Kokusai Electric (6525) Q2 2027 earnings summary

Executive summary

• Q2 revenue set a quarterly record at ¥88.6bn, up 35.5% YoY; adjusted operating profit rose 55.6% to ¥22.5bn.

• Q2 order intake was ~¥167bn, more than ¥20bn above forecast; record-level orders are expected to continue in H2 and beyond.

• H1 revenue rose 40.0% to ¥164.0bn and operating profit reached ¥36.8bn; FY27 guidance remained unchanged.

• The ¥330bn medium-term revenue target is now expected in FY27, two years ahead of schedule.

Financial highlights

• Q2 revenue was ¥88.6bn, up 35.5% YoY and 17.5% QoQ; operating profit was ¥20.9bn and net income ¥14.3bn.

• Q2 adjusted operating profit was ¥22.5bn, up 55.6% YoY; adjusted net income rose 57.6% to ¥15.4bn.

• H1 revenue was ¥164.0bn, up 40.0%; operating profit was ¥36.8bn and net income ¥25.9bn, up 62.1% and 66.5%, respectively.

• H1 adjusted operating profit rose 57.2% to ¥39.8bn; adjusted net income rose 60.9% to ¥28.0bn.

• H1 gross margin was 41.8%, down 0.4 percentage points YoY on product mix; adjusted operating margin rose 2.7 points to 24.3%.

Outlook and guidance

• FY27 guidance remained unchanged: revenue ¥340.0bn (+44.6%), operating profit ¥79.4bn, net income ¥55.5bn, adjusted operating profit ¥86.0bn (+80.7%) and adjusted net income ¥60.0bn (+76.0%).

• FY27 gross margin is forecast at 43.0%, adjusted operating margin at 25.3%, and annual dividend at ¥65 per share.

• FY27 application growth forecast: NAND +49%, DRAM +61%, Logic / Foundry +65%, and services +22%; services are forecast at 17% of revenue.

• FY28 direction targets revenue growth above WFE market growth and adjusted operating margin above 30%; FY28 revenue growth is expected at ~40%.