Socionext (6526) Q4 2024 earnings summary

Executive summary

• FY24 net sales rose 14.8% to ¥221,246 million; operating income increased 63.6% to ¥35,510 million and profit attributable to owners of parent rose 32.2% to ¥26,134 million.

• Growth reflected higher product revenue, improved product cost ratio and yen depreciation; FY25 guidance anticipates lower sales and earnings.

Financial highlights

• Product revenue rose 16.7% to ¥182,876 million; NRE revenue increased 7.9% to ¥37,609 million.

• Gross profit was ¥110,003 million versus ¥88,845 million; cost of sales rose 7.0% to ¥111,243 million, below sales growth.

• R&D costs increased 8.0% to ¥53,279 million; SG&A rose 11.0% to ¥74,493 million.

• Yen depreciation added ¥11.7 billion to sales and ¥2.5 billion to operating income YoY; average rate was ¥144.6 per U.S. dollar.

• Q4 net sales declined 4.3% YoY to ¥51.6bn; operating income increased 52.4% to ¥7.6bn, with a 14.7% margin.

Outlook and guidance

• FY25 forecast: net sales ¥200,000 million, down 9.6%; operating income ¥27,000 million, down 24.0%; profit attributable to owners of parent ¥19,500 million, down 25.4%.

• FY25 basic EPS forecast is ¥109.13; dividend guidance is ¥50 per share versus FY24 actual ¥48; forecast exchange rate is ¥130 per U.S. dollar.

• New mass production is expected to represent 10% of FY25 product sales, but product revenue is forecast flat to slightly lower in real terms as special demand ends.

• FY26 sales may remain at FY25 levels or slightly lower; growth is expected from FY27 as design-win projects enter mass production, with an operating margin target in the mid-to-high teens.