Rigaku (268A) Q3 2024 earnings summary

Executive summary

• 3Q FY2024 revenue reached JPY 62.6Bn, up 11.5% YoY; operating profit was JPY 11.8Bn, up 7.7%; profit after tax rose 19.5% to JPY 9.0Bn.

• Growth was driven by strong sales to advanced logic semiconductor manufacturers, multipurpose analytical instruments, and continued shipments to China under the 2023 supplementary budget.

• Easing of component procurement delays and a weaker yen contributed positively to business performance.

• October showed steady progress, with expectations for recovery in 4Q as delayed deliveries are fulfilled.

Financial highlights

• Gross profit increased to JPY 38,262MM (up 13.4% YoY); operating profit margin was 18.9%.

• Adjusted EBITDA was JPY 15,545MM (up 8.7% YoY), margin 24.8% (down 0.6pt YoY); adjusted EPS increased 15.4% YoY to 45.4.

• Free cash flow rose 24.9% YoY to JPY 4,872MM; net cash from operating activities was JPY 8,213MM, up from JPY 5,471MM YoY.

• R&D expenses increased 29.8% YoY to JPY 4,732MM; capex nearly doubled to JPY 3,619MM due to Yamanashi Plant expansion.

• Total assets grew to JPY 166,075MM; total equity rose to JPY 74,427MM; equity ratio improved to 44.8%.

Outlook and guidance

• Targeting mid- to long-term revenue CAGR of 10% and adjusted EBITDA margin in the upper 20% range.

• R&D ratio expected to be 9%, with capex ratio at 5% over the mid- to long-term.

• Management expects recovery in 4Q as delayed deliveries are fulfilled.

• The economic outlook remains uncertain due to global inflation, geopolitical risks, and currency fluctuations.