Otsuka (4578) Q3 2025 earnings summary

Executive summary

• Revenue increased by 5.1% year-over-year to ¥1,818.7 billion, with all segments contributing to growth and business profit up 1.3% to ¥366.5 billion, driven by strong sales in key pharmaceutical and nutraceutical products.

• Operating profit surged 56.1% to ¥407.4 billion, aided by a gain from the sale of MicroPort shares and the absence of prior-year impairment losses.

• Net profit attributable to owners rose 55.3% year-over-year to ¥297.7 billion, with basic EPS increasing to ¥560.81.

• Major acquisitions included Araris Biotech AG and Otsuka ICU Medical LLC, expanding the pharmaceutical and IV solution businesses.

• Robust R&D investment continued, particularly in new indications and product launches, while SG&A expenses were tightly controlled.

Financial highlights

• Cost of sales and SG&A increased by 4.9% and 4.5% respectively, reflecting business expansion.

• R&D expenses grew 12.9% year-over-year to ¥248,648 million, supporting pipeline development.

• Cash and cash equivalents rose by ¥65,971 million to ¥492,145 million as of September 30, 2025.

• Net cash provided by operating activities was ¥318,886 million, while investing and financing activities used ¥112,269 million and ¥130,527 million, respectively.

• Foreign exchange fluctuations had a negative impact on revenue and business profit.

Outlook and guidance

• Full-year revenue guidance was revised upward to ¥2,420.0 billion (+¥40.0 billion), and business profit to ¥410.0 billion (+¥10.0 billion), reflecting forex adjustments and steady business progress.

• Operating profit forecast at ¥452,000 million, net profit forecast at ¥330,000 million, and basic EPS at ¥622.52 for FY2025.

• R&D expenses for FY2025 projected at ¥353,000 million, reflecting accelerated clinical trials.

• Management expects limited impact from U.S. pharmaceutical pricing and tariffs.