1. Q2 Performance: Light and Shadow

i-SENS’s Q2 2025 results present both positive and negative aspects. Revenue reached ₩76.8 billion, exceeding expectations. However, operating profit and net income fell significantly compared to the previous quarter, recording ₩1.7 billion and ₩0.2 billion, respectively. The sharp decline in net income is a particular concern for investors.

2. Analyzing the Drivers of Performance

2.1 Concerns over Slowing Revenue Growth
While revenue remained similar to the previous quarter, the possibility of slowing growth requires continued monitoring.

2.2 Reasons for Decline in Operating Profit
The decline is likely attributed to a combination of factors, including rising raw material prices, foreign exchange fluctuations, and increased selling, general, and administrative expenses. Although the preliminary operating margin exceeded expectations, it remains unclear whether the downward trend will reverse.

2.3 Factors Contributing to the Sharp Decline in Net Income
In addition to the decrease in operating profit, inventory valuation losses due to high inventory levels, increased interest expenses, and foreign exchange losses due to currency fluctuations are identified as key factors.

3. Key Risk Factors

High inventory levels and foreign exchange risks could increase short-term stock price volatility. Improvements in inventory management strategies and strengthening foreign exchange risk management are crucial.

4. Action Plan for Investors

Investors should be cautious of short-term stock price fluctuations. For a long-term perspective, it is essential to monitor factors such as the success of CGMS market entry, improvements in inventory management, foreign exchange risk management, and financial stability when making investment decisions. Pay close attention to the Q3 earnings announcement and management’s presentation on inventory reduction strategies.