Santen Pharmaceutical (4536) Q1 2026 earnings summary

Executive summary

• Q1 FY2025 revenue declined 8.1% year-over-year to JPY 68.7 billion, mainly due to NHI price revisions and inventory adjustments, with core operating profit down 38.9% and net profit attributable to owners down 44.7%.

• EBITDA decreased 33.7% year-over-year to JPY 12.0 billion.

• Performance aligns with expectations, with a skew anticipated toward H2 FY2025 for revenue and profit.

• Manufacturing of Diquas LX was re-initiated, with shipments planned for H2; new product launches and filings in myopia and glaucoma are underway.

Financial highlights

• Revenue: JPY 68.7 billion (-8.1% YoY); Core OP: JPY 9.7 billion (-38.9% YoY); Net profit: JPY 5.9 billion (-44.7% YoY).

• Gross margin decreased to 54% from 57% YoY; gross profit was JPY 37.1 billion, down 13.2% YoY.

• EBITDA fell 33.7% to JPY 12.0 billion.

• SG&A expenses slightly decreased by 0.8% to JPY 21.2 billion, while R&D expenses rose 12.8% to JPY 6.2 billion.

• Amortization on intangible assets associated with products was JPY 2.2 billion, down 10.6% YoY.

Outlook and guidance

• FY2025 guidance maintained: revenue forecast at JPY 294.0 billion (-2.0% YoY), net profit at JPY 34.0 billion (-6.2% YoY).

• Full-year revenue forecast for FY2026 is JPY 294.0 billion (+2.0% YoY), with core operating profit expected at JPY 54.0 billion (+9.1%).

• Net profit attributable to owners is projected at JPY 34.0 billion (+6.2%), with basic EPS forecast at JPY 102.66.

• H2 expected to see improved COGS ratio and normalization of channel inventory, with steady performance in EMEA and Asia.

• No changes have been made to previously announced forecasts.