Kokusai Electric (6525) Q1 2027 earnings summary

Executive summary

• Achieved record quarterly revenue of JPY 75.4 billion in Q1 FY27/3, up 45.6% year-over-year, driven by strong equipment and service sales, especially for DRAM and Logic, and robust demand outside China.

• Adjusted operating income rose 59.3% year-over-year to JPY 17.4 billion, with profit margins improving sequentially and year-over-year.

• Net income attributable to owners of the parent grew 70.6% year-over-year to JPY 11.6 billion, with comprehensive income reaching JPY 12.0 billion, up 56.4%.

• Orders received in Q1 totaled approximately JPY 140 billion, significantly exceeding forecasts, with robust demand for DRAM and NAND equipment.

• Both revenue and profit exceeded previous forecasts, prompting an upward revision of full-year guidance and dividend forecasts.

Financial highlights

• Gross profit for Q1 was JPY 30.7 billion, with a gross margin of 40.7%, down 2.2 points year-over-year but up 1.3 points sequentially.

• Adjusted net income for Q1 was JPY 12.5 billion (+65.1% YoY); basic earnings per share increased to JPY 49.47 from JPY 29.08.

• Net cash position maintained at JPY 6.6 billion; free cash flow for Q1 was JPY 6.6 billion.

• R&D expenses for Q1 were JPY 4.5 billion (5.9% of revenue); capital expenditures were JPY 4.8 billion; depreciation was JPY 3.9 billion.

• Cash and cash equivalents at quarter-end were JPY 56.97 billion; net cash provided by operating activities was JPY 12.13 billion.

Outlook and guidance

• Full-year revenue forecast revised up 21% to JPY 340 billion, a 45% year-over-year increase.

• Adjusted operating income forecast raised 42% to JPY 86 billion, up 81% year-over-year; full-year operating profit forecast is JPY 79.4 billion, up 89.8%.

• Adjusted net income forecast increased 40% to JPY 60 billion, up 76% year-over-year; net income attributable to owners projected at JPY 55.5 billion, up 84.4%.

• Annual dividend forecast raised to JPY 65 per share, with a payout ratio of 25.2%.

• Equipment sales and service revenue expected to significantly exceed previous forecasts due to rapid capital investment by device manufacturers.