SemiLEDs Corporation Reports 24% Revenue Decline, Improves Gross Profit in Latest Quarter

SemiLEDs Corporation reported a decline in financial performance for the three months ended November 30, 2024, with net revenues of $1.26 million, a decrease of 24% from $1.65 million in the same period last year. The drop in revenue was primarily attributed to a significant reduction in sales of LED components, which fell by 48% to $561,000, compared to $1.08 million in the prior year. Despite the overall revenue decline, the company experienced a slight increase in gross profit, which rose to $260,000, up from $245,000, resulting in a gross margin of 21%, compared to 15% in the previous year.

The company's operating expenses also decreased, totaling $917,000 for the quarter, down from $1.06 million a year earlier. This reduction was driven by lower research and development costs, which fell by 41% to $221,000, and a slight decrease in selling, general, and administrative expenses. The net loss attributable to SemiLEDs stockholders was $547,000, an improvement from a loss of $598,000 in the same quarter of 2023. The loss per share decreased to $0.08 from $0.12, reflecting a reduction in the number of shares used in the calculation, which increased from 4.89 million to 7.21 million shares.

In terms of strategic developments, SemiLEDs has focused on adjusting its product mix by exiting lower-margin product lines and enhancing its offerings in higher-margin LED modules and UV LED products. The company is also targeting niche markets to improve its gross margins and operational results. As of November 30, 2024, SemiLEDs had cash and cash equivalents of $1.25 million, down from $1.67 million at the end of August 2024, indicating a need for improved liquidity management.

Operationally, SemiLEDs continues to face challenges, including reliance on a limited number of customers, with the top ten customers accounting for 96% of total revenues. The company is also navigating a competitive landscape characterized by price pressures and fluctuating demand. Management has outlined a liquidity plan that includes cost reductions, potential equity offerings, and the sale of assets to meet its obligations and support its working capital needs.

Looking ahead, SemiLEDs anticipates that its revenue and operational performance may vary significantly in the coming quarters due to ongoing market conditions and the execution of its strategic initiatives. The company is optimistic about the potential for improved cash inflows from new product sales and cost management efforts, but acknowledges the uncertainty surrounding its ability to achieve these goals.