Slight increase in revenue and earnings in Q3 FY 2024

In the third quarter of the 2024 fiscal year, Infineon’s Group revenue improved slightly to €3,702 million, up 2 percent from the revenue generated in the prior quarter of €3,632 million.

The main contributors to this increase in revenue were the Automotive (ATV) and Power & Sensor Systems (PSS) segments. Revenue in the Green Industrial Power (GIP) and Connected Secure Systems (CSS) segments was virtually unchanged from the previous quarter.

The gross margin in the third quarter of the current fiscal year rose to 40.2 percent, compared with 38.6 percent in the prior quarter. The adjusted gross margin increased to 42.2 percent, compared with 41.1 percent in the second quarter.

The Segment Result improved in the third quarter of the 2024 fiscal year to €734 million, from €707 million in the prior quarter. The Segment Result Margin rose to 19.8 percent, from 19.5 percent in the second quarter.

The Non-Segment Result for the third quarter of the 2024 fiscal year was a net loss of €215 million, compared with a net loss of €211 million in the prior quarter. The third-quarter Non-Segment Result comprised €71 million relating to cost of goods sold, €15 million relating to research and development expenses and €54 million relating to selling, general and administrative expenses. In addition, it included net other operating expenses of €75 million. A significant component of this figure corresponded to write-downs of plant and machinery at the Regensburg site that can now only be used to a limited extent or not at all in connection with the "Step Up" structural improvement program.

In the third quarter of the 2024 fiscal year, operating profit improved to €519 million, up from €496 million in the prior quarter.

The financial result in the third quarter of the current fiscal year was a net loss of €30 million, compared with a net loss of €12 million in the preceding quarter.

Segment earnings for the third quarter of the 2024 fiscal year

Revenue in the Automotive segment rose in the third quarter of the 2024 fiscal year to €2,112 million, up from €2,078 million in the prior quarter. The 2 percent increase was the result of stronger demand in the area of software-defined vehicles including E/E architecture, benefitting in particular microcontrollers. The Segment Result improved to 537 million from €512 million in the second quarter of the current fiscal year. The Segment Result Margin rose to 25.4 percent, up from 24.6 percent in the prior quarter.

In the third quarter of the 2024 fiscal year, revenue in the Green Industrial Power segment remained virtually unchanged from the prior quarter at €475 million, compared with €469 million in the second quarter of the fiscal year. Demand in the areas of electric buses and trucks, trains as well as home appliances increased slightly, while demand was somewhat lower in automation and industrial drives as well as air conditioning systems. The Segment Result achieved in the third quarter of the current fiscal year was €88 million, compared with €89 million in the second quarter of the 2024 fiscal year. The Segment Result Margin was 18.5 percent, compared with 19.0 percent in the prior quarter.

Revenue in the Power & Sensor Systems segment rose in the third quarter of the 2024 fiscal year by 5 percent to €749 million, up from €713 million in the prior quarter. The reason for the increase in revenue was rising demand for components in the area of servers and data centers as well as USB controllers and silicon microphones. The Segment Result increased in the third quarter of the current fiscal year to €70 million, up from €64 million in the prior quarter. The Segment Result Margin improved slightly to 9.3 percent, from 9.0 percent in the second quarter.

Revenue in the Connected Secure Systems segment remained virtually unchanged in the third quarter of the 2024 fiscal year at €366 million, compared with €371 million in the prior quarter. Demand in the area of Wi-Fi was slightly weaker, while it remained more or less unchanged in other applications compared with the previous quarter. At €42 million, the Segment Result remained unchanged. The Segment Result Margin improved slightly to 11.5 percent, up from 11.3 percent in the second quarter of the current fiscal year.

Outlook for the fourth quarter of the 2024 fiscal year and the 2024 fiscal year

Assuming an exchange rate of US$1.10 to the euro, Infineon expects to generate revenue of around €4.0 billion in the fourth quarter of the 2024 fiscal year. It is anticipated that revenue will increase in all four segments compared with the preceding quarter. In the Power & Sensor Systems and Connected Secure Systems segments, the growth rate is expected to significantly exceed the forecast growth rate for the Group. In the Automotive and Green Industrial Power segments, the growth rate is expected to be lower than the average rate for the Group. It is expected that the Segment Result Margin will be around 20 percent.

Based on the results for the first three quarters and the outlook for the fourth quarter, Infineon expects to generate revenue of around €15.0 billion in the 2024 fiscal year. In the Automotive segment, revenue growth for the year is expected to be about 3 percent. The decrease in revenue in the Green Industrial Power segment is expected to be a low-teens percentage figure. The decline in revenue in the Power & Sensor Systems segment compared with the prior fiscal year is forecast to be in the high-teens and in the Connected Secure Systems segment in the mid-twenties percentage range. With expected Group revenue in the 2024 fiscal year of €15.0 billion, the adjusted gross margin is still forecast to be in the low-forties percentage range and the Segment Result Margin to be around 20 percent.