Renesas Electronics (6723) Q4 2025 earnings summary

Executive summary

• Q4 2025 revenue reached JPY 350.9 billion, up 19.9% year-over-year, with full-year revenue at JPY 1,321.2 billion, down 2.0% year-over-year, mainly due to automotive softness but offset by industrial/IIoT growth.

• Gross margin improved to 59.3% in Q4 2025, with full-year gross margin at 57.6%, driven by manufacturing cost reductions.

• Operating profit for Q4 2025 was JPY 108 billion (30.8% margin), with full-year non-GAAP operating profit at JPY 386.9 billion, down 2.8% year-over-year.

• Net loss attributable to owners was JPY 51.8 billion, mainly due to impairment losses and finance costs.

• Timing business to be transferred to SiTime in a $3 billion deal, with proceeds split between cash and stock, aiming for strategic partnership and future growth participation.

Financial highlights

• Q4 revenue: JPY 350.9 billion; gross margin: 59.3%; operating profit: JPY 108 billion; EBITDA: JPY 127.8 billion; net profit: JPY 90 billion.

• Full-year revenue: JPY 1,321.2 billion; gross margin: 57.6%; operating profit: JPY 386.9 billion; EBITDA: JPY 389.8 billion; net loss: JPY 51.8 billion.

• Dividend maintained at JPY 28 per share for FY2025.

• Year-over-year, revenue declined 2.0%, but gross margin improved by 1.6% due to manufacturing cost reductions.

• EBITDA margin for 2025 at 35.2%; free cash flow: JPY 328.2 billion.

Outlook and guidance

• Q1 2026 revenue forecast: JPY 375 billion, up 6.9% quarter-on-quarter and up to 23.9% year-over-year; gross margin: 58.5%; operating margin: 32%.

• AI and data center demand expected to remain strong; automotive and IIoT to see moderate growth.

• Inventory days target raised from 120 to 150 days to buffer against supply chain risks and meet AI/data center demand.

• Proceeds from timing business sale may be used for debt repayment, shareholder returns, or growth investments.

• Dividend for FY2025 set at JPY 28 per share; future dividends undecided.