Tokyo Electron (8035) Q2 2026 earnings summary

Executive summary

• Q2 FY2026 net sales reached JPY 630.0 billion, up 14.6% quarter over quarter and year-over-year, in line with guidance.

• Operating income for Q2 FY2026 was JPY 158.4 billion, up 9.5% quarter over quarter and year-over-year.

• Net income attributable to owners for Q2 FY2026 was JPY 123.8 billion, up 5.1% quarter over quarter and year-over-year.

• Most first-half results exceeded guidance, driven by strong field solution sales and robust demand from Korea, China, and the AI server market.

• H1 FY2026 net sales totaled JPY 1,179.6 billion, up 5.2% year-over-year.

Financial highlights

• Gross profit margin in Q2 FY2026 was 45.2%, down 1.0 percentage point year-over-year and quarter over quarter.

• Operating profit margin in Q2 FY2026 was 25.1%, down 1.2 percentage points year-over-year and quarter over quarter.

• Free cash flow for Q2 FY2026 was JPY 89.1 billion, with cash and cash equivalents at JPY 455.2 billion.

• R&D expenses in Q2 FY2026 rose 17.0% year-over-year to JPY 72.6 billion.

• Capital expenditures in Q2 FY2026 surged 72.7% year-over-year to JPY 91.2 billion.

Outlook and guidance

• FY2026 net sales forecast revised to JPY 2,380 billion, with gross profit margin at 45.3% and operating profit margin at 24.6%.

• Net income guidance raised to JPY 488 billion, reflecting extraordinary income from share sales.

• Full-year dividend per share projected at JPY 533, maintaining a 50% payout ratio.

• Net income per share forecast at JPY 1,064.77.

• Flexible share repurchase under consideration as part of shareholder return policy.