Samsung earnings beat expectations

[WORLD] Samsung Electronics has reported a robust surge in first-quarter profits, propelled by unprecedented demand for its flagship Galaxy S25 smartphones. The South Korean tech giant’s performance not only exceeded analyst forecasts but also set new records for revenue and net profit, underscoring the company’s resilience amid global economic uncertainties and persistent challenges in its semiconductor division.

Strong Lead: Galaxy S25 Drives Record-Breaking Quarter

Samsung Electronics posted a net profit of 8.22 trillion won ($5.75 billion) for the January-March 2025 period, marking a 21.7% increase from the previous year. Revenue soared to an all-time quarterly high of 79.14 trillion won ($55.34 billion), up 10% year-on-year, while operating profit climbed 1.2% to 6.7 trillion won. These results surpassed market expectations, with analysts having predicted a net profit of 5.17 trillion won.

The company attributed its stellar performance to robust sales of the Galaxy S25 series, which debuted in January and quickly set new sales records both domestically and globally.

Smartphone Sales Outpace Expectations

The Galaxy S25 series-comprising the S25, S25 Plus, and S25 Ultra-has proven to be Samsung’s most successful smartphone launch to date. In South Korea, the series sold one million units in just 21 days, breaking the previous record held by the Galaxy Note 10. Globally, first-month sales reached approximately 4.56 million units, three times higher than the Galaxy S24 series during the same period last year. The Ultra model emerged as the most popular variant, accounting for over half of domestic sales.

Analysts credit the S25’s success to several key factors:

Early integration of advanced AI features, building on the momentum from the Galaxy S24.

Enhanced performance and design, appealing to both loyal Samsung users and new customers.

The introduction of the Galaxy AI Subscription Club, making upgrades more accessible and attractive.

Business Division Performance: Mobile Shines, Chips Lag

Samsung’s Device eXperience (DX) division, which includes mobile, TV, and home appliances, reported a 28% year-on-year sales increase to 51.7 trillion won, with 4.7 trillion won in operating profit. The mobile business alone contributed 37 trillion won in sales and 4.3 trillion won in operating profit, underscoring the impact of the Galaxy S25 launch.

Conversely, the semiconductor (Device Solutions, DS) division continued to face headwinds. Sales fell 17% to 25.1 trillion won, with operating profit dropping to 1.1 trillion won, reflecting ongoing challenges in the high-bandwidth memory (HBM) sector and global trade uncertainties.

Market Context: Smartphone Recovery Amid Global Uncertainty

The global smartphone market grew 3% year-on-year in the first quarter of 2025, buoyed by major launches like the Galaxy S25 and Apple’s iPhone 16e. While Samsung’s sales surged after the S25 launch, Apple retained the top spot globally with an 18% market share for Samsung. The “Ultra” model in the S25 series saw a notable increase in share, highlighting consumer preference for premium devices.

Despite the positive momentum, Samsung and the broader industry continue to face macroeconomic headwinds, including trade tensions and slowing economic growth in mature markets. The company remains cautious but optimistic, expecting performance to improve in the second half of the year if global uncertainties subside.

Investment in Innovation and AI

Samsung has responded to market challenges by ramping up research and development (R&D) spending. The company’s R&D expenditure for the first quarter increased by 16% year-on-year, reaching 9 trillion won. This investment is aimed at maintaining competitiveness in AI-driven products and preparing for future growth in both smartphones and semiconductors.

Industry Outlook

Samsung’s first-quarter results highlight the company’s ability to adapt and thrive in a rapidly evolving market. While challenges remain-particularly in the semiconductor sector and amid global economic volatility-the success of the Galaxy S25 series and continued investment in innovation signal a positive trajectory for the world’s largest memory chipmaker and smartphone manufacturer.

As competition intensifies and consumer preferences shift toward high-value, AI-powered devices, Samsung’s strategic focus on flagship innovation and R&D may prove decisive in sustaining its market leadership in the months ahead.