Socionext (6526) Q2 2027 earnings summary

Executive summary

• Q2 FY2027 sales rose 14.7% YoY to ¥60.4bn; H1 sales increased 14.0% to ¥99.423bn, while H1 operating income fell 55.7% to ¥1.668bn and net profit declined 25.9% to ¥1.526bn.

• FY2027 guidance was raised to ¥225bn sales, ¥15.5bn operating income and ¥10.5bn net profit; the annual dividend forecast remains ¥50 per share.

Financial highlights

• Q2 product revenue was ¥50.2bn (+12.8% YoY) and NRE revenue ¥10.2bn (+28.4%); operating income was ¥2.3bn and net income ¥2.1bn.

• H1 product revenue grew 10.2% to ¥77.551bn and NRE revenue 32.9% to ¥21.827bn, mainly on data center and networking growth.

• H1 gross profit rose 7.8% to ¥45.191bn; cost of sales increased 19.8% to ¥54.232bn and SG&A rose 14.0% to ¥43.523bn.

• H1 ordinary income declined 19.8% to ¥2.240bn; comprehensive income was ¥1.406bn.

Outlook and guidance

• Revised FY2027 forecast: sales ¥225bn, operating and ordinary income ¥15.5bn, and net profit ¥10.5bn; basic EPS is ¥59.86.

• Versus prior guidance, sales increased ¥10bn, operating and ordinary income ¥1.5bn, and net profit ¥0.5bn, partly reflecting weaker-than-assumed H1 yen rates.

• H2 forecast assumes ¥130/$; full-scale shipments of North American data center and automotive products are scheduled from H2 FY2027 and thereafter.

• Annual dividend forecast remains ¥50 per share, comprising ¥25 interim and ¥25 year-end.

• From FY2028, sales are expected to exceed Medium-Term Target assumptions; revenue growth is expected to offset lower product gross margin and improve operating income through leverage.