MegaChips (6875): FY2025 Results Summary — Net Profit Up 72.8% on SiTime Share Sales Despite Operating Loss

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

MegaChips Corporation (TSE Prime: 6875), a fabless system LSI company, announced its results for FY2025 (the fiscal year ended March 2026) in its briefing material dated May 2026. Consolidated sales were ¥36,169 million, down 14.5% year on year, and the company posted an operating loss of ¥174 million. Ordinary income was ¥1 million (down 99.9%), while net profit belonging to shareholders of the parent company rose 72.8% to ¥9,284 million, supported by a gain of 15,100 million JPY from the partial sale of shares in SiTime Corporation recorded as an extraordinary profit. For FY2026 (ending March 2027), the company forecasts sales of ¥42,000 million and a return to an operating income of ¥2,500 million.

Consolidated Results (Full-Year Actual)

Sales declined ¥6,150 million year on year. According to the company, demand in the Amusement business was strong in the first half of the year but declined in the second half, and sales in the ASIC business decreased due to a sluggish recovery in demand from customers in key business segments. Operating income fell ¥2,360 million into a loss, reflecting a decline in gross profit from the sales decrease in the Amusement and ASIC businesses and increased development costs in the ASIC business. Ordinary income declined ¥2,600 million, with an increase in non-operating expenses such as investment partnership management fees. Net profit increased ¥3,910 million: a gain of 15,100 million JPY from the sale of investment securities (partial sale of SiTime Corporation shares) was posted in FY2025, versus 7,700 million JPY in the previous fiscal year. Operating income after adjustment, which excludes taxes and public dues associated with external standard taxation of gain and loss on sale of investment securities, was ¥16 million (FY2024: ¥2,289 million). The average US$ exchange rate was 159.88 JPY (FY2024: 149.52 JPY).

Item (¥ million)	FY2024 (ended Mar 2025)	FY2025 (ended Mar 2026)	YoY (%)
Sales	42,326	36,169	-14.5
Cost of sales	34,500	30,656	-11.1
SG&A expenses	5,636	5,687	+0.9
Operating income	2,190	-174	－
Ordinary income	2,608	1	-99.9
Net profit belonging to shareholders of parent company	5,371	9,284	+72.8
Earnings Per Share (¥)	306.27	578.31	+88.8

The full-year forecast published on Feb 6, 2026 had projected sales of ¥38,000 million, operating income of ¥1,000 million, ordinary income of ¥500 million, net profit of ¥10,500 million, and EPS of ¥677.68, on an assumed US$ exchange rate of 130.00 JPY.

Financial Position and Cash Flows

Total assets at FY2025 year-end were ¥2,551 (¥100M), up from ¥1,499 (¥100M) a year earlier, driven mainly by investment and other assets, which increased by ¥1,121.9 (¥100M) (+108%). Cash and cash equivalents decreased by ¥55.3 (¥100M) (-27%) and notes/accounts receivables by ¥43.3 (¥100M) (-28%). On the liabilities side, net assets increased by ¥674.2 (¥100M) (+57%) to ¥1,856 (¥100M), and interest-bearing debt remained at zero. Cash flows from operating activities were ¥52 (¥100M) (FY2024: ▲37), cash flows from investment activities were ¥100 (¥100M) (FY2024: 35), and free cash flow was ¥153 (¥100M) (FY2024: ▲1).

Item (¥100M)	FY2024 year-end (ended Mar 2025)	FY2025 year-end (ended Mar 2026)
Cash flows from operating activities	▲37	52
Cash flows from investment activities	35	100
Free cash flow	▲1	153

FY2026 Forecast

For FY2026 (ending March 2027), MegaChips states it will “shift to a sustainable growth phase” and, through rigorous cost management and concentrated investment in high-value-added services, steadily achieve profitability. Sales are forecast at ¥42,000 million, up ¥5,800 million (+16.1%) year on year, on expected higher customer demand in the Amusement business and, in the ASIC business, a recovery in product sales due to the bottoming out of customer demand and growth in contract development (NRE sales) both in Japan and overseas. Operating income is forecast at ¥2,500 million (+¥2,600 million YoY), targeting a V-shaped profit recovery. Net profit is forecast at ¥27,000 million (+¥17,700 million, +190.8%), as a gain of 37,000 million JPY from the sale of investment securities (partial sale of SiTime shares) is expected to be recorded as an extraordinary profit.

Item (¥ million)	FY2025 Full-year results (ended Mar 2026)	FY2026 Full-year forecast (ending Mar 2027)
Sales	36,169	42,000
Operating income	-174	2,500
Ordinary income	1	2,000
Net profit belonging to shareholders of parent company	9,284	27,000
Earnings Per Share (JPY)	578.31	1,804.70
Exchange rate: US$	159.88 JPY	140.00 JPY

Mid- to Long-Term Management Policy (Targets for FY2030)

MegaChips presented a mid- to long-term management policy promoting both business and financial strategies to strengthen earnings power, optimize capital structure, and enhance corporate value. For FY2030, the company targets sales of 80B JPY, operating income of 10B JPY, and an operating margin of 10% or more, aiming to establish four core profitable businesses (Amusement, ASIC, ASSP, and new businesses in the software and solution sectors) through strategic alliances, investments, and M&A. On the financial side, the company plans to reduce its shareholding ratio in SiTime to approximately 5% by FY2030 through planned sales of SiTime shares, using the proceeds for growth investments and shareholder returns while controlling shareholders’ equity at an appropriate level, and aims to achieve an ROE of 8% or higher by FY2030, exceeding the assumed cost of capital (ROE was 5.1% in FY2023, 4.9% in FY2024, and 6.1% in FY2025).

Under the capital allocation plan for FY2026–FY2030, cash-in consists of the creation of operating cash flow and proceeds from the sale of SiTime shares of approximately ¥100B. Cash-out comprises strategic growth investment of ¥30B–¥50B, strengthening of the business foundation of ¥10B–¥20B, and shareholder returns of approximately ¥40B.

Capital allocation (FY2026–FY2030)	Amount
Cash-in: operating cash flow + proceeds from sale of SiTime shares	Approx. ¥100B
(1) Strategic growth investment	¥30B–¥50B
(2) Strengthening of the business foundation	¥10B–¥20B
(3) Shareholder returns	Approx. ¥40B

Shareholder Returns

During the mid- to long-term period through FY2030, MegaChips plans to proactively enhance shareholder returns utilizing proceeds from the sale of SiTime shares. For dividends, the company aims to maintain a steady upward trend and stable dividend payments, allocating approximately ¥20B to stable and continuous dividends. For share repurchases, it plans flexible buybacks of approximately ¥20B, taking into account capital efficiency and market conditions. Per-share dividend amounts cannot be confirmed from the materials.

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.