Socionext Inc. · TSE:6526
Socionext — Q3 FY2025/3 Earnings Presentation
53 slides from Socionext's earnings presentation, Jan 31, 2025
Slide 1: 3Q FY2025/3 Consolidated Financial Results
3Q FY2025/3 Consolidated Financial Results January 31, 2025 Socionext Inc.
Slide 2: Disclaimer
Disclaimer This presentation has been prepared solely for the purpose of presenting relevant information regarding Socionext Inc. (“Socionext”). This presentation and the information contained herein does not constitute or form part of any offer for sale or subscription of or solicitation or invitat
Slide 3: Cautionary Note Regarding Design Win Amount and Design Win Balance
Cautionary Note Regarding “Design Win Amount” and “Design Win Balance” Cautionary Note Regarding “Design Win Amount” and “Design Win Balance” The calculation of “Design Win Amount” and “Design Win Balance” involves a considerable degree of future estimation and subjective judgment, including assumpt
Slide 4: Consolidated Financial Results for the 9 Months Ended December 31, 2024
Consolidated Financial Results for the 9 Months Ended December 31, 2024 ─ Consolidated Financial Results 3Q FY2025/3 ─ Consolidated Earnings Forecast Full-Year FY2025/3
Slide 5: 3Q FY2025/3 Consolidated Statements of Income
3Q FY2025/3 Consolidated Statements of Income (Yen in billions) FY2024/3 FY2025/3 1Q 2Q 3Q 4Q 1Q 2Q 3Q YoY YoY % Net Sales 61.4 55.5 52.7 51.6 52.8 46.4 46.1 -6.6 -12.5% Product Revenue 52.9 48.5 40.5 40.9 42.3 37.7 35.0 -5.5 -13.5% NRE Revenue 8.4 6.8 11.9 10.5 10.3 8.4 10.8 -1.1 -8.9% Others 0.1 0
Slide 6: 1-3Q FY2025/3 Consolidated Statements of Income
1-3Q FY2025/3 Consolidated Statements of Income (Yen in billions) FY2024/3 FY2025/3 1-3Q 1-3Q YoY YoY % Net Sales 169.6 145.3 -24.4 -14.4% Product Revenue 142.0 115.0 -27.0 -19.0% NRE Revenue 27.1 29.6 +2.5 +9.2% Others 0.6 0.7 +0.1 +16.9% Cost of sales 87.4 65.8 -21.6 -24.7% Product Cost Ratio 61.5
Slide 7: Quarterly Net Sales and Operating Income
Quarterly Net Sales and Operating Income Net Sales1 Operating Income1 （Yen in billions） Operating Income （Yen in billions） Product Revenue 19.4% including Margin 15.0 Special Demand 61.4 17.6% NRE Revenue 56.1 55.5 16.5% 53.9 8.4 Others 52.7 51.6 52.8 15.4% 6.8 14.7% 11.5 7.3 14.0% 46.4 46.1 42.8 11
Slide 8: Details of 3Q FY2025/3 Financial Results - YoY Changes
Details of 3Q FY2025/3 Financial Results - YoY Changes Net Sales & Operating Income Operating Income YoY Analysis （Yen in billions） Operating Income （Yen in billions） （Yen in billions） Product Revenue NRE Revenue Margin 17.6% 52.7 -2.0 46.1 11.1% 11.9 -1.3 10.8 -1.4 9.3 +0.5 9.3 40.5 35.0 5.1 5.1 1
Slide 9: Details of 3Q FY2025/3 Financial Results - QoQ Changes
Details of 3Q FY2025/3 Financial Results - QoQ Changes Net Sales & Operating Income Operating Income QoQ Analysis （Yen in billions） Operating Income （Yen in billions） （Yen in billions） Product Revenue NRE Revenue Margin 11.4% 11.1% 46.4 46.1 8.4 10.8 -1.5 +0.3 +2.3 -1.3 37.7 35.0 5.3 5.3 5.1 5.1 2 F
Slide 10: Consolidated Balance Sheet (As of December 31, 2024)
Consolidated Balance Sheet （As of December 31, 2024） Cash on Hand and in Banks (Yen in billions) (Yen in billions) As of As of Change Mar.31,2024 Dec. 31,2024 Total Assets 186.8 168.6 -18.2 69.7 69.1 74.0 69.9 53.0 55.9 Total Current Assets 138.9 123.7 -15.2 46.3 45.1 47.5 37.2 38.1 33.9 Cash on-han
Slide 11: Capex-Depreciation & Amortization / Cash Flow
Capex-Depreciation & Amortization / Cash Flow Capex1-Depreciation & Amortization2 Cash Flow2 (Yen in billions) (Yen in billions) 8 40 6 20 4 0 2 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q -20 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY22/3 FY23/3 FY24/3 FY25/3 FY22/3 FY23/3 FY24/3 FY25/3 Cap
Slide 12: Breakdown by Application Market
Breakdown by Application Market Net Sales NRE Revenue Automotive Data Center & Networking Automotive Data Center & Networking Smart Devices Industrial Smart Devices Industrial Others Others 100% 6% 100% 11% 8% 6% 6% 14% 10% 8% 16% 14% 13% 14% 23% 23% 8% 29% 27% 17% 13% 19% 11% 16% 80% 21% 80% 14% 27
Slide 13: Breakdown by Geographic Region
Breakdown by Geographic Region Net Sales NRE Revenue US China Japan Others US China Japan Others 100% 100% 10% 7% 8% 8% 10% 7% 8% 9% 12% 12% 11% 12% 11% 14% 19% 18% 80% 80% 26% 31% 20% 31% 38% 36% 44% 45% 51% 52% 60% 59% 60% 63% 21% 18% 66% 71% 55% 12% 56% 25% 20% 40% 40% 39% 33% 30% 24% 18% 17% 45%
Slide 14: Breakdown by Process Node
Breakdown by Process Node Net Sales NRE Revenue 3-7nm 10-16nm 20-28nm 40nm & above / Others 3-7nm 10-16nm 20-28nm 40nm & above / Others 100% 100% 10% 8% 14% 17% 16% 22% 25% 23% 21% 29% 25% 12% 12% 80% 42% 80% 6% 45% 43% 18% 10% 9% 6% 55% 64% 21% 19% 19% 30% 60% 22% 60% 33% 30% 28% 46% 17% 20% 28% 29
Slide 15: Consolidated Earnings FY2025/3 Full-Year Forecast
Consolidated Earnings FY2025/3 Full-Year Forecast ◼ The full-year forecasts for Net Sales and Operating Income have been revised downward by 5% and 11%, respectively, from previous forecast (October 2024) (Yen in billions) FY2024/3 FY2025/3 FY2025/3 Full-Year Forecast Full-Year Forecast Full-Year Re
Slide 16: Net Sales FY2025/3 Full-Year Forecast (vs. Apr and Oct 2024 Forecasts)
Net Sales FY2025/3 Full-Year Forecast (vs. Apr and Oct 2024 Forecasts) ◼ Net Sales, substantially (excluding the FX impact), are expected to be 15%+ below Apr forecast and 5%+ below Oct forecast • By application: decreased mainly in Data Center & Networking • By region: decreased mainly in China Net
Slide 17: Net Sales FY2025/3 Full-Year Forecast (vs. FY2024/3 Results)
Net Sales FY2025/3 Full-Year Forecast (vs. FY2024/3 Results) ◼ Product revenue expected to decrease due to: mainly weak demand for Data Center & Networking in China, weak demand for FA and office equipment, in addition to end of Special Demand. Decrease is mainly in China ◼ NRE expected to increase
Slide 18: Operating Income FY2025/3 Full-Year Forecast (vs. Apr and Oct 2024 Forecasts)
Operating Income FY2025/3 Full-Year Forecast (vs. Apr and Oct 2024 Forecasts) ◼ Operating Income expected to decrease by 3 billion yen from Apr / Oct forecast due to decrease in sales, despite positive factors including Gross Profit increase (by improvement of Cost of Sales) and FX impact Operating
Slide 19: Illustrative Image of Growth
Illustrative Image of Growth ◼ Net Sales for FY25/3~26/3, substantially (excluding FX impact), expected to decrease by approximately 15%+ from FY24/3 results and FY25/3 forecast (as of April 2024), due to factors including end of Special Demand and weak Chinese market. Growth should be accelerated a
Slide 20: Operating Margin Trend and Outlook for Future
Operating Margin Trend and Outlook for Future Copied from FY25/3 2Q presentation ◼ OP margin expected to grow again in FY2027/3 and beyond as product revenue increases though substantial figures (excl. FX impact) are expected to remain flat or decrease in FY25/3~26/3, after the growth since FY22/3 O
Slide 21: Market Trend, Background of FY2025/3 Forecast and Outlook for FY2026/3 & Beyond
Market Trend, Background of FY2025/3 Forecast and Outlook for FY2026/3 & Beyond Market Trend / Design Win Status FY2025/3 Forecast FY2026/3 & beyond Outlook Net sales to decrease by approx. 15% from FY24/3, in line ◼ Product Revenue Automotive with the initial forecast. ◼ FY26/3： − Innovation contin
Slide 22: Expanding Business in Each Application Market
Expanding Business in Each Application Market Smart Devices Industrial ◼ Demand for new technologies in smart ◼ Demand expanding for Solution SoC Advanced devices area continues to be strong due to RF business model with advanced technologies, expanding use of AI due to expanding use of AI and netwo
Slide 23: Advance Investment for Leading-Edge Technologies
Advance Investment for Leading-Edge Technologies Copied from FY25/3 2Q presentation ◼ Will continue strengthening technology capabilities and R&D structure for future growth, in FY25/3 and 26/3 Socionext’s Initiatives Technology Trend Advance investment for leading-edge technologies Into the era of
Slide 24: Transformation of Global R&D Structure
Transformation of Global R&D Structure Copied from FY24/3 4Q/Full-Year presentation ◼ Rebuilding global R&D structure in line with the change of primary business areas and the business model ◼ Reinforcing flexible and scalable “Solution SoC” development platform Measurement 2022 - Reinforce “Entire
Slide 25: Strong Design Wins
Strong Design Wins Copied from FY25/3 2Q presentation ◼ “Design Win Amount1” has more than doubled through transformation since 2018. Amount was approx. 250 billion yen in FY2024/3, the same level as in FY2023/3. ◼ Acquisition of Design Wins in the first half of FY2025/3 has been progressing smoothl
Slide 26: Increase in the ratio of large-scale Design Wins
Increase in the ratio of large-scale Design Wins Copied from FY24/3 4Q/Full-Year presentation ◼ Large-scale Design Wins have been increasing both in numbers and total amounts Significant portion of future product shipments is expected to come from large-scale projects, which will improve our busines
Slide 27: Appendix: Overview
Appendix: Overview ─ Consolidated Financial Statements ─ Breakdown of Net Sales (Quarterly) ─ Detail of Design Win ─ Company Overview and others
Slide 28: FY25/3 Consolidated Statements of Income
FY25/3 Consolidated Statements of Income (Yen in billions) FY21/3 FY22/3 FY23/3 FY24/3 FY25/3 YT3Q FY25/3E Net Sales 99.7 117.0 192.8 221.2 145.3 190.0 % YoY -4% +17% +65% +14.8% -14.4% -14.1% Product Revenue 73.1 84.6 156.8 182.9 115.0 - NRE Revenue 23.0 28.1 34.9 37.6 29.6 - Other Revenue 3.6 4.3
Slide 29: Consolidated Balance Sheets
Consolidated Balance Sheets FY25/3 FY25/3 (Yen in billion) FY21/3 FY22/3 FY23/3 FY24/3 FY21/3 FY22/3 FY23/3 FY24/3 3Q 3Q Assets Liabilities and Equity Cash on-hand and in banks 42.7 46.3 45.1 69.7 69.9 Accounts Payable-trade 12.0 16.6 23.4 15.7 11.4 Accounts receivable-trade, net 28.6 25.1 40.8 35.3
Slide 30: Breakdown by Application Market (Quarterly Ratios)
Breakdown by Application Market (Quarterly Ratios) Net Sales1 NRE Revenue1 Automotive Data Center & Networking Automotive Data Center & Networking Smart Devices Industrial Smart Devices Industrial Others Others 100% 100% 2% 4% 5% 6% 3% 3% 5% 11% 13% 11% 10% 8% 5% 6% 7% 5% 5% 8% 10% 7% 13% 7% 8% 8% 1
Slide 31: Breakdown by Geographic Region (Quarterly Ratios)
Breakdown by Geographic Region (Quarterly Ratios) Net Sales1 NRE Revenue1 US China Japan Others US China Japan Others 100% 100% 3% 4% 7% 5% 7% 8% 6% 7% 8% 9% 7% 8% 9% 8% 7% 6% 8% 11% 6% 12% 11% 12% 11% 12% 11% 12% 12% 9% 20% 22% 23% 14% 31% 80% 80% 17% 34% 30% 22% 26% 17% 24% 43% 40% 37% 39% 38% 37%
Slide 32: Breakdown by Process Node (Quarterly Ratios)
Breakdown by Process Node (Quarterly Ratios) Net Sales1 NRE Revenue1 3-7nm 10-16nm 20-28nm 40nm & above / Others 3-7nm 10-16nm 20-28nm 40nm & above / Others 100% 100% 1% 4% 8% 11% 10% 11% 6% 8% 10% 15% 15% 4% 6% 23% 23% 21% 21% 22% 23% 23% 7% 20% 21% 3% 27% 7% 31% 27% 8% 31% 10% 33% 35% 80% 40% 41%
Slide 33: Detail of Design Win Amount to Revenue
Detail of “Design Win Amount” to Revenue Illustrative Description of “Design Win Balance” Copied from FY24/3 4Q/Full-Year presentation “Design Win Balance1” ・・・ “Design win balance” (LTR; Life Time Revenue) represents our estimates of remaining accumulated “design win amount” that is associated with
Slide 34: Design Win Balance by Application Market and Region
Design Win Balance by Application Market and Region Copied from FY24/3 4Q/Full-Year presentation Automotive Japan By By DC&NW US application region1 Industrial EU SD China Others Aisa excluding China As of FY24/3 As of FY24/3 ◼ “Automotive” and “US” increased respectively following the recent strong
Slide 35: Abundant Global Design Win Balance
Abundant Global “Design Win Balance” Copied from FY25/3 2Q presentation ◼ In FY2024/3, Design Win Balance1 from “Automotive” and “Smart Devices” increased. ◼ Design Win Balance in “Data Center & Networking” expected to increase, as new business in US is in progress Automotive Data Center & Networkin
Slide 36: Socionext at a Glance
Socionext at a Glance Copied from FY24/3 4Q/Full-Year presentation ◼ Socionext has developed a new and distinctive “Solution SoC” business model to provide optimal custom SoCs to customers who need advanced and innovative chips Company Overview Business Overview (Ratio is NRE revenue breakdown for F
Slide 37: Detail of Custom SoC and ASSP
Detail of Custom SoC and ASSP Copied from FY24/3 4Q/Full-Year presentation ◼ Socionext operates mainly within Custom SoC market, where products are designed for a specific customer (Although ASSPs are designed also for specific applications, they are not designed for a specific customer ) Logic Appl
Slide 38: The Image of Timeline from Design Win to Mass Production
The Image of Timeline from Design Win to Mass Production Illustrative Description of “Design Win Amount” Copied from FY24/3 4Q/Full-Year presentation “Design Win Amount１” ・・・ “Design Win Amount” represents estimate of the lifetime demand from design projects. “Design Win Amount” is divided into NRE-
Slide 39: Transforming into a Global SoC Company with Cutting-edge Technologies
Transforming into a Global SoC Company with Cutting-edge Technologies Copied from FY24/3 4Q/Full-Year presentation ◼ Shift in NRE revenue1 composition illustrates the steady progress of our business transformation FY18/3 FY21/3 FY22/3 FY23/3 FY24/3 1% 5-7nm Advanced 28% 40% 43% 3-5nm Process Nodes 1
Slide 40: Growth strategy
Growth strategy ─ Further Growth through “Phase 2 Transformation” ─ Solution SoC Business Model ─ Growing Demand for Custom (Bespoke) SoCs ─ Positioning of Socionext in Custom SoC Market ─ Development Platform for “Entire Design” for Diverse Fields and Products and Investing in Leading-Edge Technolo
Slide 41: Further Growth through Phase Transformation
Further Growth through “Phase 2 Transformation” Copied from FY25/3 2Q presentation ◼ Aim for further growth and development through new and distinctive Solution SoC business model and “Phase 2 Transformation”, while maintaining top line growth and solid profitability achieved by “Phase 1 Transformat
Slide 42: Socionext's Mission
Socionext’s Mission Copied from FY24/3 4Q/Full-Year presentation “Together with our global partners, we bring innovation to everyone everywhere” Socionext will help to bring about a prosperous society by delivering new value to our customers and to people around the world beyond them. We will do thi
Slide 43: Transformation into Global Custom SoC Vendor in Advanced Technology Areas
Transformation into Global Custom SoC Vendor in Advanced Technology Areas Copied from FY24/3 4Q/Full-Year presentation ◼ Through a transformation of our business and company culture, Socionext has turned into a global leading custom SoC vendor with a new and distinctive business model that we refer
Slide 44: Solution SoC Business Model
Solution SoC Business Model Copied from FY24/3 4Q/Full-Year presentation ◼ Socionext has established new and distinctive “Solution SoC1” business model to provide optimal custom SoCs to customers who require advanced and innovative chips “Solution SoC” ◼ Collaborating with customer to design optimal
Slide 45: Features of Solution SoC Business Model
Features of Solution SoC Business Model Copied from FY24/3 4Q/Full-Year presentation ◼ The primary difference between “traditional ASIC2” and “Solution SoC1“ is how to interface with customers ◼ The primary difference between “Solution SoC” and “ASIC designed by ASSP vendors2“ is the breadth of opti
Slide 46: Competitive Advantages of Solution SoC Business Model
Competitive Advantages of Solution SoC Business Model Copied from FY24/3 4Q/Full-Year presentation ◼ Socionext features “Entire Design” (from SoC architecture to thermal design and quality) and “Complete Service” (full turnkey and production) and deliver unique (“Bespoke”) SoCs for all types of cust
Slide 47: Growing Demand for Custom (Bespoke) SoCs
Growing Demand for Custom (Bespoke) SoCs Copied from FY24/3 4Q/Full-Year presentation Background of Growing Demand for $Bn Custom (Bespoke) SoCs and Solution SoC partner 15 1 Emergence of new services and applications Others New services and applications emerge through evolution of technologies; Dem
Slide 48: Positioning of Socionext in Custom SoC (ASIC) Market
Positioning of Socionext in Custom SoC (ASIC) Market Copied from FY24/3 4Q/Full-Year presentation ◼ With the exception of Apple, Socionext has the 2nd largest market share of 12% within the Custom SoC(ASIC)1 market, where some players can design 5nm/3nm SoCs. Custom SoC(ASIC) 1 Market Share2 (2022-2
Slide 49: Strengthening Investments in R&D and Leading-Edge Technologies
Strengthening Investments in R&D and Leading-Edge TechnologiesCopied from FY24/3 4Q/Full-Year presentation System, subsystem configurations and bus architectures are becoming similar across Computer architecture-based design & development ◼ major applications and closer to computer architecture ◼ In
Slide 50: Advanced SoC Developments on Computer Architecture Basis in Diverse Fields
Advanced SOC Developments on Computer Architecture Basis in Diverse Fields Copied from FY24/3 4Q/Full-Year presentation ◼ Common development platform established as system configurations across major applications become similar towards computer architecture-based ◼ Addresses PPA optimization challen
Slide 51: Design Wins Expanding in Each Application Market
Design Wins Expanding in Each Application Market Copied from FY24/3 4Q/Full-Year presentation Smart Devices Industrial Advanced RF 5/7nm 5/7/12nm Test & Measurement 28nm DSLR/Action Printer P, RF, Codec, Secu Ps (IS re … cific I ), U e 5/7nm n-sp se rL o Network cameras og i at EDA Tool ic, lic AR A
Slide 52: Design Wins Expanding in Each Application Market
Design Wins Expanding in Each Application Market Copied from FY24/3 4Q/Full-Year presentation Smart Devices Industrial Application nm Customers1 Advanced Application nm Customers1 RF Major Major Players FA Players Network cameras DSLR/Action 5-12 Test & Measurement 5-28 P, RF, Codec, Secu Printer ic
Slide 53: Socionexlt’
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