Disco (6146) Q1 2025 earnings summary

Executive summary

• Net sales for FY2025 1Q reached ¥89.9B, up 8.6% year-over-year but down 25.5% sequentially from the previous quarter.

• Operating income was ¥34.5B, a 3.3% increase year-over-year but a 33.4% decrease sequentially.

• Net income totaled ¥23.8B, nearly flat year-over-year and down 38.5% sequentially.

• Overseas sales accounted for 89.9% of total sales in 1Q FY2025.

• Comprehensive income declined to ¥23.5B from ¥25.5B year-over-year.

Financial highlights

• Gross profit margin was 68.1%, down 1.7 points year-over-year and 1.6 points sequentially.

• Operating income margin dropped below 40% for the first time in six quarters, at 38.3%.

• SG&A expenses increased 10.1% year-over-year, mainly due to higher personnel and R&D costs.

• Total assets stood at ¥620.1B, with net assets at ¥484.9B.

• Equity ratio improved to 78.0% from 75.1% sequentially.

Outlook and guidance

• 2Q FY2025 net sales forecast is ¥91.2B, with operating income projected at ¥33.2B.

• Net income for 2Q FY2025 is forecast at ¥23.5B, with shipment volume expected to decline to ¥83.6B.

• Assumed exchange rates for 2Q: 1 USD = ¥135, 1 EUR = ¥160.

• Sales of dicers, grinders, and other equipment expected to decline 25–45% quarter-over-quarter in 2Q.

• Dividend forecast revised, with annual dividend per share expected at ¥413.00.