Tokyo Electron (8035) Q2 2025 earnings summary

Executive summary

• Net sales for Q2 FY2025 were JPY 566.5 billion, up 2.1% sequentially and 32.4% year-over-year, with net income at JPY 117.7 billion, down 6.7% sequentially but up 60.9% year-over-year.

• H1 FY2025 net sales reached JPY 1,121.6 billion, up 36.9% year-over-year, with operating income up 75.8% to JPY 313.9 billion.

• All financial indicators for the first half of FY2025 met or exceeded guidance, driven by strong demand for AI servers, advanced packaging, and WFE market recovery.

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

• The company operates a single segment: semiconductor production equipment.

Financial highlights

• Gross profit for Q2 was JPY 259.9 billion, with a margin of 45.9%, down 1.5% sequentially but up 1.6 points year-over-year.

• Operating income for Q2 was JPY 148.1 billion, a 10.6% decline sequentially but up 54.1% year-over-year; operating margin was 26.2%.

• Cash and cash equivalents at Q2-end were JPY 525.5 billion, with free cash flow at JPY 94.1 billion.

• Net assets increased to JPY 1.798 trillion, and the equity ratio stood at 70.8%.

• Capital expenditures in Q2 FY2025 surged 202.1% year-over-year to JPY 53.3 billion.

Outlook and guidance

• FY2025 full-year net sales forecast revised upward to JPY 2.4 trillion, a 31.1% year-over-year increase, with operating income projected at JPY 680 billion and net income at JPY 526 billion.

• Net income per share forecast raised to JPY 1,140.67; annual dividend forecast increased to JPY 571 per share, payout ratio around 50%.

• R&D expenses planned at JPY 254 billion and CapEx at JPY 170 billion for FY2025, both record highs.

• Double-digit growth in the WFE market is expected for calendar 2025, driven by AI and advanced memory investments.

• Record-high half-year sales forecast for H2 FY2025 in new equipment.