TOKYO KEIKI (7721) Q3 2026 earnings summary

Executive summary

• Net sales for Q3 FY2025 rose 16.1% year-over-year to ¥39,748mn, driven by strong Defense & Communications and Marine Systems segments.

• Operating profit nearly doubled, up 93.4% year-over-year to ¥2,038mn, with all profit line items showing significant increases.

• Growth was supported by increased Japanese defense budgets and robust demand across all business segments.

• The order backlog reached a record high of ¥64,043mn, reflecting robust demand and strong sales momentum.

• Full-year forecasts for FY2025 were revised upward, with net sales expected at ¥60,400mn and operating profit at ¥4,500mn.

Financial highlights

• Ordinary profit increased 77.8% year-over-year to ¥2,184mn, and profit attributable to owners of parent rose 86.5% to ¥1,739mn.

• Basic EPS increased to ¥105.82 from ¥56.75 year-over-year.

• Comprehensive income rose to ¥1,976mn from ¥683mn year-over-year.

• Operating profit margin for the full year is forecast at 7.5%, down 1.0pt from the previous year.

• The impact of headquarters relocation costs reduced operating profit by ¥400mn.

Outlook and guidance

• Full-year net sales forecast revised up to ¥60,400mn (+4.8% YoY); operating profit forecast at ¥4,500mn (-7.3% YoY); profit attributable to owners forecast at ¥3,210mn (-15.5% YoY).

• Upward revision from previous forecast due to strong Defense & Communications sales and improved cost of sales ratio.

• Exchange rate for Q4 set at ¥150/USD, with sensitivity of ¥1 depreciation impacting operating profit by ¥4mn.

• Continued investment in R&D and human resources for future growth.

• Dividend forecast raised to ¥40 per share for the year ending March 31, 2026.