Nomura Holdings, Inc. (NYSE:NMR) Q2 2025 Financial Results

Nomura Holdings, Inc. reported strong performance for the second quarter of the fiscal year ending March 2025. CFO Takumi Kitamura highlighted significant gains in net revenue and net income.

Key Financial Highlights

• Net Revenue: Increased 6% quarter-on-quarter to JPY 483.3 billion.
• Net Income: Surged 43% to JPY 98.4 billion, the highest since June 2020.
• Effective Tax Rate: Reduced to 27%.
• Annualized Return on Equity (ROE): Achieved 11.6%, exceeding the 2030 target range of 8%-10%.

Key Takeaways

• Wealth and investment management sectors reported increases in net revenue.
• Wholesale segment net revenue rose by 8%; income before taxes jumped by 114%.
• Declared dividend of JPY 23 per share, representing a 40.6% payout ratio.
• Despite market volatility, Nomura expects sustained strong performance in wealth management and wholesale operations.

Company Outlook

• Ongoing revenue diversification and cost control expected.
• Focus on capital policy with plans to set a CET1 ratio ceiling by next fiscal year.

Bearish Insights

• Total sales decreased by JPY 900 billion to JPY 5.9 trillion due to a prior quarter's tender offer.
• October performance showed a slowdown attributed to market volatility.
• Concerns about sustainability of 11.6% ROE levels.

Bullish Insights

• Investment management's net revenue rose by 18% driven by strong inflows.
• Executed significant transactions including green bonds.
• Nearly 80% growth in recurring revenue from wealth management since Q4 2020.

Misses

• Concerns about maintaining high ROE levels despite strong Q2 results.
• Decreased number of customers served by each partner, leading to longer engagement times.

Q&A Highlights

• CFO Kitamura emphasized focusing on quality over quantity in customer acquisition.
• Cautious approach towards M&A in asset management, prioritizing valuations.
• Recognition of workplace segment as a significant market opportunity.

Nomura Holdings demonstrated resilience and strong performance, with optimism for future growth. Their focus on diversification, cost management, and customer satisfaction contributed to robust results despite market challenges.

InvestingPro Insights

• Low P/E ratio suggests possible stock undervaluation.
• 20.62% revenue growth over the last year with a 30.25% quarterly growth as of Q1 2025.
• Healthy gross profit margin at 77.83% and operating income margin at 19.82%.
• Committed to shareholder returns with a 3.06% dividend yield over the last year.

Summary

Strong Q2 2025 results for Nomura Holdings reflect continued growth and operational resilience. The company's strategic focus foreshadows optimism amid market challenges.