Amkor Technology’s first quarter performance saw revenue come in above Wall Street’s expectations, but the market reaction was negative, reflecting investor concerns about profitability and mixed end-market trends. Management attributed the quarter’s results to stronger-than-anticipated demand in the communications segment, particularly in premium-tier smartphones, while computing also delivered growth from data center and PC-related programs. CEO Giel Rutten noted, “Communications revenue exceeded our expectations, while other end markets performed as anticipated.” However, higher research and development costs for new packaging technologies and ongoing factory underutilization weighed on margins, highlighting challenges as the company invests for future growth.
Is now the time to buy AMKR? Find out in our full research report (it’s free).
Amkor (AMKR) Q1 CY2025 Highlights:
- Revenue: $1.32 billion vs analyst estimates of $1.28 billion (3.2% year-on-year decline, 3.6% beat)
- EPS (GAAP): $0.09 vs analyst estimates of $0.09 (in line)
- Adjusted EBITDA: $197 million vs analyst estimates of $186 million (14.9% margin, 5.9% beat)
- Revenue Guidance for Q2 CY2025 is $1.43 billion at the midpoint, above analyst estimates of $1.35 billion
- EPS (GAAP) guidance for Q2 CY2025 is $0.15 at the midpoint, missing analyst estimates by 5.5%
- Operating Margin: 2.4%, down from 5.4% in the same quarter last year
- Inventory Days Outstanding: 26, up from 20 in the previous quarter
- Market Capitalization: $4.98 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Amkor’s Q1 Earnings Call
- Charles Shi (Needham): asked about the drivers behind strong sequential growth guidance and the possibility of pull-ins related to tariff concerns. CEO Giel Rutten clarified that growth is not due to market pull-ins but reflects genuine demand in communications and computing.
- Ben Reitzes (Melius Research): inquired about margin prospects and communications segment strength in the second half of the year. CFO Megan Faust said gross margins should expand if utilization increases, but demand uncertainty remains due to tariffs and consumer trends.
- Randy Abrams (UBS): questioned the timeline and opportunity for the Arizona facility given TSMC’s U.S. expansion. Rutten responded that Amkor may accelerate or scale up Arizona depending on customer needs and sees complementary opportunities with TSMC.
- Craig Ellis (B. Riley Securities): sought clarification on the revenue impact timing of new RDL programs and the linearity of communications strength. Rutten indicated RDL investments would begin generating revenue this year, with communications showing steady improvement through the quarter.
- Tom Diffely (D.A. Davidson): asked about margin drivers and cost of goods sold trends. Faust attributed lower margins versus last year to the Vietnam factory moving to production, which increased costs by about 100 basis points.
Catalysts in Upcoming Quarters
Heading into the next few quarters, the StockStory team will monitor (1) the timeline and capacity ramp of the Arizona advanced packaging facility, (2) sustained momentum in computing and communications programs, particularly as new customer projects ramp, and (3) the impact of evolving tariffs and trade regulations on global supply chains and customer demand. Progress in optimizing factory utilization and margin recovery will also be key areas of focus.
Amkor currently trades at $20.50, up from $17.48 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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