Kokusai Electric (6525) Q4 2026 earnings summary

Executive summary

• Fiscal year ended March 2026 saw revenue and profits decrease year-on-year, but both exceeded revised forecasts due to stronger service revenue and improved gross margin, with normalization in China DRAM equipment sales impacting results.

• The semiconductor device market experienced strong investment in high-performance Logic and DRAM for generative AI, with moderate recovery in consumer and industrial demand.

• FY March 2027 is expected to see revenue and profit growth driven by aggressive capital investment by device manufacturers and technological superiority in advanced equipment.

Financial highlights

• FY2026 revenue was ¥235.1 billion, down 1.6% year-on-year; adjusted operating profit was ¥47.6 billion, down 17.6% year-on-year; net income attributable to owners of the parent was ¥30.1 billion, down 16.4%.

• Gross profit margin declined to 41.2% (down 1.4pts YoY); adjusted operating profit margin at 20.2%.

• Service revenue rose 27% year-on-year, accounting for 40% of total sales.

• Equipment sales for NAND increased 90%, DRAM decreased 44%, and logic foundry decreased 11% year-on-year.

• Revenue from China fell to 39% of total; Non-China revenue increased in Q4.

Outlook and guidance

• FY March 2027 revenue forecast is ¥280 billion, up 19.1% year-on-year; adjusted operating profit forecast is ¥60.5 billion, up 27.1%; net income forecast is ¥38.8 billion, up 28.9%.

• Gross profit margin expected at 42%, up 0.8 points year-on-year.

• Dividend forecast at ¥47 per share, payout ratio 25.6%.

• Revenue growth expected in all major applications: NAND up 7%, DRAM up 36%, Logic/Foundry up 38%.

• Revenue from Non-China expected to rise 30% year-on-year; China revenue to decline 2%.