NTT (9432) Q1 2025 earnings summary

Executive summary

• Operating revenues reached a record high of ¥3,240 billion, up 4.1% year-over-year, driven by growth in Integrated ICT and Global Solutions segments, with a positive FX impact of ¥80 billion.

• Operating profit declined 8.2% year-over-year to ¥435.8 billion, mainly due to lower telecom service revenue, higher costs, asset removals, and disaster recovery expenses.

• Net profit attributable to NTT dropped 27.0% year-over-year to ¥274.1 billion, reflecting lower operating profit and the absence of last year's one-time share sale gains.

• EBITDA decreased 2.8% year-over-year to ¥815.3 billion.

• Comprehensive income attributable to NTT decreased 41.2% year-over-year to ¥351.7 billion.

Financial highlights

• Integrated ICT Business led revenue growth, but profit declined due to higher customer acquisition costs and declining voice service revenue.

• Regional Communications Business experienced declines in both revenue and profit, impacted by lower network revenue, asset removals, and disaster recovery costs.

• Global Solutions Business benefited from public sector and finance growth, with FX tailwinds boosting revenue; operating profit remained flat.

• Urban Solutions/Real Estate segment posted increases in both revenue and profit, supported by strong housing sales.

• Operating expenses rose by ¥167.8 billion, with notable increases in personnel and purchase expenses.

Outlook and guidance

• Performance is in line with annual guidance, with continued focus on cost reduction, customer base reinforcement, and enterprise business expansion to achieve profit targets.

• Fiscal year ending March 31, 2025 guidance: operating revenues ¥13,460 billion (+0.6%), operating profit ¥1,810 billion (–5.9%), profit attributable to NTT ¥1,100 billion (–14.0%), and basic EPS ¥13.00.

• Share buybacks of up to ¥200 billion are planned from August 2024 to March 2025 to enhance shareholder returns.

• Data center business, both domestic and overseas, is expected to expand, with revenue contributions materializing over the next 2–3 years.

• Annual dividend forecast is ¥5.20 per share, unchanged from previous guidance.