Socionext (6526) Q1 2025 earnings summary

Executive summary

• Net sales for 1Q FY25/3 were ¥52.8bn, down 14.1% year-over-year, mainly due to the end of special 5G demand from a Chinese customer, but up 2.3% sequentially.

• Operating income rose 1.5% year-over-year to ¥10.3bn, with a margin of 19.4%, and increased 35.7% sequentially.

• Profit attributable to owners of parent fell 4.8% to ¥7.6bn.

• R&D expenses increased 23% year-over-year to ¥15.0bn.

• The company is focusing on design wins in automotive and data center & networking segments.

Financial highlights

• Net sales: ¥52.8bn (–14.1% YoY, +2.3% QoQ).

• Operating income: ¥10.3bn (+1.5% YoY, +35.7% QoQ), margin 19.4%.

• Net profit: ¥7.6bn (–4.8% YoY), margin 14.3%.

• Product revenue: ¥42.3bn (–20.1% YoY); NRE revenue: ¥10.3bn (+23.1% YoY).

• Gross profit rose to ¥29.8bn, up from ¥27.0bn a year earlier.

Outlook and guidance

• FY25/3 full-year net sales forecast at ¥200bn (–9.6% YoY); operating income forecast at ¥27bn (–24.0% YoY).

• Profit forecast at ¥19.5bn (–25.4% YoY); basic EPS forecast at ¥108.92.

• Dividends per share expected to rise to ¥50.00.

• Product revenue expected to be flat or slightly lower due to end of special demand in China and weaker consumer markets; new mass production to drive future growth.