SK hynix (000660) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached KRW 17.64 trillion, the second highest ever, up 42% year-over-year but down 11% sequentially, driven by strong AI-related memory demand and high-value DRAM products.

• Operating profit was KRW 7.44 trillion with a 42% margin, up 158% year-over-year, and net profit was KRW 8.11 trillion, up 323% year-over-year, reflecting robust profitability.

• HBM and high-performance DRAM products drove growth, while NAND faced weaker demand but benefited from industry production cuts.

• Operating margin improved for the 8th consecutive quarter, reaching 42%.

• Strong results attributed to rapid memory market growth driven by AI system development and inventory accumulation.

Financial highlights

• EBITDA was KRW 10.77 trillion with a 61% margin; gross margin improved to 57% from 39% a year ago.

• Cash and cash equivalents rose to KRW 14.3 trillion at quarter-end; net debt increased to KRW 9 trillion.

• Net debt-to-equity ratio improved to 11% from 53% a year earlier; debt ratio at 29%.

• Basic EPS increased to KRW 11,756 from KRW 2,788 year-over-year.

• DRAM revenue declined high single digits QoQ, with ASP flat; NAND revenue declined high teens QoQ, with ASP down ~20%.

Outlook and guidance

• Expects low teens percent sequential increase in DRAM shipments and over 20% growth in NAND shipments for Q2.

• HBM demand is forecasted to double year-over-year, with HBM3E 12-high products comprising over half of Q2 shipments.

• Market volatility remains due to global tariff policies and macroeconomic uncertainties.

• Plans to supply new memory modules (LPCAMM2 for AI PCs and SOCAMM for AI servers) as demand ramps up.

• Market recovery for NAND in 2025 anticipated to be supply-driven; eSSD to drive mid- to long-term demand.