Kioxia (285A) Q1 2027 earnings summary

Executive summary

• Achieved record high revenue and profit in Q1 FY2026, driven by strong AI-related NAND demand, especially from data centers and enterprise applications, with higher selling prices across all segments.

• All application segments, particularly SSD & Storage for data center and enterprise, saw significant sales growth, with 8th generation BiCS FLASH™ production exceeding 50%.

• Financial position strengthened with a net cash position and equity ratio surpassing 50%.

• Strategic focus on long-term customer agreements (LTA) and ongoing investments in next-generation technologies, manufacturing capacity, and R&D to support AI-driven growth.

• Operating profit reached 1,270.0 billion yen, a dramatic increase from 44.9 billion yen a year earlier, despite provisions for litigation losses and higher stock-based remuneration costs.

Financial highlights

• Q1 FY2026 revenue: JPY 1,767.1 billion, up 76.2% quarter-on-quarter and 415.5% year-over-year.

• Non-GAAP operating profit: JPY 1,326.2 billion (75% margin), up 121.4% quarter-on-quarter and 2,833.2% year-over-year.

• Non-GAAP net income: JPY 887 billion (50.2% margin), up 116.4% quarter-on-quarter and 4,692.5% year-over-year.

• Non-GAAP EBITDA: JPY 1,402.1 billion, margin 79.3%.

• Core free cash flow: JPY 827.2 billion, a record high; net cash position of JPY 186.7 billion.

Outlook and guidance

• Q2 FY2026 revenue guidance: JPY 2,390.0 billion, up 35% quarter-on-quarter.

• Q2 non-GAAP operating profit guidance: JPY 1,900 billion, margin 79.9%, up 43.3% quarter-on-quarter.

• Q2 non-GAAP net income guidance: JPY 1,280 billion, margin 53.6%.

• Continued strong demand expected from data center and enterprise segments; ASP growth and bit growth in the low single digits quarter-on-quarter remain key drivers.

• R&D investment for FY2026 expected to be JPY 200 billion, focusing on BiCS11 and AI inference SSDs.