Samsung SDI (006400) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue was KRW 3.1 trillion, down 4% sequentially and 22.5% year-over-year, with an operating loss of KRW 591 billion and net income of KRW 5.7 billion due to gains from the polarizer film business sale.

• Revenue for the first nine months of 2025 was KRW 9.41 trillion, down 26.7% year-over-year, with an operating loss of KRW 1.42 trillion and a net loss of KRW 377 billion.

• Battery business revenue declined due to sluggish EV battery sales and tariff impacts on ESS, while electronic materials revenue rose, driven by OLED and semiconductor materials.

• Major supply agreements were signed for over 110 GWh of EV batteries, and the first round of a Korean government-led ESS project was awarded.

• Sale of the polarizer film business generated KRW 1.1 trillion in cash, strengthening financial stability.

Financial highlights

• Q3 operating loss was KRW 591 billion; pre-tax loss was KRW 430 billion, but net income was positive due to a one-time gain from the polarizer film business sale.

• Consolidated revenue for the first three quarters of 2025 was KRW 9.41 trillion, down from KRW 21.44 trillion in 2023.

• Gross margin fell to 5.5% in Q3 2025 from 8.8% in Q2 2025 and 19.3% in Q3 2024.

• Total assets increased to KRW 42.2 trillion, liabilities decreased to KRW 18.7 trillion, and equity rose to KRW 23.5 trillion.

• Cash and cash equivalents increased to KRW 2.15 trillion, supported by the capital raise and business sale.

Outlook and guidance

• EV and ESS battery demand expected to grow in Q4 due to seasonality, but U.S. EV demand may slow from subsidy expiration and tariff uncertainties.

• U.S. ESS market projected to expand, driven by AI electricity demand and renewables; local production and government programs to support growth.

• No cash dividends are planned for 2025–2027 due to negative free cash flow from ongoing investments; dividend policy will be reviewed in 2028.

• Plans to maximize EV sales in EU, start US local ESS sales, and expand into new flagship smartphone and semiconductor material markets.

• Continued investment in battery and materials capacity, focusing on long-term growth in EV and ESS markets.