Renesas Q1 Net Profit Drops 30.8% Amid Weak Demand

On April 24, Renesas Electronics, a major player in the automotive semiconductor industry, released its financial results for the first quarter of 2025. On a non-GAAP basis, the company reported a 12.2% year-on-year decline in consolidated revenue, which totaled ¥308.8 billion. Consolidated operating profit dropped by 26.2%, reaching ¥83.8 billion, while net profit fell sharply by 30.8%, amounting to ¥73.3 billion.

The company attributed the decline in performance to a weakened market and reduced demand in the automotive and industrial sectors. However, the first-quarter gross profit margin stood at 56.7%, exceeding the company’s initial forecast of 54.0%. Operating profit margin also outperformed expectations, reaching 27.1%, higher than the anticipated 24.0%.

Breaking down the performance by business segments, Renesas reported a 12.8% year-on-year decrease in revenue from its "Automotive Business" (including MCU, System on Chips (SoC), analog & power control chips), which amounted to ¥155.3 billion. Operating profit in this segment fell by 19.5%, totaling ¥46.2 billion. Meanwhile, the "Industrial/Infrastructure/IoT Business" (including MCU, SoC, analog chips) saw a 12.1% drop in revenue to ¥150.8 billion, with operating profit plunging by 42.3% to ¥32.2 billion.

Looking ahead, Renesas forecasts second-quarter 2025 consolidated revenue (on a non-GAAP basis) to be ¥302.0 billion (± ¥7.5 billion), reflecting a 15.8% year-on-year decline. The gross profit margin is projected at 55.0% (down from 56.7% in the same period last year), while the operating profit margin is expected to be 25.0%, compared to 30.8% in the previous year.