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 and operating income at ¥165.7 billion, up 101.1% year-over-year and 14.1% sequentially.

• 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 for AI, advanced logic, DRAM, and packaging.

• New product launches and a share repurchase of 2,317,000 shares (about ¥80 billion) were completed in Q1.

• PC and smartphone markets showed recovery, while memory and advanced logic/foundry investments remained restrained.

Financial highlights

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

• Free cash flow was ¥156.4 billion; cash and cash equivalents at quarter-end were ¥438.5–472.5 billion, down due to dividends, taxes, and share repurchase.

• Total assets stood at ¥2,495.5 billion; equity ratio was 70.3%.

• SG&A expenses were ¥98.2 billion, up 23.0% year-over-year but down 11.4% sequentially; R&D expenses for Q1 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%), gross profit ¥1,072 billion, operating income ¥627 billion (up 37.4%), net income ¥478 billion (up 31.3%).

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

• Dividend per share forecast revised to ¥519; total return (dividends + buybacks) expected at a record high.

• Double-digit WFE market growth expected in 2025, driven by AI, advanced logic, and memory investments.

• Six-month forecast also revised upward, reflecting strong customer capital investment trends.