Renesas Electronics (6723): FY2025 Results Summary — Industrial Growth Offsets Automotive Decline as Wolfspeed Charges Drive a GAAP Loss

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Renesas Electronics Corporation presented its 4Q/Full-Year 2025 results on February 5, 2026. The company’s fiscal year runs from January to December, so the reported full year covers January-December 2025. On a Non-GAAP basis, full-year revenue was 1,318.5 B yen, down 2.2% year on year (-4.7% excluding FX impact), while gross margin improved 1.6pts to 57.6% and operating profit was 386.9 B yen at a 29.3% margin (-11.0 B yen, -0.2pt). On a GAAP basis, the company posted a loss attributable to owners of parent of 51.8 B yen against profit of 219.1 B yen a year earlier, reflecting Wolfspeed-related one-time expenses of 237.6 B yen recorded during the year.

Consolidated Results (Full-Year Actual)

Non-GAAP revenue of 1,318.5 B yen came in 0.8% above the midpoint of the October 30 forecast. Momentum built through the year: fourth-quarter revenue was 350.9 B yen, up 19.9% year on year (+13.2% excluding FX impact) and up 5.0% quarter on quarter, with a 59.3% gross margin and a 30.8% operating margin. Full-year EBITDA (operating profit plus depreciation and amortization) was 464.1 B yen, down 22.2 B yen, and Non-GAAP profit attributable to owners of parent was 329.3 B yen, down 31.1 B yen. Assumed rates for the full year were 1 US$ = 150 yen (1 yen appreciation year on year) and 1 Euro = 167 yen (4 yen depreciation).

Item (B yen)	FY2025 Full-Year (Jan-Dec)	FY2024 Full-Year (Jan-Dec)	Change
Revenue	1,318.5	1,348.5	-2.2%
Revenue (Excluding FX Impact)	–	–	-4.7%
Gross Margin	57.6%	56.1%	+1.6pts
Operating Profit (Margin)	386.9 (29.3%)	397.9 (29.5%)	-11.0 (-0.2pt)
Operating Expenses (Margin)	373.1 (28.3%)	358.4 (26.6%)	+14.7 (+1.7pts)
R&D (Margin)	218.2 (16.6%)	229.8 (17.0%)	-11.6 (-0.5pt)
SG&A, Others (Margin)	154.8 (11.7%)	128.5 (9.5%)	+26.3 (+2.2pts)
EBITDA	464.1	486.2	-22.2
Profit Attributable to Owners of Parent	329.3	360.4	-31.1
1 US$=	150 yen	151 yen	1 yen appreciation
1 Euro=	167 yen	164 yen	4 yen depreciation

All figures above are Non-GAAP. Renesas calculates Non-GAAP figures by removing or adjusting non-recurring items and other adjustments from GAAP (IFRS) figures, including amortization of intangible assets recognized from acquisitions and other purchase price allocation (PPA) adjustments, stock-based compensation, and other non-recurring expenses and income. On a GAAP basis the picture is materially different: full-year revenue was 1,321.2 B yen (-2.0%), operating profit was 201.2 B yen at a 15.2% margin (-21.8 B yen), EBITDA was 389.8 B yen (-43.9 B yen), and the result attributable to owners of parent was a loss of 51.8 B yen, a swing of 270.8 B yen from the prior year. The total Non-GAAP adjustment on the net profit line was -381.1 B yen for the full year, of which non-recurring items accounted for -252.3 B yen, including 237.6 B yen of Wolfspeed-related one-time expenses. Renesas notes that a 235.0 B yen impairment loss on the deposit to Wolfspeed was recorded in 2Q25, a 44.5 B yen valuation profit on other financial assets related to Wolfspeed in 3Q25, and a 47.2 B yen valuation loss in 4Q25.

Item (B yen, GAAP)	FY2025 Full-Year (Jan-Dec)	FY2024 Full-Year (Jan-Dec)	Change
Revenue	1,321.2	1,348.5	-2.0%
Gross Margin	57.1%	55.6%	+1.4pts
Operating Profit (Margin)	201.2 (15.2%)	223.0 (16.5%)	-21.8 (-1.3pts)
EBITDA	389.8	433.7	-43.9
Profit Attributable to Owners of Parent (Loss)	-51.8	219.1	-270.8

Segment Results

The two reportable segments moved in opposite directions. Automotive revenue was 639.7 B yen, down 9.0% year on year, while Industrial, Infrastructure, IoT revenue was 671.8 B yen, up 5.5%, overtaking Automotive as the larger segment for the full year. Others contributed 7.0 B yen (-21.1%). Automotive gross margin improved 1.8pts to 54.1% even as gross profit fell 21.4 B yen to 346.3 B yen; Industrial, Infrastructure, IoT gross profit rose 25.1 B yen to 410.9 B yen at a 61.2% margin (+0.6pt). Segment operating profit was 196.6 B yen for Automotive (30.7% margin, -25.9 B yen) and 169.4 B yen for Industrial, Infrastructure, IoT (25.2% margin, -4.0 B yen). In the fourth quarter alone, Automotive revenue was 163.3 B yen (+9.8% year on year, +2.6% quarter on quarter) and Industrial, Infrastructure, IoT revenue was 186.0 B yen (+32.1% year on year, +7.1% quarter on quarter).

Segment	Metric (B yen)	FY2025 Full-Year	FY2024 Full-Year	Change
Automotive	Revenue	639.7	702.8	-9.0%
Automotive	Gross Profit (Margin)	346.3 (54.1%)	367.8 (52.3%)	-21.4 (+1.8pts)
Automotive	Operating Profit (Margin)	196.6 (30.7%)	222.5 (31.7%)	-25.9 (-0.9pt)
Automotive	EBITDA	240.2	273.2	-33.0
Industrial, Infrastructure, IoT	Revenue	671.8	636.8	+5.5%
Industrial, Infrastructure, IoT	Gross Profit (Margin)	410.9 (61.2%)	385.8 (60.6%)	+25.1 (+0.6pt)
Industrial, Infrastructure, IoT	Operating Profit (Margin)	169.4 (25.2%)	173.4 (27.2%)	-4.0 (-2.0pts)
Industrial, Infrastructure, IoT	EBITDA	202.9	210.9	-8.0
Others	Revenue	7.0	8.9	-21.1%
Others	Operating Profit (Margin)	0.6 (8.6%)	1.4 (15.9%)	-0.8 (-7.3pts)
Adjustments	Operating Profit	20.3	0.6	+19.7

In the fourth quarter, Renesas attributed the company-wide gross margin of 59.3% (+2.3pts versus forecast, +1.7pts quarter on quarter) to mix improvement and decreased manufacturing costs, with Automotive gross margin at 56.5% (+1.3pts quarter on quarter) helped by decreased manufacturing costs, and Industrial, Infrastructure, IoT gross margin at 61.8% (+1.9pts quarter on quarter) helped by increased utilization and yen depreciation. Fourth-quarter operating margin was 30.8% overall, 34.5% for Automotive and 24.9% for Industrial, Infrastructure, IoT. On inventory, in-house inventory increased in the fourth quarter on higher work-in-process die bank, and Renesas said it has updated its days-of-inventory target to 150 days to address demand and production risks; sales channel inventory decreased in the quarter due to increased sell-through revenue.

1Q 2026 Forecast

Renesas reports its forecasts on a quarterly basis as a substitute for a yearly forecast, so no full-year 2026 guidance was given. For the first quarter of 2026 (January-March), the company guides to Non-GAAP revenue of 375.0 B yen with a range of ±7.5 B yen, up 21.4% year on year (±2.4pts) and up 6.9% quarter on quarter (±2.1pts); excluding FX impact, the guidance implies +17.8% year on year and +4.9% quarter on quarter. Gross margin is forecast at 58.5% (+1.8pts year on year, -0.8pt quarter on quarter) and operating margin at 32.0% (+4.9pts year on year, +1.2pts quarter on quarter), both assuming the midpoint of the revenue range. Assumed rates are 1 US$ = 154 yen and 1 Euro = 182 yen. Renesas discloses FX sensitivity for the quarter of 18 B yen of revenue and 8 B yen of operating profit per 1 yen move against the US dollar, and 2 B yen of revenue and 1 B yen of operating profit per 1 yen move against the euro.

Item (B yen, Non-GAAP)	1Q 2026 Midpoint Forecast (Range)	1Q 2025 (Actual)	4Q 2025 (Actual)
Revenue	375.0 (±7.5)	308.8	350.9
Revenue YoY	+21.4% (±2.4pts)	–	–
Revenue QoQ	+6.9% (±2.1pts)	–	–
Revenue (Excluding FX Impact), YoY / QoQ	+17.8% / +4.9%	–	–
Gross Margin	58.5%	56.7%	59.3%
Operating Margin	32.0%	27.1%	30.8%
1 US$=	154 yen	154 yen	152 yen
1 Euro=	182 yen	161 yen	176 yen

Shareholder Returns

Renesas maintained its dividend. Cash dividends are 28 yen per share, totalling 50.8 billion yen, for a dividend yield of 1.3% measured against the stock price at the end of December. The company notes that dividends were resumed in 2023 and have continued since then, remaining flat year over year. In connection with the planned transfer of its timing business, Renesas states that the use of proceeds is to be allocated to growth investments and/or shareholder returns.

On the balance sheet, total assets stood at 4,177.2 B yen at end-December 2025 with total equity of 2,448.5 B yen. Cash and cash equivalents were 295.9 B yen and interest-bearing liabilities were 1,226.8 B yen, giving a gross D/E ratio of 0.50 and a net D/E ratio of 0.38, versus 0.56 and 0.47 respectively a year earlier. The equity ratio attributable to owners of parent improved to 58.5% from 56.5%, and the net leverage ratio (net interest-bearing liabilities to Non-GAAP EBITDA) fell to 2.0 from 2.5. Inventories were 185.9 B yen and goodwill was 2,239.3 B yen. The average number of shares during the period, excluding treasury stock, was 1,813 million.

Medium-Term Plan / Topics

Renesas summarised 2025 on a Non-GAAP basis (at 1 US$ = 150 yen, 1 Euro = 167 yen) as revenue of 1,318.5 B yen, gross margin of 57.6%, operating margin of 29.3%, EBITDA margin of 35.2%, free cash flow margin of 25.1% and EPS of 182.27 yen. Revenue composition is roughly balanced between Automotive at just under 50% and Industrial, Infra and IoT at just over 50%; by product the mix is MCU 40%, SoC just under 15%, Analog just over 20%, Power just over 20% and Others 5%. Within Automotive, Control is just under 60% and Info just under 40%; within Industrial, Infra and IoT, Industrial is just over 30%, Infra 30% and IoT just under 40%.

Looking further out, Renesas frames a 2035 aspiration of a six-fold increase in market capitalization from the 2022 level, broken down into a 2x contribution from scale through execution of the mid-term plan and a 3x contribution from valuation, itself split between a valuation gap-fill and multiple expansion.

The largest portfolio action announced alongside the results is the transfer of the timing business to SiTime. The transaction value is $3bn (approximately 468bn yen at the exchange rate as of February 3, 2026 of 1 US$ = 156 yen), structured 50% cash and 50% common stock. Renesas describes the timing business as offering a broad portfolio of clock generation, distribution and synchronization solutions for digital electronic systems, with FY2024 revenue of $201.4mn (30.4bn yen at the 2024 average rate of 1 US$ = 151 yen). Closing is expected by the end of 2026, subject to regulatory approvals and customary closing conditions, and Renesas expects to record a non-recurring gain of approximately $1.5bn (234bn yen) at closing. Renesas has also signed an MOU to explore a partnership with SiTime, combining Renesas’ embedded compute leadership with SiTime’s MEMS timing innovation.

On Wolfspeed, Renesas states that on January 30, 2026, following CFIUS approval, it acquired Wolfspeed’s convertible notes and common stock, that one director has been appointed, and that it is isolating the equity-method impact from Wolfspeed via partial restriction of shareholder rights. Separately, Renesas 365 Powered by Altium — described as a first-of-its-kind industry solution designed to streamline electronics system development from silicon selection to system lifecycle management — is scheduled to be released at embedded world in March 2026. Group annual recurring revenue for Altium grew 14% year on year as of 4Q25.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.