Nomura Earnings Call: Profit Growth Amid Challenges

Nomura Holdings Inc Adr ((NMR)) has held its Q3 earnings call. Read on for the main highlights of the call.

Nomura Holdings Earnings Call Highlights Profitable Growth Amid Segment Challenges

The recent earnings call of Nomura Holdings Inc Adr revealed an optimistic sentiment overall, underscoring significant profit growth driven by robust international operations and record-breaking achievements in investment and asset management. Despite these successes, the company faces challenges, such as declines in certain segments and rising costs.

Record Profit Growth

Nomura Holdings reported a 3% increase in net income, reaching JPY101.4 billion. This marks the seventh consecutive quarter of profit growth, showcasing the company’s ability to maintain its upward trajectory in net income amidst varying market conditions.

International Operations Success

The earnings call emphasized the success of Nomura’s international operations, which reported a 30% increase in income before income taxes to JPY51.8 billion. This segment now contributes nearly 40% to the group’s total income before income taxes, highlighting its growing significance to the company’s overall performance.

Investment Management Achievements

Assets under management hit a record high of JPY93.5 trillion, with business revenue achieving its highest level since the division was established. This underscores Nomura’s strength and strategic positioning in investment management.

Strong Wholesale Performance

Nomura’s wholesale segment saw a 10% increase in net revenue, reaching JPY290.5 billion. Global markets revenues have been on an upward trend for seven consecutive quarters, indicating sustained growth and robust performance in this division.

Asset Management Milestones

The asset management division experienced a net inflow of JPY260 billion, with alternative assets under management surpassing JPY2.5 trillion, a JPY400 billion increase in just three months. These milestones reflect the division’s dynamic growth and adaptability.

Commemorative Dividend Announcement

In celebration of its 100th anniversary, Nomura announced a commemorative dividend of JPY10 per share to be paid to shareholders as of March 31, 2025, marking this milestone with a shareholder reward.

Investment Management Revenue Decline

Despite overall success, the investment management segment experienced an 18% decline in net revenue, with income before income taxes dropping 41% to JPY18.9 billion, attributed to lower valuation gains from American Century Investments.

Cost Increases

Group-wide expenses rose by 4% to JPY363.7 billion, driven in part by a 3% increase in compensation and benefits due to elevated stock-based compensation, presenting a challenge in managing operational costs.

Wealth Management Product Sales Decline

The wealth management segment saw an 11% decline in total product sales quarter-on-quarter, totaling JPY5.2 trillion, with stock sales decreasing by 12%. This indicates a need for strategic adjustments to bolster sales in this area.

Forward-Looking Guidance

Nomura Holdings provided forward-looking guidance with a 4% quarter-on-quarter increase in group-wide net revenue to JPY502 billion. The company continues to enjoy profit growth for the seventh straight quarter, with international business contributing significantly. Nomura plans to enhance profitability in its international operations and diversify revenue streams, with notable input from its digital assets subsidiary, Laser Digital.

Overall, Nomura Holdings’ earnings call reflected a positive sentiment with a focus on sustaining profit growth and expanding international operations. Despite challenges in specific segments and rising costs, the company remains committed to strategic initiatives aimed at improving profitability and diversifying its revenue base.