarter revenue, operating profit and net profit all hit a record high for the period. Earnings per share at NT$3.55 was also a new high for the three month period of July-September. Looking forward to the fourth quarter, which has entered the traditional peak season, operations will gradually ramp up, and there is expected to be significant quarterly and annual growth. For the full-year outlook for 2024, thanks to strong demand for AI servers, the outlook for significant growth remains unchanged, but with better visibility.

Looking into 2025, Foxconn Chairman Young Liu laid out five major operating pillars: namely artificial intelligence, three major platforms (Smart Manufacturing, Smart EV, Smart City) and semiconductors. He predicted that 2025 will be the “AI Year” for the Group; at the same time, he said he is optimistic about next year, in which AI will be the most important growth driver for the Group. While inflation is likely to ease, the international political and economic situation, monetary policy and the development of the AI industry will be the most important influencing factors next year.

Regarding the prospects for AI server products, Chairman Liu said that Foxconn has the capabilities of system design, vertical integration, and global footprint in this field, and will continue to maintain its leading advantage. Based on current trends, the AI server market can continue to develop rapidly in the next few years.

In the July-September quarter, revenue reached NT$1.85 trillion, up 20% from a year earlier. At the same time, gross profit at NT$114.7 billion rose 12% on-year, operating profit at NT$54.8 billion climbed 19% on-year, and net profit (attributable to the owners of the parent company) at NT$49.3 billion gained 14% on-year. The quarter-on-quarter gains were 20%, 15%, 23%, and 41%, respectively, compared with the second quarter. Third quarter EPS at NT$3.55, was up NT$0.44, from NT$3.11 in the same period last year, and increased by NT$1.02 when compared to the second quarter. Five metrics including revenue, gross profit, operating profit, net profit, and EPS all set new highs for the third quarter.

Chief Financial Officer David Huang said that although margins in the third quarter were affected by the product mix, due to the competitive advantage of Foxconn’s operating scale, the absolute amount of gross profit, operating profit and net profit all increased compared with the same period last year. As a technology manufacturing platform service company, Foxconn will continue to maximize profits through its competitive advantages in operational scale and vertical integration.

For the first nine months of 2024, revenue at NT$4.7 trillion, was up 10% from the same period a year earlier, while at the same time, gross profit reached NT$297.9 billion, rising 8%, operating profit totaled NT$136.1 billion, gaining 16%, and net profit (attributable to the owners of the parent company) was NT$106.4 billion, climbing 20%, with the absolute amounts hitting a new high for the same period compared to previous years. EPS in the first three quarters of this year reached NT$7.67, an increase of NT$1.25, from NT$6.42 in the same period last year.

External interest in Foxconn’s view toward the United States in the aftermath of the presidential election has prompted media queries on the issue. Chairman Liu responded by saying that as a multinational enterprise, the Group is not concerned about the election itself, but is looking at factors such as investment policy, environment and business opportunities.

Chairman Liu emphasized that Foxconn, operating in America, has seen at least 11 presidential election cycles come and go. The Group's footprint in the United States is based on its corporate mission: long-term value creation; business sustainability; constant pursuit of improvement; innovation; and global perspective. This mission has been deeply cultivated for nearly four decades. In America, nearly 50 factories have been set up, more than 5,000 people employed, and annual revenue of USD 25.6 billion generated. Such results are thanks to efforts contributed by Foxconn colleagues in America.

As for Wisconsin, over the past three years, Foxconn’s investment in the state has reached USD 1 billion and the number of employees has increased by at least 42%; revenue in Wisconsin is up by 140% compared with the same period last year. From this year, Foxconn has become the largest taxpayer in Racine County. Because of Foxconn’s efforts, we have seen more companies invest locally, contributing to Wisconsin’s economy and employment.

In the long run, having the advantage of Foxconn’s global footprint and new business development opportunities, the Group's factories in Wisconsin and Texas will benefit in the fields of AI and servers; the electric vehicle factory in Ohio will continue to introduce new customers. The Group also announced new investments in the United States a few months ago, so Foxconn’s outlook in America is very positive.

Looking ahead to operating performance in the fourth quarter, in addition to the traditional peak season, the well-performing smart consumer electronics product segment is expected to show strong quarter-on-quarter growth; in terms of cloud and networking products, the demand for AI servers is strong. The cumulative revenue of AI servers in the first three quarters of this year grew more than 200% compared to the same period last year, and general server revenue also grew by more than 20%. Compared with the same period last year, strong growth will be seen.

Regarding full year 2024, the overall outlook for significant growth is unchanged, although the visibility is better than in August. Among the main products, the growth of cloud and networking products is even stronger, while components and other products are also performing strongly. For computing products, the full-year outlook for this segment has been raised to significant growth due to the effects of new products.

Foxconn leverages its competitive advantages in AI server R&D, digital manufacturing platform, vertical integration, customer relations, and global footprint. Driven by strong customer demand, revenue in AI servers has grown more than 200% in the first three quarters, and accounted for more than 40% of overall server revenue. Coupled with the growth of general-purpose servers, the cloud and networking product segment accounts for more than 30% of the Group's revenue.

Alongside strong demand for AI servers, Foxconn covers almost all segments from large cloud service providers and NCPs to top tier brand customers. In 2025, shipment volume of AI servers is expected to increase quarter by quarter, accounting for more than 50% of overall server revenue, becoming the most important driver for the company's growth.

With the upcoming launch of new AI products, Foxconn will fully grasp this wave of business opportunities and enter another stage of growth. We are not only AI suppliers, but also users of AI. With the significant increase in AI computing power, we have also begun to build a super computing center and will soon become a major manufacturing factory with AI super computing capabilities.

As Foxconn continues to invest in GenAI on the manufacturing side, the company’s Smart Manufacturing has increased revenue per employee by more than 80%, and, including AI, robotics, and automation, is collaborating with several major international partners. Foxconn’s achievements in smart manufacturing will be more significant in the future with the support of massive AI computing power.

In terms of the Smart EV platform, Foxconn showcased MODEL U, MODEL D and MODEL A at this year’s Hon Hai Tech Day (HHTD24), making its product portfolio more comprehensive and diverse. Before the end of this year, preparations for the mass production of MODEL B should be completed. As for the Smart City platform, the company is negotiating related cooperation with customers in the Americas and Japan. The CityGPT application demonstrated at HHTD24 attracted a lot of attention at home and abroad; its development will continue to deepen.

Foxconn will focus on becoming a technology manufacturing platform service company based on the foundation of its longstanding manufacturing services, plus its three major platform solutions, including Smart Manufacturing, Smart EV, and Smart City.

Earlier this week, SHARP Corp issued its fiscal year second quarter results, turning a profit for the first time in five quarters with the quarterly net profit reaching a high not seen in more than two years! Sakai Display Products (SDP) also made considerable progress in transforming into an AI data center. Regarding this, Chairman Liu said the financial results demonstrate that the worst is behind SHARP. Foxconn assisted SHARP in its transformation during this period; its strategy of focusing on brand and technology has gradually shown results.

Looking ahead, Chairman Liu said Foxconn will continue to support SHARP in its active transformation, allowing SHARP to focus on its own brand power and technological capabilities, combined with Foxconn’s new businesses, extensive product portfolio and global reach, to accelerate the upgrade of its overall transformation.