Tokyo Electron (8035) investor relations material

Executive summary

• Net sales for Q1 FY2027 reached ¥732.3 billion, up 33.3% year-over-year and 2.9% quarter-over-quarter, with both net sales and gross profit hitting record highs.

• Operating income rose 46.1% year-over-year and 2.8% sequentially to ¥211.4 billion, with operating margin steady at 28.9%.

• Net income attributable to owners was ¥164.3 billion, up 39.5% year-over-year but down 23.3% sequentially due to the absence of prior quarter's extraordinary income.

• Growth was driven by robust demand in AI servers, advanced logic, and memory, especially in advanced packaging and etch segments.

• The company operates a single segment: semiconductor production equipment.

Financial highlights

• Gross profit margin held at 46.8%, with gross profit at ¥342.7 billion, up 0.6pts year-over-year and 2.9% quarter-over-quarter.

• Free cash flow for Q1 FY2027 was ¥80.5 billion; cash and equivalents at quarter-end were ¥409.6 billion.

• Total assets increased to ¥2,955.4 billion as of June 30, 2026; equity ratio improved to 71.7%.

• R&D expenses for Q1 FY2027 were ¥72.0 billion, up 15.9% year-over-year.

• Capital expenditures for Q1 FY2027 were ¥39.9 billion, down 24.4% year-over-year.

Outlook and guidance

• H1 FY2027 net sales forecast revised upward to ¥1.62 trillion (+37.3% YoY), with operating income at ¥458 billion (+51.1% YoY), net income at ¥349 billion (+44.4% YoY), and EPS at ¥767.51—all record highs.

• Interim dividend forecast raised to ¥384 per share, a record high; year-end dividend forecast undecided.

• Second half expected to see further acceleration, especially in memory and advanced logic, with close monitoring of geopolitical and supply chain risks.

• WFE market projected at $150B+ in 2026 and $190B+ in 2027, with 20%+ YoY growth, driven by AI data center demand.

• Full-year forecasts to be disclosed with Q2 results.