Kokusai Electric (6525) Q4 2026 earnings summary

Executive summary

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

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

• Bookings for the year reached JPY 264 billion, surpassing assumptions by JPY 30 billion, with a year-end backlog of JPY 165 billion.

• Dividend per share increased to JPY 37, with a payout ratio of 25.3%.

• FY27/3 is expected to see revenue and profit growth driven by aggressive capital investment by device manufacturers and technological superiority in advanced equipment.

Financial highlights

• FY26/3 revenue was JPY 235.1 billion, down 1.6% year-on-year; adjusted operating profit was JPY 47.6 billion, down 17.6% year-on-year.

• Full-year revenue exceeded forecast by JPY 5.1 billion; adjusted operating income by JPY 3.2 billion; adjusted net income by JPY 2.3 billion.

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

• Free cash flow for March 2026 was JPY 31.8 billion; net cash position of JPY 6.6 billion achieved a year ahead of plan.

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

Outlook and guidance

• FY March 2027 revenue forecast at JPY 280 billion, up 19.1% year-on-year; adjusted operating profit up 27%, adjusted net income up 26%.

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

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

• Equipment sales to non-China expected to rise 39%, service sales up 6%, equipment sales to China down 3%.

• DRAM and logic foundry sales forecasted to increase 36% and 38% respectively; NAND sales up 7%.