SCREEN Holdings (7735) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 FY2026 rose 1.2% year-over-year to ¥135.7 billion, but operating income declined 12.2% to ¥24.3 billion, with an 18% margin, mainly due to higher fixed costs.

• Profits decreased year-over-year despite higher sales, with results largely in line with forecasts.

• Equity ratio improved to 64.5% due to asset reduction and lower interest-bearing debt.

• Comprehensive income dropped 16.6% year-over-year to ¥19,991 million.

Financial highlights

• Net income attributable to owners was ¥16.6 billion, down 8.4% year-over-year.

• Ordinary income was ¥24.5 billion, down 11.9% year-over-year; operating margin was 18%, down 2.7 points.

• Gross profit margin for Q1 FY2026 was 37.7%, down from 39.1% a year earlier.

• Operating cash flow was ¥6.9 billion; free cash flow was negative ¥2.7 billion.

• Cash and cash equivalents at quarter-end totaled ¥167.2 billion, down ¥31.3 billion from March 31, 2025.

Outlook and guidance

• Full-year forecast: net sales ¥621 billion, operating income ¥117 billion (18.8% margin), net income ¥88 billion.

• Annual dividend expected at ¥280 per share, targeting a payout ratio of 30% or above.

• Growth investments to continue, especially in advanced packaging and AI-related applications.

• No revision to previously announced earnings or dividend forecasts.

• Market expects lower single-digit WFE growth in CY2026, with DRAM and AI demand as key drivers.