Samsung SDI (006400) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue was KRW 3.1 trillion, down 4% sequentially and 22.5% year-over-year, with an operating loss of KRW 591 billion and net income of KRW 5.7 billion due to gains from the polarizer film business sale.

• Sale of the polarizer film business completed, generating KRW 1.1 trillion in cash and improving financial stability.

• Battery business revenue declined 5% sequentially and 23% year-over-year, mainly due to sluggish EV battery sales and tariff impacts on ESS; electronic materials revenue rose 6% sequentially, driven by OLED and semiconductor materials.

• Major supply agreements were signed for over 110 GWh of EV batteries, and the first round of a Korean government-led ESS project was awarded.

Financial highlights

• Q3 operating loss was KRW 591 billion; pre-tax loss was KRW 430 billion, but net income was positive due to a one-time gain from the polarizer film business sale.

• Gross margin fell to 5.5% in Q3 2025 from 8.8% in Q2 2025 and 19.3% in Q3 2024.

• EBITDA turned negative at KRW -77 billion, compared to KRW 114 billion in Q2 2025 and KRW 589 billion in Q3 2024.

• Assets increased to KRW 42.2 trillion, liabilities decreased to KRW 18.7 trillion, and equity rose to KRW 23.5 trillion, aided by FX translation effects.

• Q3 CapEx was KRW 499 billion, with a cumulative 2025 total of KRW 2.3 trillion.

Outlook and guidance

• EV and ESS battery demand expected to grow in Q4 due to seasonality, but U.S. EV demand may slow from subsidy expiration and tariff uncertainties.

• Plans to maximize EV sales in EU, start US local ESS sales, and expand into new flagship smartphone and semiconductor material markets.

• U.S. ESS market projected to expand, driven by AI electricity demand and renewables; local production and government programs to support growth.

• Small battery demand for power tools may slow, but IT device demand remains firm; semiconductor wafer production and OLED panel markets expected to grow.

• For 2026, U.S. EV battery demand growth will be limited, while Europe will see stronger demand; ESS and electronic materials businesses expected to offer growth opportunities.