Note: This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results for the 9 Months Ended December 31, 2023

(Based on Japanese GAAP)
January 30, 2024
Socionext Inc.
Stock exchange listing: Tokyo
6526
URL: https://www.socionext.com/en/
Masahiro Koezuka, Representative Director, Chairman, President and CEO
Hiromasa Nakajima, General Manager, Public Relations & Investor
Contact person:
Tel: +81-45-568-1000
Relations Office
Scheduled filing date of statutory quarterly financial report:
February 14, 2024
Scheduled dividend payment date:
Supplementary material:
Yes
Quarterly financial results presentation:
Yes (for institutional investors and analysts)
Company name:
Code number:
Representative:(Monetary amounts are rounded to the nearest millions of yen)
1. Consolidated financial results for the 9 months ended December 31, 2023 (From April 1, 2023 to December 31, 2023)(1) Consolidated financial results(Percentage represents change from the same period of the previous fiscal year)
Net sales
9 months ended

Operating income

Profit attributable to owners ofparentOrdinary income

millions of yen%

millions of yen%

millions of yen%

millions of yen%

December 31, 2023

169,638

22.2

27,94466.8

29,302

60.4

20,30033.1

December 31, 2022

138,841-

16,748-18,266-

15,246-

Note:
Comprehensive income:9 months ended December 31, 2023:
9 months ended December 31, 2022:

Basic earnings per share
9 months ended

20,935 million yen (34.2%)
15,604 million yen (-%)

Diluted earnings per share

yen

yen

December 31, 2023

115.76112.57

December 31, 2022

90.57

86.49

Notes:
1. The Company did not prepare consolidated financial statements for the 9 months ended December 31, 2021, as a result, thechange of the 9 months ended December 31, 2022 from the same period of the previous fiscal year is not presented.
2. The Company implemented a stock split on January 1, 2024 at a ratio of 1 common stock to 5 shares. Basic earnings per shareand diluted earnings per share are computed base on the assumption that the stock split was implemented at the beginning of theyear ended March 31, 2023.
(2) Consolidated financial position
Total assets
As of

Net assets

Shareholders’ equity ratio

millions of yen

millions of yen%

177,658

124,32970.0

109,864

56.6

December 31, 2023
March 31, 2023

193,945

Reference: Shareholder’s equity: As of December 31, 2023:

124,329 million yen

As of March 31, 2023: 109,852 million yen

2. Dividends per share
Annual dividends
1st quarter-end

2nd quarter-end

3rd quarter-end

Year-end

Total

Year ended/ending

yen

yen

yen

yen

yen

March 31, 2023

-

0.00

-

210.00210.00March 31, 2024-

115.0023.00-

March 31, 2024(Forecast)

Note: Revision of the latest dividends forecast: No
The Company implemented a stock split on January 1, 2024 at a ratio of 1 common stock to 5 shares. Dividends for fiscal year
ended March 31, 2023 and fiscal year ending March 31, 2024 are presented in actual value terms on a pre-split basis. The yearend dividend per share forecast is presented considering the effect of the stock split, meanwhile annual dividend per share
forecast is presented as “-”. The year-end dividend per share forecast for the fiscal year ending March 31, 2024 will be 115 yen
assuming the stock split was not implemented.
3. Consolidated earnings forecast for the fiscal year ending March 31, 2024 (From April 1, 2023 to March 31, 2024)(Percentage represents change from the same period of the previous fiscal year)
Net sales
millions of yen

Year ending March 31, 2024

217,000

Operating income% millions of yen
12.6

31,500

Profit attributable toowners of parent

Ordinary income% millions of yen

45.1

31,500% millions of yen
34.4

22,500

Basic earnings per share

%

yen

13.8

127.79Notes: Revision of the latest consolidated earnings forecast: Yes
For further details, please refer to “Notice Regarding the Revision of Financial Forecasts” announced today (January 30, 2024).
Besides, the Company implemented a stock split on January 1, 2024 at a ratio of 1 common stock to 5 shares. Basic earnings
per share for the fiscal year ending March 31, 2024 (forecast) is presented considering the stock split. The amount of basic
earnings per share for the fiscal year ending March 31, 2024 (forecast) is 638.93 yen assuming the stock split was not
implemented.
※ Notes(1) Changes in significant subsidiaries during the current reporting period(Changes in specified subsidiaries resulting from changes in the scope of consolidation):No(2) Application of special accounting methods for quarterly consolidated financial statements:

No(3) Changes in accounting policies, accounting estimates and retrospective restatements for consolidated financial statements
No① Changes in accounting policies due to revisions of the accounting standards and other regulations:No② Changes arising from factors other than ①:No③ Changes in accounting estimates:
No④ Retrospective restatements:(4) Number of issued shares (Common stock)① Number of shares issued at the end of theperiod (including treasury stock)

3rd quarter ended② Number of treasury stock held at the endof the period

3rd quarter ended③ Average number of shares during the period

9 months ended

December 31, 2023

December 31, 2023

December 31, 2023

178,238,280

615

175,360,445

Year ended March
31, 2023

168,333,330

Year ended March-

31, 2023
9 months ended
December 31, 2022

168,333,330

Note: The Company implemented a stock split on January 1, 2024 at a ratio of 1 common stock to 5 shares. “Number of shares issued
at the end of the period”, “Number of treasury stock held at the end of the period”, and “Average number of shares during theperiod” are computed based on the assumption that the stock split was implemented at the beginning of the year ended March 31,
2023.
※ These quarterly consolidated financial results are not subject to the review procedure of external auditors’ quarterly review.
※ Explanation of the proper use of earnings forecast and other special notes
These materials may contain forward-looking statements that are based on management’s current information, actual results may
differ materially from these forward-looking statements for various reasons. For information regarding the assumptions used toprepare the forecast and cautionary note of the forecast, please refer to “1. Qualitative information regarding the quarterly
consolidated financial results (3) Consolidated earnings forecast and other forward-looking information” on page 4 for more details.

Attachment contents
1. Qualitative information regarding the quarterly consolidated financial results ………………………………………………

2(1) Description of operating results …………………………………………………………………………………………

2(2) Description of financial position………………………………………………………………………………………….

3(3) Consolidated earnings forecast and other forward-looking information………………………………………………….

4

2. Quarterly consolidated financial statements and principal notes...……………………………………………………………

5(1) Quarterly consolidated balance sheets ……………………………………………………………………………………

5(2) Quarterly consolidated statements of income and comprehensive income ………………………………………………

7

Quarterly consolidated statements of income…………………………………………………………………………

7

Quarterly consolidated statements of comprehensive income ………………………………………………………

8(3) Quarterly consolidated statements of cash flows …………………………………………………………………………

9(4) Notes to consolidated financial statements…………………………………………………………………………….….

10

Assumptions of a going concern…………………………………………………………………………………………

10

Significant changes in shareholders’ equity ………………………………………………………….…………………

10

Segment information………………………………………………….………………………….………………………

10

Subsequent Events………………………………………………….………………………….………………………...

10

- 1 -

1. Qualitative information regarding the quarterly consolidated financial results(1) Description of operating results
The global economy has continued to slow down during the 9 months ended December 31, 2023, due to increased global instability,
exacerbated by factors such as the prolonged Russian invasion of Ukraine and escalation in Middle East tensions. Except for China,
strong inflationary pressures stemming from supply and demand imbalances, and persistently high interest rates primarily in Europe
and the U.S., have resulted in a drag on economic activity. Therefore, the global economic environment remains high uncertain, andgrowth rates have remained low compared to the past. Furthermore, differences in monetary policies among countries and regions
resulted in depreciation of the Japanese yen.
The semiconductor market showed signs of gradual recovery in the second half of 2023, driven by a significant increase in demand forlogic ICs bolstered by widespread adoption of generative AI, and a rebound in demand for memory chips and microprocessors.
Geographically, the demand mainly in the U.S. and China, started to improve from the second half of 2023, indicating a gradual shift
away from the negative growth that persisted for nearly a year since the latter half of 2022. While inventory adjustments have been
continuing due to lingering weak demand for products such as smartphones, PCs, and consumer electronics, overall demand for end
products has been improving, although it is still weak for office automation (OA) equipment and other products. Furthermore, there
has been a resilient growth in demand for semiconductors using cutting-edge technologies, particularly in Advanced Driver Assistance
Systems (ADAS)/ Autonomous Driving (AD) and data centers.
Under such circumstances, the Group (“the Group”, “the Company”, “we” and “our” refer to Socionext Inc., and its consolidated
subsidiaries, or Socionext Inc. on a non-consolidated basis, as the context may require) has acquired design wins of custom SoC
projects since 2019 in its focus areas including automotive, data center & networking which use advanced process technologies suchas 7nm and 5nm. Some of those design win projects have entered the mass production stage and contributed to increased net sales
especially from advanced technology products.
In October 2023, the Company issued press releases, “Socionext Announces Collaboration with Arm and TSMC on 2nm Multi-Core
Leading CPU Chiplet Development” and “Socionext Begins Development of SoCs for Advanced ADAS and AD Using 3nm
Automotive Process”. The Company has been engaged in advanced technologies including 2nm or finer process nodes and chiplets(Die-to-Die interconnects and 2.5D/3D packaging) as well as in the adoption of AI for design and development process.
As a result, the consolidated net sales for the 9 months ended December 31, 2023 were 169,638 million yen, an increase of 22.2%
from the 9 months ended December 31, 2022. Product revenue was 141,954 million yen, increased by 28.8% compared to the 9months ended December 31, 2022. The increase was due mainly to an increase in net sales from leading-edge technology projects
which have entered mass production stage, in application markets such as automotive, data center & networking, and smart devices, aswell as the depreciation of the Japanese yen, despite the special demand of 5G base stations from a Chinese customer concluded in thefirst half of 2023 and weak product revenue in the consumer market in China. NRE revenue was 27,110 million yen (a decrease of
1.8% from the 9 months ended December 31, 2022) and remained at the same level as the same period of the previous year, due toongoing development projects of products using advanced process technologies.
[Net sales](millions of yen)
9 months
ended December 31, 2022

9 months
ended December 31, 2023

Semiconductor products (product revenue)

110,240

141,954

Non-recurring engineering (NRE revenue)

27,617

27,110

Others

984

574

Total

138,841

169,638

Cost of sales was 87,360 million yen, an increase of 18.5% from the 9 months ended December 31, 2022 due to increased productrevenue and the depreciation of the Japanese yen. Selling, general and administrative expenses were 54,334 million yen, an increase of
12.4% from the 9 months ended December 31, 2022. Research and development costs of 38,255 million yen (an increase of 7.7%
compared to the 9 months ended December 31, 2022) are included. The increase in selling, general and administrative expenses wasdue to increasing development projects of products using advanced process technologies and the depreciation of the Japanese yen.
Operating income in the 9 months ended December 31, 2023 increased by 66.8% from the 9 months ended December 31, 2022 to
27,944 million yen. Ordinary income was 29,302 million yen, an increase of 60.4% from the 9 months ended December 31, 2022, due
mainly to foreign exchange gain. Profit attributable to owners of parent increased by 33.1% from the 9 months ended December 31,- 2 -2022, to 20,300 million yen.
The Japanese yen/U.S. dollar average exchange rate for the 9 months ended December 31, 2023 was ¥143.3=U.S. $1, a depreciation of¥6.8 compared to the 9 months ended December 31, 2022.
The Group has a single segment primarily of SoC developed with the solution SoC business model.
(2) Description of financial position①Assets, liabilities and net assets(Assets)
Current assets as of December 31, 2023 decreased by 24,357 million yen from the end of the previous fiscal year to 131,710 million
yen. This is mainly due to the decrease in inventories and accounts receivables-other in accordance with increased product revenue
and decreased customer-requested upfront procurement. Cash on hand and in banks increased due to the proceeds from the exercise ofstock options and the accounts receivable collection despite the payment of income taxes and dividends. Non-current assets as ofDecember 31, 2023 increased by 8,070 million yen from the end of the previous fiscal year to 45,948 million yen. The main capital
expenditures in the period include the acquisition of reticles, IP, etc. in connection with product development of acquired design wins,
and the expansion of data centers in accordance with increasing development scale.
As a result, total assets as of December 31, 2023 decreased by 16,287 million yen from the end of the previous fiscal year to 177,658
million yen.
(Liabilities)
Current liabilities as of December 31, 2023 decreased by 30,683 million yen from the end of the previous fiscal year to 51,655 million
yen. This is due mainly to the decrease in accounts payables-trade and accounts payable-other related to customer-requested upfront
procurement.
As a result, total liabilities as of December 31, 2023 decreased by 30,752 million yen from the end of the previous fiscal year to53,329 million yen.
(Net assets)
Net assets as of December 31, 2023 increased by 14,465 million yen from the end of the previous fiscal year to 124,329 million yen.
This is due mainly to 20,300 million yen in profit attributable to owners of parent for 9 months ended December 31, 2023 and theproceeds from the exercise of stock options, which offset the impact of distribution of surplus.
As a result, the shareholders’ equity ratio has been 70.0%, increased by 13.4 percent points from the end of the previous fiscal year.
② Cash flows
Cash and cash equivalents as of December 31, 2023 increased by 10,792 million yen from the end of the previous fiscal year to 55,928
million yen.
Net cash provided by operating activities was 35,510 million yen for the 9 months ended December 31, 2023. This is due mainly to
profit before income taxes of 29,302 million yen, depreciation and amortization of 9,532 million yen, a decrease in accounts
receivable of 8,249 million yen in accordance with accounts receivable collection despite the payment of income taxes of 10,036
million yen.
Net cash used in investing activities was 18,634 million yen for the 9 months ended December 31, 2023. This is due mainly to thepurchases of 8,975 million yen of property, plant and equipment including reticles and test boards for product development for theacquired design wins, and those for improving the environment of design and development, and the purchases of 9,664 million yen of
intangible assets including IP.
Net cash used in financing activities was 6,749 million yen and this is due to payment of the dividends of 11,160 million yen despite
the proceeds from exercise of stock options of 4,558 million yen.
The Company entered into an additional half-year commitment line agreement of 10 billion yen as of July 31, 2023, effective from thesame date, in response to sales volatility risk related with global economic slowdown and geopolitical risks. In additional to theexisting commitment line agreement of 20 billion yen, the maximum amount of borrowing capacity under our commitment lines totals
30 billion yen. As of December 31, there was no outstanding balance under our commitment lines. We will not renew the additional
half-year commitment line agreement upon its expiration, as we have determined that our liquidity needs can be adequately met within- 3 -the existing commitment line agreement of 20 billion yen, based on the latest cash flow forecast.
(3) Consolidated earnings forecast and other forward-looking information
Despite the recent weakness in the Chinese and consumer markets, the Company has revised its net sales, operating income, andordinary income upward from the previous forecast due to steady progress in the development and mass production of new products
and the yen's depreciation (147.9 yen in Q3) against the expected exchange rate of 125 yen per U.S. dollar. As to profit attributable toowners of parent, the Company has revised the estimated amount of corporation tax by taking into consideration the possibility thatthe amount of tax credit will decrease, given that during the course of the tax audit the Company received guidance with respect to thecalculation method for the amount of the special credit for corporation tax relating to general experiment and research expenses underthe Act on Special Measures Concerning Taxation. The exchange rate for Q4 is assumed to be 125 yen to the U.S. dollar.
For further details, please refer to “Notice Regarding the Revision of Financial Forecasts” announced today (January 30, 2024).
Revision of consolidated financial forecasts for the fiscal year ending March 31, 2024 (From April 1, 2023 to March 31, 2024)

Full YearNet sales

Operating income

Ordinary income

Profit attributable toowners of parent

Dividends per
share
yen

millions of yen

millions of yen

millions of yen

millions of yen

Previous forecast (A)214,000

29,00029,00022,50046.00

Revised forecast (B)217,000

31,50031,50022,50046.00

Difference (B-A)+3,000+2,500+2,500±0

0.00

The Company implemented a stock split on January 1, 2024 at a ratio of 1 common stock to 5 shares. The amount of dividends per
share above is presented considering the effect of the stock split.

- 4 -2. Quarterly consolidated financial statements and principal notes(1) Quarterly consolidated balance sheets(Millions of yen)
As of March 31, 2023
AssetsCurrent assets
Cash on hand and in banks
Accounts receivable-trade, net
Finished goods
Work in process
Accounts receivable-other
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery and equipment, net
Tools, furniture and fixtures, net
LandConstruction in progress
Total property, plant and equipment, net
Intangible assets
Technology assets
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other assets
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable-trade
Accounts payable-otherAccrued expenses
Income taxes payable
Liabilities related to chargeable subcontracting
Other current liabilities
Total current liabilities
Long-term liabilities
Asset retirement obligations
Other long-term liabilities
Total long-term liabilities
Total liabilities- 5 -As of December 31, 2023

45,13640,8098,187
39,528
16,2096,198
156,067

55,92834,243
7,338
24,196
2,054
7,951
131,7102,583
813,438800
351
17,1802,456
616,915800
380
20,557

11,494
1,468
12,962

16,381
1,995
18,376

0
6,897
839
7,736
37,878
193,945

0
6,106
909
7,015
45,948
177,658

23,421
24,551
5,755
6,942
18,8692,800
82,33816,550
8,323
7,123
4,565
11,926
3,168
51,655

343
1,400
1,743
84,081

348
1,326
1,674
53,329(Millions of yen)
As of March 31, 2023
Net assets
Shareholders' equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive income
Foreign currency translation adjustments
Total accumulated other comprehensive income
Share subscription rights
Total net assets
Total liabilities and net assets- 6 -As of December 31, 2023

30,20030,20048,630109,030

32,55232,552
57,770(2)
122,872822
822
12
109,864
193,945

1,457
1,457
124,329
177,658

(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statements of income(For 9 months)(Millions of yen)
9 months ended
December 31, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Foreign exchange gain
Other income
Total non-operating income
Non-operating expenses
Other expenses
Total non-operating expenses
Ordinary income
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to owners of parent- 7 -9 months ended
December 31, 2023

138,841
73,75265,08948,341
16,748

169,638
87,36082,27854,33427,944

76
1,448
17
1,541

247
1,101
58
1,406

23
23
18,266
18,266
5,445(2,425)
3,020
15,246
15,24648
48
29,302
29,302
8,115
887
9,002
20,30020,300Quarterly consolidated statements of comprehensive income(For 9 months)(Millions of yen)
9 months ended
December 31, 2022
ProfitOther comprehensive income
Foreign currency translation adjustments
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent- 8 -9 months ended
December 31, 2023

15,246

20,300358
358
15,604635
635
20,935

15,60420,935

(3) Quarterly consolidated statements of cash flows(Millions of yen)
9 months ended
December 31, 2022
Operating activities
Profit before income taxes
Depreciation and amortization
Interest and dividend income
Loss on retirement of non-current assets
Loss (gain) on sale of non-current assets
Decrease (increase) in accounts receivable
Decrease (increase) in inventories
Increase (decrease) in accounts payable
Decrease (increase) in other assets
Increase (decrease) in other liabilities
Other
SubtotalInterest and dividends received
Income taxes paid
Net cash provided by (used in) operating activities
Investing activities
Purchases of property, plant and equipment
Purchases of intangible assets
Proceeds from sales of non-current assets
Other
Net cash used in investing activities
Financing activities
Repayments of lease obligations
Proceeds from exercise of stock options
Proceeds from exercise of share award rights
Purchase of treasury stock
Dividends paid
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the fiscal
year
Cash and cash equivalents at the end of the period- 9 -9 months ended
December 31, 2023

18,266
8,745
(76)
1,076
(15)
(14,712)(29,324)
12,925(27,476)
41,227(204)
10,43276(3,211)
7,297

29,302
9,532
(247)
696
8,249
16,182(8,460)12,346(21,787)(514)
45,299247(10,036)
35,510(10,604)(5,414)15
16(15,987)(8,975)(9,664)
5(18,634)

(239)
(239)

(291)
4,558
146
(2)
(11,160)(6,749)802665(8,127)

10,792

46,27145,13638,14455,928

(4) Notes to consolidated financial statements
Assumptions of a going concern
None.
Significant changes in shareholders’ equity
None.
Segment information
1. 9 months ended December 31, 2022
(From April 1, 2022 to December 31, 2022)
The Group has a single segment primarily of SoC developed with the solution SoC business model.
2. 9 months ended December 31, 2023
(From April 1, 2023 to December 31, 2023)
The Group has a single segment primarily of SoC developed with the solution SoC business model.
Subsequent Events(Stock Split and Partial Amendment of Articles of Incorporation)
The Company resolved to implement the stock split and partially amend the Articles of Incorporation at the Board of Directors’
meeting held on October 31, 2023, with an effective date of January 1,2024.
1.

Purpose of stock split

The stock split was undertaken with the aim of expanding the investor base and increasing the liquidity of the Company’s stockbase through a reduction in the price of share-trading units.
2.

Outline of stock split(1) Method of stock split
The record date of the stock split was Sunday, December 31, 2023 and it consisted of a split at the ratio of 5 for 1 of all commonshares held by shareholders whose names appear or are recorded in the Registry of Shareholders as of the end of the record date.
Since this day falls on a non-business day of the shareholder registry administrator, the substantial record date was Friday,
December 29, 2023.
(2) Increase in the number of shares resulting from stock split
Total issued shares before the stock split

35,647,656 shares

Increase in issued shares resulting from the stock split

142,590,624 shares

Total issued shares after the stock split

178,238,280 shares

Total authorized shares after the stock split

673,000,000 shares(3) Schedule
Public notice date of the record date

Friday, December 15, 2023

Record date

Sunday, December 31, 2023

Effective date

Monday, January 1, 2024

3. Effect on per share information
The effect of the stock split is reflected in per share information of consolidated financial results summary.

- 10 -

4. Partial Amendment to the Articles of Incorporation(1) Reason for amendment
In conjunction with the stock split described above, the Company amended the total number of shares authorized to be issued
described in Article 6 of its Articles of Incorporation in accordance with the split ratio with an effective date of January 1, 2024,
pursuant to the provisions of Article 184, Paragraph 2 of the Companies Act of Japan.
(2) Details of amendment
The details of the amendment are as follows.
(Amended portions are underlined.)
Current Articles of Incorporation

Articles of Incorporation After Amendment

Article 6. (Total Number of Shares Authorized to Be Issued)

Article 6. (Total Number of Shares Authorized to Be Issued)

The total number of shares authorized to be issued by
the Company shall be 134,600,000.

The total number of shares authorized to be issued by theCompany shall be 673,000,000.

(3) Schedule
Date of Board of Directors’ resolution

Tuesday, October 31, 2023

Effective date

Monday, January 1, 2024

5.

OthersChange in the amount of common stock: No change.

- 11 -