Noritsu Koki Co (7744) Q2 2025 earnings summary

Executive summary

• Revenue increased 5.8% year-over-year to ¥55.8 billion, driven by strong audio equipment/peripherals sales despite a forecasted decline.

• Operating profit dropped 10.6% to ¥11.1 billion; net profit declined 36.8% to ¥7.3 billion, both exceeding revised forecasts but down year-over-year due to absence of prior one-off gains.

• Comprehensive income fell sharply to ¥1,308 million from ¥17,403 million year-over-year, mainly due to negative exchange differences.

• Segment revenue rose at Alpha Theta and JLab, but declined at Teibow.

• A 3-for-1 stock split was executed on July 1, 2025, impacting EPS and dividend calculations.

Financial highlights

• Operating EBITDA fell 3.9% year-over-year to ¥13.5 billion; margin decreased to 24.2%.

• Gross profit increased to ¥28.2 billion, but higher selling and administrative expenses reduced operating profit.

• Basic EPS for the first half was ¥68.17, down from ¥107.25 year-over-year.

• All key metrics surpassed May 9 revised forecasts, with net profit at 134.4% of target.

• Cash flows from operating activities fell to ¥7.5 billion from ¥26.1 billion year-over-year, mainly due to working capital changes and higher tax payments.

Outlook and guidance

• Full-year forecasts remain unchanged due to ongoing uncertainties, despite strong first-half performance.

• Full-year FY2025 revenue is forecast at ¥110.7 billion, up 3.9% year-over-year, with operating profit expected to decline 22% to ¥16 billion.

• Profit attributable to owners of parent is projected to decrease 33.6% to ¥10.7 billion, with basic EPS forecast at ¥100.93.

• Negative impact from Teibow's writing instruments to be offset by JLab's strong sales.

• Alpha Theta's DJ app payment processor bankruptcy will persist as a headwind, but strong DJ equipment sales expected to compensate.