Disco (6146) Q4 2024 earnings summary

Executive summary

• FY2024 net sales reached a record 393.3 billion yen, up 27.9% year-over-year, driven by strong equipment shipments and high value-added products, especially for generative AI applications.

• Operating income rose 37.3% to 166.8 billion yen, with a record operating margin of 42.4%.

• Net income increased 47.1% year-over-year to 123.9 billion yen, and EPS reached a record 1,143.26 yen.

• Achieved record-high annual sales and profits for the fifth consecutive year, maintaining a four-year cumulative ordinary income margin above 40%.

• Annual dividend per share was a record 413 yen, reflecting strong profitability and surplus funds.

Financial highlights

• Gross profit margin improved to 70.6% from 67.8% year-over-year, supported by high value-added transactions and favorable exchange rates.

• Free cash flow was 52.4 billion yen, down from 81.1 billion yen the previous year, mainly due to increased CAPEX and R&D investment.

• Total assets increased to 654.1 billion yen, mainly from property, plant, and equipment investments.

• Equity ratio improved to 75.1% from 72.0% sequentially.

• Cash and cash equivalents at year-end were 229.2 billion yen, up 13.7 billion yen year-over-year.

Outlook and guidance

• FY2025 Q1 net sales forecasted at 75.0 billion yen, a sequential decline from Q4 FY2024, with operating income expected at 23.8 billion yen and net income at 16.7 billion yen.

• Operating and ordinary income margins are projected to decrease to 31.7% in Q1 FY2025.

• CAPEX for FY2025 is forecast at approximately 33 billion yen, with major investments in R&D facilities and new plant construction.

• Only one-quarter ahead guidance provided due to market volatility in semiconductor and electronic components industries.

• Company will continue proactive investments anticipating mid- to long-term semiconductor demand growth, especially for generative AI.