Disco (6146) Q1 2024 earnings summary

Executive summary

• Net sales for FY2024 Q1 reached ¥82.8B, up 53.4% year-over-year, but down 20.6% sequentially from Q4.

• Operating income nearly doubled year-over-year to ¥33.4B, a 96.7% increase, but declined 27.6% from the previous quarter.

• Net income rose 87.0% year-over-year to ¥23.7B, but declined 33.1% sequentially.

• Overseas sales accounted for 90.6% of total sales in Q1.

• Strong demand for IC-related equipment, especially for generative AI, drove growth.

Financial highlights

• Gross profit margin improved to 69.7% from 65.2% year-over-year.

• Ordinary income rose 85.1% to ¥33.6B year-over-year.

• Net income per share increased from ¥117.09 to ¥218.85 year-over-year.

• Shipments reached approximately ¥101.1B, a record high.

• Precision processing tool (consumables) sales hit a record high, reflecting strong customer facility operation rates.

Outlook and guidance

• Q2 FY2024 net sales forecasted at ¥85.6B, with operating income of ¥32.6B and net income of ¥23.1B.

• First-half FY2024 forecast: net sales ¥168.4B (up 33.4% YoY), net income ¥46.8B (up 43.1% YoY), operating income ¥66.0B.

• Only first-half guidance provided due to difficulty in forecasting full-year results.

• Sales of blade dicers expected to decrease 15% QoQ, while laser saws and grinders are forecasted to rise 15%.

• R&D expenses for FY24 projected at ¥30B; CAPEX at ¥16B, mainly for rationalization and facility expansion.