Tokyo Electron (8035) Q3 2026 earnings summary

Executive summary

• Third quarter net sales were JPY 552.0 billion, down 12.4% quarter-over-quarter and 15.7% sequentially, with a rebound expected in the fourth quarter.

• Operating income fell 26.7% quarter-over-quarter to JPY 116.1 billion, with operating margin at 21.0%.

• Net income attributable to owners was JPY 118.5 billion, a 4.3% decline quarter-over-quarter and 24.6% year-over-year.

• Extraordinary income of JPY 37.2 billion was recorded from the sale of strategic shares.

• The company operates in a single segment: semiconductor production equipment.

Financial highlights

• Gross profit margin declined to 42.7%, mainly from product mix changes and increased fixed costs.

• Operating margin decreased to 21.0% from 30.5% in Q3 FY2025.

• Free cash flow was positive at JPY 84.3 billion for the quarter.

• Equity ratio improved to 75.3% as of December 31, 2025.

• Cash and cash equivalents at period end were JPY 417,205 million.

Outlook and guidance

• FY2026 full-year net sales forecast revised upward to JPY 2,410 billion, with gross profit margin at 45.3% and operating margin at 24.6%.

• Net income for FY2026 is projected at JPY 550 billion.

• Fourth quarter SPE new equipment sales expected to grow over 30% from the third quarter, mainly driven by logic and foundry customers.

• Full-year dividend per share forecast raised to JPY 601, an all-time high, with a payout ratio of around 50%.

• Share repurchase of up to JPY 150 billion announced, targeting ROE above 30%.