Tokyo Electron (8035) Q2 2027 earnings summary

Executive summary

• Q2 net sales reached a record JPY 935.0B, up 27.7% QoQ; operating income rose 39.7% to JPY 295.3B.

• H1 FY2027 net sales were JPY 1,667,455m and operating income was JPY 506,776m, both record highs; results exceeded interim forecasts.

• FY2027 guidance calls for net sales of JPY 3,700.0B, operating income of JPY 1,169.0B and net income of JPY 865.0B, supported by strong AI-related demand.

Financial highlights

• Q2 gross profit was JPY 447.3B, up 30.5% QoQ; income before tax rose 35.6% to JPY 292.2B and net income attributable to owners increased 29.4% to JPY 212.5B.

• H1 net income attributable to owners was JPY 376,929m, up 56.0% YoY; ordinary income reached JPY 514,401m, up 67.6%.

• H1 results exceeded interim forecasts by JPY 47,455m in sales and JPY 27,929m in net income attributable to owners.

• Q2 R&D expense was JPY 85.2B; capital expenditures were JPY 32.3B and depreciation and amortization was JPY 24.3B.

• H1 comprehensive income increased to JPY 433,085m from JPY 291,648m YoY.

Outlook and guidance

• FY2027 net sales forecast is JPY 3,700.0B, up 51.4% YoY; gross profit is JPY 1,772.0B and gross margin 47.9%.

• FY2027 operating income is forecast at JPY 1,169.0B, up 87.1% YoY; net income attributable to owners is estimated at JPY 865.0B, up 50.6%.

• FY2027 EPS estimate is JPY 381.69 on a 5-for-1 split-adjusted basis; H2 SPE new equipment sales are forecast at JPY 1,560.0B, with full-year sales growth of 59% to JPY 2,415.3B.

• H2 gross margin is expected to rise 1 percentage point vs. H1, with gains split between higher production and ongoing price optimization; Q4 margin could reach 50% if customer facilities are ready for earlier equipment startups.

• FY2027 R&D expense is budgeted at JPY 335.0B, capex at JPY 216.0B and depreciation at JPY 100.0B.