Tokyo Electron (8035) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 net sales reached ¥555.0 billion, up 41.7% year-over-year and 1.4% sequentially, with gross profit at ¥264.0 billion, a 3.1% increase from the previous quarter.

• Operating income rose to ¥165.7 billion, up 101.1% year-over-year and 14.1% quarter-over-quarter, with a margin of 29.9%.

• Net income attributable to owners was ¥126.1 billion, up 96.2% year-over-year and 1.0% sequentially.

• Both sales and profit exceeded guidance, driven by strong demand in AI, advanced logic, DRAM, and packaging.

• Share repurchase of approximately ¥80 billion was completed, contributing to a record-high total return for the fiscal year.

Financial highlights

• Gross profit margin improved to 47.6%, up 6.2 percentage points year-over-year and 0.8 points sequentially.

• Operating margin increased to 29.9%, up 8.9 points year-over-year and 3.4 points sequentially.

• Free cash flow in Q1 FY2025 was ¥156.4 billion, with cash and cash equivalents at quarter-end between ¥417.5 billion and ¥472.5 billion.

• R&D expenses for Q1 FY2025 were ¥53.4 billion, up 22.4% year-over-year.

• Capital expenditures decreased 39.1% year-over-year to ¥23.9 billion.

Outlook and guidance

• FY2025 full-year estimates: net sales ¥2,300 billion (up 25.6% year-over-year), operating income ¥627 billion (up 37.4%), net income ¥478 billion (up 31.3%).

• Record-high net sales, gross profit, operating profit, net profit, and EPS anticipated for FY2025.

• R&D investment planned at ¥253 billion and CapEx at ¥170 billion, both record highs.

• Dividend per share forecast revised to ¥519, with total return expected at a record high.

• Double-digit WFE market growth expected in calendar 2025, driven by AI, DRAM, and advanced logic demand.