Hitachi (6501) Q1 2027 earnings summary

Executive summary

• Q1 FY2026 revenue rose 20% year-on-year to ¥2,709.6 billion, reaching record highs, driven by business expansion, favorable foreign exchange effects, and strong performance across all four sectors, especially Energy.

• Net income attributable to shareholders was ¥203.1 billion, up 1% year-over-year, and core free cash flow reached ¥365.0 billion, both increasing year-over-year.

• All major business segments achieved double-digit revenue growth, with notable strength in Energy and Mobility, and Lumada business accounted for 43% of consolidated revenue.

• The impact of the Middle East situation was less than anticipated, with a negative effect of ¥16.0 billion on revenue and ¥7.0 billion on adjusted EBITA, but remains a risk factor.

• The acquisition of Clever Devices was completed in July 2026, expanding the Mobility segment's digital capabilities.

Financial highlights

• Adjusted EBITA margin improved by up to 140 basis points year-on-year to 11.9%, with adjusted EBITA at ¥323.5 billion (+¥86.0 billion YoY).

• Gross profit increased 22% year-over-year to ¥809.7 billion, and adjusted operating income rose 39% to ¥294.3 billion.

• Core free cash flow increased by over ¥200 billion year-on-year, reaching ¥365.0 billion.

• Total assets at end of Q1 FY2026 were about ¥15 trillion, nearly unchanged from FY2025.

• Basic earnings per share grew 1% to ¥42.24.

Outlook and guidance

• FY2026 revenue forecast raised to ¥11,700.0 billion (+11% YoY), with adjusted EBITA margin expected to reach 13%.

• Net income, core free cash flow, and ROIC forecasts also increased, reflecting strong Q1 and revised FX assumptions.

• CapEx for FY2026 is expected to reach ¥670.0 billion, mainly in the Energy sector, with ongoing investments in production capacity and AI adoption.

• Shareholder returns for FY2026 include a planned ¥550.0 billion share buyback and ¥250.0 billion in dividends.

• Management highlights ongoing risks from global economic conditions, exchange rates, and raw material prices.