Webull beats Q3 expectations as revenue jumps 55% on strong trading
Sysmex Corporation (TYO:6869) reported its second-quarter earnings for 2025, revealing a miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of 23.2, falling short of the anticipated 24.06, and reported revenue of 126.8 billion, below the forecasted 132.89 billion. In response, Sysmex’s stock dropped 5.65% in after-hours trading, settling at 1610, and continued to decline, reaching 1502 in recent trading sessions.
Key Takeaways
- Sysmex missed both EPS and revenue forecasts for Q2 2025.
- The stock fell 5.65% in after-hours trading post-earnings.
- Full-year sales forecast was revised downward to 510 billion.
- Challenges include yen depreciation and Chinese market conditions.
- Emerging markets like India and Brazil show promising growth.
Company Performance
Sysmex Corporation’s performance in the first half of the fiscal year showed a decline in both top and bottom lines. Despite these challenges, the company improved its Q2 operating income ratio to 17.6%. Sysmex is actively expanding its presence in emerging markets and enhancing its operational efficiencies.
Financial Highlights
- Revenue: 126.8 billion (below the forecast of 132.89 billion)
- Earnings per share: 23.2 (below the forecast of 24.06)
- Operating income ratio for Q2: 17.6%
Earnings vs. Forecast
Sysmex’s actual EPS of 23.2 was below the forecast of 24.06, resulting in a negative surprise of -3.57%. Revenue also fell short at 126.8 billion, compared to the expected 132.89 billion, marking a revenue surprise of -4.58%.
Market Reaction
Following the earnings release, Sysmex’s stock dropped 5.65% in after-hours trading. The stock is currently trading at 1502, close to its 52-week low, reflecting negative investor sentiment due to the earnings miss and downward revision of the full-year sales forecast.
Outlook & Guidance
Sysmex revised its full-year sales forecast to 510 billion and operating income to 76 billion. The company anticipates recovery in the Japanese and Chinese markets next year and expects growth in the hemostasis business in Europe and the US. Sysmex is also preparing for the European market entry of its medical robot, Hinotori.
Executive Commentary
Executive Asano highlighted, "Excluding China, the overseas region performed well on a local constant currency basis." He also emphasized Sysmex’s commitment to providing comprehensive laboratory solutions and preparing for the market entry of Hinotori by establishing a training center.
Risks and Challenges
- Yen depreciation impacting financial performance.
- Ongoing challenges in the Chinese market.
- Potential geopolitical concerns affecting the META region.
- Supply chain issues and tariff impacts in the US.
- Market saturation in certain regions.
Sysmex’s earnings call highlighted both the challenges and opportunities the company faces as it navigates a complex global market environment.
Full transcript - Sysmex Cor (6869) Q2 2026:
Asano, Executive/Presenter, Sysmex Corporation: Good morning, ladies and gentlemen. I am Asano. Now, I’d like to start the briefing on our financial results for the first six months of the fiscal year ending March 2026. I’d like to extend my warm appreciation to those joining us in person and online. Slide 3, please. These are the topics I will cover today. Slide 5, please. I will start with the executive summary. The result for the first half of the year. We have the extraordinary factors like the transition of the ecosystem in Japan, and also the devaluation of the inventory, and also the worsening market situation in China. We recorded the decline in the top line and the bottom line. The shortfall against our revised first half of the forecast was mainly due to the worsening condition of the Chinese market.
Excluding China, the overseas region performed well on a local constant currency basis, and the O.I. improved in Q2 compared to Q1, suffering the extraordinary factors. The profitability increased, improved to 17.6%. The full-year performance forecast: we have revised the sales forecast to JPY 510 billion, and the O.I. is JPY 76 billion, down from the original forecast by JPY 15.5 billion. In addition to the extraordinary factors in Q1, the worsening of the market conditions in China, and the delay of the clinical chemistry business, which was grounded to be the driver of the new growth. The overseas region, excluding China, is steadily continuing with the business, and the full-year forecast reflects the risks associated with China’s market. Slide 8.
The sales were affected by the yen depreciation and the impact of the ecosystem switch in Japan, and also the change in the Chinese market condition. Operating income was affected by the devaluation of inventory and increase of SGA, as well as the decrease of the gross profit due to the sales decline. This is the quarterly appeal. On the Q2 single basis, except for China overseas region, recorded steady progress, and the OI ratio improved by 17.6%. Slide 10. This is the sales factor by business and field. The hematology. In Japan, had a steady growth of instruments in Japan, and this year we are suffering the backlash, and also the Chinese distributors adjusting the inventory, so the sales was down. The urinalysis had good business progress in Americas, India, and Asia-Pacific.
The medical robot business is affected by the Japanese hospitals, which are suffering financial difficulties. The new installation degree was down from the plan, but the consumables and the service revenue increased due to the increase of the number of procedures. Slide 11. The sales by region and by item. Except for China, the overseas region grew on a local currency basis, and in particular, Asia-Pacific grew with reagent, and the double-digit growth was achieved in the single Q2 period in India, and the region-specific presentation follows. Slide 12. Americas. North America had a steady demand, and Latin America also grew significantly.
In the three-month period for the second quarter, on the local currency basis, the growth of sales was 8.8% on a year-on-year basis, and instrument in hematology, urinalysis, and hemostasis all made a steady growth. We will launch a new product in Q3 onward, and further revenue increase is expected. The reagent sales was also steady, and hematology and urinalysis did well, together with the reagent for the Alzheimer’s disease testing reagent. Slide 13, the EMEA. EMEA suffered partly due to geopolitical factors and in some Middle East countries, but the major countries in Europe did well. In France and North Europe, XR series made a steady growth, and urinalysis grew in Italy and Spain, and in Germany.
In the hemostasis area, we acquired a large-sized deal with the CN series, and the installation is scheduled in the second half of the year, and the reagent sales will grow. In major countries in Europe, both instrument reagents grew significantly. In total, the EMEA did well. Slide 14, China. The government is reading the policy to control the medical expenditures. They introduced a policy named the Minimum Necessary Principle, and under this principle, they are controlling the number of set testing, and the CRP and hemostasis testing numbers have decreased. The distributors are suffering financial strain, and they are working on the inventory adjustment. The sales were down in China for the first half of this fiscal year. Regarding the business environment in China, in addition to the information gathered locally, I myself, together with Mr. Matsui and Mr.
Iizuka, who are with us today, visited personally the multiple hospitals and customers and spoke directly from them. Slide 15, please.
Yeah, let me explain the situation in China. This is a situation of a hematology testing business. In this market share in 2024, it was 37.5%. Despite the intensifying competition in recent years, we’ve been able to maintain our share. Also, the graph in the middle shows the trend in the number of testing performed per analyzer. As you can see, the number of testing has only slightly decreased, observing no major changes. For the impact of data sharing among facilities, there is a possibility for us, but it appears that such data sharing mainly occurs for testing conducted within three days, which is relatively uncommon in hematology, so expecting the impact is quite limited on hematology.
This year, the number of new installations from distributed to hospitals, which is shown at the very bottom, the high-end market remained roughly on par with the previous year, while in the mid-range segment, the X and L models produced in China have shown strong performance so far this year. Overall, while competition continues to intensify, the hematology testing business itself has not been significantly affected. On the right-hand side, on the other hand, for bundled testing. A series of reviews has been underway for some time. In late April, the government issued a notice under the principle of minimum necessity. This policy has affected our result, particularly in CRP and hemostasis testing, especially D-dimer consumables. The impact first appeared in CRP testing from the first quarter, and from the second quarter, the restriction on bundled hemostasis testing also started to take effect.
Going down to the right bottom of the slide, due to a series of medical cost control measures, many medical institutions have fallen into the red, forcing distributors to reduce prices or extend collection periods, which worsened their financial conditions. As a result, inventory adjustments on the distributor side have progressed, leading to a negative impact on our sales. Next slide, please. This chart illustrates the situation of what I just explained. On the left, at the beginning of the year, and those in the green, the increased patient numbers, also the benefits of local instrument production and increasing adopted tested items. We expected the growth, and those are shown in green. We also expected the impact of VBP, the volume-based procurement, and DRG schemes, which are shown on the right-hand side bars.
We expected a certain impact, but it will not be a major impact. That is what we had expected at the beginning. However, now that we are in this new year, there has been intensified competition and unification of testing services and decline in testing prices, and that is shown on the right-hand side as a result. At the end of Q1, according to this Minimum Necessary Principle, we saw the drop in CRP and inventory control among hematology distributors, and this is what we expected for the first half. In reality, this is in the black bars, a little darker red boxes with the D-dimer testing. D-dimer decreased. In addition, we saw inventory adjustment by distributors. Due to the financial difficulties of distributors, adjustment accelerated. On a local currency basis, sales declined to 80% of the previous year.
This minimum necessity policy is expected to continue. The inventory adjustment at the distributor is expected to bottom out in the third and fourth quarters. I think basically the impact will run its course by the end during this year. On the right-hand side, with the dotted line are the actions taken right now. We are listing up a number of counteractions. This is actually helping to minimize, we are hoping to minimize the decline in performance with these measures. Please go to slide 17. Next, let me talk about Asia-Pacific region. By India, the hematology business achieved strong growth and increased sales for the first half and double-digit growth in the second quarter. In India, production at our new local factory is progressing smoothly, and shipments of reagents have also begun.
In the Southeast Asian countries, such as in the Philippines and Malaysia, both hematology and urinalysis businesses have performed well. On the other hand, in Indonesia, sales declined slightly due to budget strains on the medical equipment, but overall, the region achieved sales growth. Medical robot business, one unit was newly installed, and the number of surgeries continues to increase. Please go to slide 18. In Japan, the sales basically for the first half declined temporarily due to the rebound from strong equipment sales in the last year and impact of core system transition. Reagent sales, which were effective in Q1 by the system transition, have already returned back to normal levels, and we’re seeing steady progress in customers switching from other competitor players, particularly in the hematology and hemostasis fields, expecting further expansion going forward.
In the medical robot business, the number of installations in the first half was six units because of deterioration in financial condition of hospitals, but other companies are experiencing similar conditions. Based on the estimate, our market share remains around 20%. The number of surgeries continues to increase steadily, contributing to the growth in the sales of consumables and service revenue. Please turn to slide 19. Operating profit changes. Operating profit declined due to several factors, including one-time effect in the first quarter, deterioration of market conditions in China, and an increase in SGA expenses associated with the expansion of direct sales regions, higher expense and depreciation costs following the launch of the new core system and effects impacts. The impact of U.S. tariff, it was limited to approximately JPY 400 million for the first half thanks to our measures. Please turn to slide 20.
The balance sheet and cash flow. The trade receivables decreased, inventory levels increased. The liabilities, current liability declined mainly due to a decrease in corporate tax payments. Please go to slide 21. Operating cash flow decreased in line with the sales decline, and cash and cash equivalents also fell slightly year-on-year. Please turn to slide 22. Now, let me talk about the progress on growth strategies. Our growth strategy is driven by three key pillars: strengthening our existing businesses, expanding emerging markets, and developing new businesses. As part of our emerging market strategy, we recently signed an agreement with JEOL Limited to acquire its clinical chemistry business. I would like to also explain the strategic rationale and initiatives behind this transaction. Please go to slide 23. Let me talk about clinical chemistry market.
Clinical chemistry testing, along with blood and urine testing, is one of the fundamental categories and an essential component for building a complete laboratory system. Clinical chemistry may appear to be a mature market, but as shown here, it continues to grow steadily and sustainably, with particularly high growth rates in emerging markets. By adding clinical chemistry testing to our product lineup, we’ll be able to offer comprehensive laboratory solutions using systemic products across all testing categories, and we are receiving such requests from customers in emerging markets. Please go to slide 24. Given such background, now the clinical chemistry business is transferred from JEOL to our company. There are two strategic significances. One is to integrate the JEOL instrument strengths with our strengths and offer a new solution to customers, especially in emerging countries.
The second significance is that we will be able to offer a new solution utilizing the data after covering almost all the major testing fields. Let me share with you some unique characteristics of JEOL. They have a unique sample dilution technique so that testing with the minimum sample volume is possible, and their processing speed is very fast. They have the highest share in the Japanese market, but they are yet to expand globally, and Sysmex can offer our global network to expand JEOL business globally. The first major markets are Japan, emerging countries, and China. JEOL already has the partnership with the local player, WEGO Medical, and we will carry on JEOL’s collaborative partnership with WEGO. The closing is scheduled on April 1 next year.
We are aiming to conclude the deal within this fiscal year, but because of some timeline of the regulatory approval, the closing will be next April. The steady progress is being made towards the closure. This is the clinical chemistry business image. We will not merely sell the clinical chemistry instrument. We will add Sysmex strengths so that we can offer the unique strengths of the product, and the instrument will enjoy the higher production volume benefit. Sysmex production function and the supply chain will be utilized to achieve the significant cost reduction. Utilizing our product design capability and mass production technology, we will work on offering the compact-sized instrument for emerging countries and the connection with the transport system. The reagent for clinical chemistry, we will collaborate with the domestic reagent manufacturers under the Sysmex brand.
We will utilize the technology with the small sample. We will offer a unique business model and unique parameters. Slide 26. The emerging countries’ status. India and Brazil are expected to grow by more than 20% this year. Depending on the timing of the tender, there are some ups and downs among the quarter, but the annual plan will be achieved for the emerging countries. The META region has had steady progress, and there are some temporary geopolitical concerns, but we are expecting the steady growth of META. In Egypt and Turkey, the streamlining of the laboratory operation demand is increasing. We are introducing the blood science concept in combining hematology and hemostasis. As a, let me share in a strategic initiative in India.
In April this year, our new manufacturing plant for instruments and reagents began operations, and the product shipments have been proceeding smoothly. The key feature of this facility is it enables local instrument production in line with the Making India initiatives, and we plan to increase the local procurement ratio to over 50% by the end of March 2026. This will further strengthen our competitive advantage in government procurement tenders. That can build our competitive advantage, and no other competitors are able to do so yet. In addition, we are planning to introduce strategic products tailored for the Indian market on the right-hand side. These will be new service solutions that utilize Sysmex’s unique diagnostic data to help address public health issues and healthcare challenges specific to the region.
We are currently working on this initiative through public-private collaboration with the launch targeted for next year. Please go to slide 28. Next, let me talk about the medical robotic business, Hinotori. Cumulative number of installations is now approaching 100 units, and the number of surgeries has increased to 1.5 times year-on-year, exceeding a total of 13,000 procedures or surgeries. As the number of surgeries continues to grow, the proportion of high-margin consumables and service revenue has also increased. In Europe, where we have submitted a regulatory application, we are expecting approval within this fiscal year. Furthermore, on the right-hand side, we are preparing for market entry by establishing a Hinotori training center at Ircad in France, which is the largest surgical training center in Europe. The other day for the remote surgery, connecting Japan and Ircad was implemented and the testing was conducted.
The Hinotori is installed at this location. We have been taking actions to prepare for the launch starting next year. Please turn to slide 29. Here is the earnings forecast for fiscal year ending March 31, 2026. Please turn to page 31. This is our four-year earnings forecast. We revised downwards both net sales and operating profit, with net sales projected at JPY 150 billion, a decrease of JPY 25 billion from the initial plan, and operating profit projected at JPY 76 billion, down JPY 15.5 billion from the initial plan. The main factors behind this revision include a one-time effect that occurred in the first quarter, changes in market condition in China, and delay in launch of clinical chemistry business. It is expected to serve as a new growth driver.
Excluding China, all overseas regions have performed well, and we expect year-on-year sales growth in those regions. For operating profit, we anticipate that the second half will reach a level comparable to last year. Please go to slide 32. This is showing the net sales by business segment and by region. Sorry, that was page 31. Next, page 32. Next is dividend forecast. Including commemorative dividend to mark the 30th anniversary of our listing, we plan to increase annual dividend by JPY 6 compared to the previous year. Please go to slide 33. This is the last line. Looking ahead to the next year, this year we faced several headwinds, including the impact of core system transition in Q1 and policy-related effects in China. This resulted in lower sales both in China and Japan.
Next year, the impact of system transition in Japan will be fully resolved. In China, we believe a series of negative effects will have bottomed out this year, leading to a recovery in the following year. There are many growth drivers on the horizon. Overseas business continues to perform well. We expect hemostatic business to expand in Europe and the U.S. next year. We also anticipate continued growth in emerging markets, particularly India. Furthermore, market introduction of Hinotori in Europe will begin. Newly acquired clinical chemistry business will contribute to non-linear growth. Starting next year, we are also launching a new mid-term management plan. We are in the process of discussing the details of the new plan. The main focus areas are enhancing profitability and providing Sysmex unique solutions through the use of data. Those will be the two major focus points.
The latter is exemplified by the strategic product for India I mentioned earlier. Also, the AI system introduced at our recent technical briefing is under advanced development, and we plan to launch it within this year. We will provide further details at a later date when a formal opportunity is arranged for the mid-term plan. This concludes my presentation. Thank you very much for your kind attention.
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