Advantest (6857) investor relations material

Executive summary

• Strong earnings and record-high Q1 revenue and profit were driven by robust demand in the SoC tester market, especially for GPU, custom ASIC, CPU, and AI inference applications, with favorable currency exchange rates contributing.

• Upward revision of SoC tester market outlook and full-year FY26 forecast, with the midpoint projection increased from JPY 9.1 billion to JPY 11 billion, and sales forecast raised to JPY 1,714.0 billion.

• Company maintains a dominant market position across CPU, custom ASIC, and networking segments, benefiting from increased chip volumes and test content.

• Accelerated capacity expansion, increased R&D investments, and new partnerships to support growth.

• Net income surged 93.8% year-over-year to JPY 174.8 billion, with record quarterly highs across key metrics.

Financial highlights

• Q1 FY26 sales reached JPY 367.5 billion, up 12.0% sequentially and 39.3% year-over-year, with gross margin at 69.5% and operating income at JPY 190.0 billion.

• Net income rose to JPY 174.8 billion, up 93.8% year-over-year, with a net margin of 47.6%.

• Margin benefited from a reversal of inventory obsolescence, a non-recurring item.

• Dividend per share increased to JPY 30.

• Memory pricing remains a headwind, impacting margin outlook for the remainder of the year.

Outlook and guidance

• FY26 sales forecast raised to JPY 1,714.0 billion, operating income to JPY 846.0 billion, and net income to JPY 660.0 billion.

• Demand for SoC testers and AI inference semiconductors expected to remain strong and sustainable into next year.

• Company is accelerating capacity expansion, aiming to surpass 5,000 units soon and pulling forward the 10,000 unit target previously set for 2028/2029.

• Visibility into customer demand has extended from six months historically to about 18 months, aiding capacity planning.

• R&D expenses and capital expenditures both set to increase significantly.