Samsung Electronics (005930) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was KRW 74.6 trillion, down 5.8% quarter-on-quarter but up 1% year-over-year; DS division sales rose 11% sequentially due to AI server memory demand and Foundry expansion.

• Operating profit was KRW 4.7 trillion, down from KRW 6.7 trillion in Q1, with a 6.3% margin; net profit was KRW 5.1 trillion.

• Gross profit margin decreased to 34.2% and EBITDA margin to 20% sequentially; ROE fell to 5%.

• CapEx for Q2 was KRW 11.1 trillion, mainly for DS (KRW 9.8T) and display (KRW 0.8T); net cash position at KRW 86.7T as of June 30, 2025.

• Sustainability initiatives advanced, with DX division achieving a 93.4% renewable energy transition rate and new Galaxy devices using more recycled materials.

Financial highlights

• DS division saw revenue growth from high-value memory (HBM3E, DDR5) and Foundry, but faced inventory value adjustments and one-off costs from China and US export restrictions.

• DX division's operating profit declined due to lower sales volume post-flagship launch and intensified TV competition.

• SD&A expenses reduced by KRW 0.6 trillion to KRW 20.8 trillion through cost management.

• Net profit was KRW 5.1 trillion, down from KRW 8.2 trillion in Q1.

• Earnings per share fell to KRW 737 from KRW 1,192 in Q1.

Outlook and guidance

• Gradual IT industry recovery expected in H2 2025, led by AI and robotics momentum.

• DS division targets technology innovation, inventory normalization, and strong AI-related memory demand (HBM3E, high-capacity DRAM/NAND); plans to expand DDR5 and HBM3E sales and accelerate 8th Gen V-NAND transition.

• Foundry expects improved profitability from customer base expansion and 2-nano technology; Display anticipates better results from new smartphone launches and QD-OLED monitors.

• MX division to focus on premium AI devices, new foldables, XR headset, and ecosystem expansion; emphasizes flagship and AI-driven products and cost optimization.

• Visual Display aims to drive sales of AI-enhanced TVs and maintain leadership in premium segments; Harman targets premium and AI-driven products and expanding audio and automotive sales.