Nordic Semiconductor has scheduled a combined pre-close and CMD Q&A call with the analysts covering the stock for September 27, the day after the CMD and before entering the silent period ahead of the third quarter results due on October 24th. This call is intended as a service to the analysts, and no additional new material information will be disclosed.
In connection with this, Nordic would like to remind analysts and investors about some publicly known factors relevant to consider for the quarter from our previous financial reports and earnings calls:
As noted in the financial report for the second quarter, revenue in Q3 is expected to fall within the range of USD 150-170 million with a gross margin of around 50%. Nordic also reiterates its long-term ambition to maintain a gross margin level above 50%.
Nordic’s second quarter revenue of USD 127.9 million reflected higher demand from both key customers and the broad market, as well as seasonal effects. Reported gross margin in the quarter was 42.0% including a write down of Long-range component inventory of USD 10 million. Adjusted for this, the gross margin was 49.8%, which was in line with company guiding and a sequential improvement from 48.0% in Q1 2024.
In the second quarter report, the company noted that the adverse effect of distributor inventory adjustments on reported revenue was significantly lower than in the previous quarter. Higher volume demand from a broadening customer base should indicate that the inventory adjustments are behind us at the distributor level, although individual end-customers still have excessive inventory expected to last into 2025.
Demand from the company's end-customers is expected to follow normal seasonal patterns in the second half of the year. This would typically point to strongest demand in the third quarter of the year.
Nordic had a market share of 38% of new design certifications in the Bluetooth Low Energy market in the second quarter 2024 and 42% over the last 12 months, according to FCC and Bluetooth SIG data compiled by DNB Markets. Due to new restrictions regarding distribution of FCC and Bluetooth SIG data, Nordic may be required to discontinue or modify the quarterly reporting of design win data with effect from the third quarter 2024.
The overarching goal of the new management is to return to revenue growth and restore profitability, and the reorganisation is expected to increase return on R&D investments over time. The company will share more details on its strategic direction on the upcoming Capital Markets Day on 26 September.