Kokusai Electric (6525) Q4 2025 earnings summary

Executive summary

• Revenue and profit for FY25/3 increased year-over-year, driven by strong equipment and service sales, with net income up 60.9% and operating profit up 66.9%.

• Generative AI adoption spurred capital investment in advanced DRAM, with Logic/Foundry investment rising for advanced nodes and NAND investment resuming.

• Market share in batch ALD-compatible deposition equipment reached a record high of over 70% in CY24.

• Orders and order backlog at year-end were significantly above expectations, especially in NAND and service segments.

• Year-end dividend increased to JPY 36, reflecting improved net income.

Financial highlights

• FY25/3 revenue rose 32.1% YoY to JPY 238.9B; adjusted operating profit up 53% YoY to JPY 57.8B; adjusted net income up 55% YoY to JPY 42.3B.

• Fourth quarter revenue grew 31% YoY, with adjusted operating income up 50% YoY.

• Equipment revenue increased 39% and service revenue 19% YoY for the full year.

• DRAM equipment revenue up 67%, NAND up 32%, and logic/foundry up 30% YoY.

• Free cash flow for FY25/3 was JPY 10.8B, with significant cash outflows for early loan repayment and treasury stock acquisition.

Outlook and guidance

• FY26/3 revenue forecast at JPY 244.0B, up 2.1% YoY; adjusted operating profit forecast at JPY 55.2B, down 4.4% YoY; net income guidance flat at JPY 36.0B.

• Annual dividend projected at JPY 36, with a payout ratio over 20% based on adjusted net income.

• Equipment revenue expected to increase 3%, service revenue to remain flat; equipment to comprise 70% of total revenue.

• NAND equipment sales expected to increase 2.8 times, while DRAM sales forecast to decrease 35% YoY.

• China revenue share projected to decline from 44% to 33% of total revenue.