Socionext (6526) Q2 2026 earnings summary

Executive summary

• Net sales for the 6 months ended September 30, 2025, were ¥87.2B, down 12.1% year-over-year, with operating income at ¥3.8B, down 75.8%, and net income at ¥2.1B, down 82.2%.

• 2Q FY26/3 net sales rose 13.5% year-over-year to ¥52.7B, driven by automotive, but operating income fell 56% to ¥2.3B due to higher product cost ratio and increased R&D.

• Product revenue rebounded in 2Q after a weak 1Q, mainly from new automotive mass production, while NRE revenue remained flat or declined.

• NRE revenue decreased 12.4% year-over-year, reflecting slower design and development milestones.

• The company continues to invest in advanced semiconductor technologies and collaborates with global partners.

Financial highlights

• 2Q FY26/3 product revenue increased 18.1% year-over-year to ¥44.5B; NRE revenue decreased 5.6% to ¥8.0B.

• Product cost ratio rose 10.3 points year-over-year to 69.4%, compressing gross margin; 1H FY26/3 product cost ratio increased to 64.3% from 56.5%.

• Operating margin for 2Q FY26/3 was 4.4%, down 7.0 points year-over-year; 1H FY26/3 operating margin was 4.3%.

• Cash and cash equivalents at period end were ¥45.7B, down ¥27.2B from March 2025; inventories rose to ¥28.2B.

• Gross profit for the period was ¥41.9B, down from ¥54.0B year-over-year.

Outlook and guidance

• FY26/3 full-year net sales forecast raised to ¥190.0B (from ¥175.0B), but operating income forecast cut to ¥10.0B (from ¥14.0B) and net income to ¥6.7B.

• Despite higher sales, profit guidance was lowered due to gross margin pressure from product mix and delayed cost reductions.

• Net income forecast for FY26/3 is ¥6.7B, with basic EPS of ¥38.17.

• FX rate assumption for 2H FY26/3 is USD/JPY 130.0; full-year sensitivity is approx. ¥1.0B per ¥1 change in net sales.

• Operating margin expected to recover in FY27/3 as product cost ratio improves and new mass production ramps up.