KUBOTA CORPORATION
6326・Prime Market・Machinery
Business
Kubota Corporation is a long-established manufacturing company founded in 1890, built on two core pillars: the "Machinery" segment, centered on agricultural machinery (tractors, combine harvesters, rice transplanters, etc.), Engines, and Construction Machinery, and the "Water & Environment" segment, which handles ductile iron pipes, Environmental Plants & Pumps, and more. The company operates globally through a group of 207 companies, including 190 consolidated subsidiaries and 17 equity-method affiliates, with an overseas sales ratio reaching 77.3% of total net sales of ¥3,018,891 million. Its major customers span a wide range, including farmers, construction contractors, municipalities, and industrial infrastructure operators, with manufacturing and sales bases in North America, Europe, and Asia (India, Thailand, etc.). Under its long-term vision "GMB2030," the company positions itself as a "platformer that supports life," placing the resolution of social challenges related to food, water, and the environment at the core of its business.
Business Model
Kubota operates a vertically integrated revenue model spanning product planning, R&D, manufacturing, sales, after-sales service, and retail financing (Kubota Credit, etc.). The Machinery segment (87.1% of net sales) is primarily build-to-forecast, delivering products to farmers and construction contractors through a global sales network. The Water & Environment segment (12.4% of net sales) is mainly build-to-order, with an order backlog of ¥329,918 million supporting revenue stability. The company continues to pursue profitability improvement through price revisions, incentive management, and fixed cost reductions.
Company Strengths
The company has manufacturing and sales bases in North America, Europe, and Asia, achieving an overseas sales ratio of 77.3%. In 2022, it made Escorts Kubota in India a subsidiary, capturing increased sales in the Indian agricultural machinery market through new product introductions and the effect of GST reductions. A group structure of 207 companies both domestically and internationally supports stable supply across multiple regions.
Orders received in the Water & Environment segment reached ¥319,301 million (up 23.9% year on year), and the order backlog reached ¥329,918 million (up 10.4% from the previous fiscal year-end), with favorable leading indicators. Against the backdrop of the government's formulation of the first mid-term implementation plan for national resilience, demand for renewal of aging water and sewage infrastructure is expanding, and segment profit achieved ¥32,983 million, up 35.9% year on year.
R&D expenditure for the fiscal year was ¥110,300 million (of which ¥103,500 million was in the Machinery segment). The company continues to develop next-generation agricultural technologies, including the addition of generative AI and satellite remote sensing functions to its farming support system "KSAS," expansion of models equipped with GS (straight-line automatic steering) functionality, and the exhibition of a concept model for an unmanned hydrogen fuel cell tractor.
ENVALITH's Perspective
Performance Trend
Revenue expanded rapidly from FY2021 through FY2023, then remained flat in FY2024 and FY2025 at ¥3,016,281 million and ¥3,018,891 million, respectively. Operating profit peaked at ¥328,829 million in FY2023, then declined for two consecutive periods to ¥315,636 million in FY2024 and ¥265,470 million in FY2025. However, in Q1 of FY2026 (ending December 2026) (January–March 2026), revenue rose sharply to ¥810,012 million (up 13.7% year on year) and operating profit rose to ¥98,042 million (up 59.1% year on year). External tailwinds included a shift toward yen depreciation and steady performance in the North American construction machinery market, compounded by the effect of the company's own price revisions. The full-year forecast calls for revenue of ¥3,150,000 million (up 4.3% year on year) and operating profit of ¥300,000 million (up 13.0% year on year), suggesting the company has entered a phase of genuine profitability recovery.
Growth Strategy
Shift toward profitability and capital-efficiency focus while pursuing both deepening and new exploration in the Machinery and Water & Environment businesses
Continuing to expand sales and revise prices in the North American construction machinery and agricultural machinery markets, enhancing profitability while absorbing increased U.S. tariff costs. North American sales in the first quarter of FY2026 (ending December 2026) expanded to ¥327,019 million (up 21.9% year on year), and this is expected to remain a key profit driver for the full fiscal year.
The company-ization implemented in January 2025 established a framework of delegated authority and autonomous operations. While steadily capturing domestic infrastructure renewal demand, the segment aims to expand overseas sales in the environmental business (up 59.4% year on year in the first quarter of FY2026, ending December 2026) and maintain a high segment profit margin of 13.6%.
From FY2026 (ending December 2026), the management methodology has been changed to allocate expenses previously included in "Adjustments" to each business segment. This makes the true earning power of each segment visible, aiming to optimize resource allocation and strengthen profit responsibility within business divisions. Year-on-year comparisons have already been calculated using restated figures.
In response to the structural issue of increases in inventory and trade receivables pressuring operating cash flow, the company is promoting inventory optimization and more efficient receivables collection. Operating cash flow in the first quarter of FY2026 (ending December 2026) remained at only ¥14,748 million, and generating cash flow commensurate with profit growth remains a challenge.
Last updated: July 17, 2026