Summary
FY3/27 1Q delivered strong top- and bottom-line growth. Revenue reached JPY 732,388M (+33.3% YoY) and operating income JPY 211,407M (+46.1% YoY). Alongside the results, the company raised its 1H guidance to revenue of JPY 1,620,000M and recurring profit of JPY 464,000M. In 2Q, the focus will be on results against this revised plan. A second focus is how the 2Q standalone profitability implied by the plan compares with 1Q's operating income margin of 28.9%. The company intends to disclose full-year consolidated guidance and its year-end dividend forecast with its 1H results. Its assumptions for 2H customer capex will be the single most important input for investment decisions. The build-up in inventories and advances received supports revenue recognition in coming periods, and we will track it as a proxy for the durability of the order environment. On capital allocation, the approx. JPY 150B share buyback concluded in August. We will also check how it flows through to share count and EPS from 2Q onward.
Key Points for Next Quarter
| Key Points & Focus | Implications |
|---|---|
1H Plan AchievementCumulative 1H revenue and recurring profit vs. revised plan | The revised plan calls for revenue of JPY 1,620,000M (+37.3% YoY) and recurring profit of JPY 464,000M (+51.2% YoY). Recurring profit progress stood at 46.5% after 1Q (our estimate). An in-line result would validate the credibility of the upward revision. |
2Q Standalone ProfitabilityGross profit margin, operating income margin and R&D expense levels | Backing out from the 1H plan, implied 2Q standalone operating income is JPY 246,593M, with an operating income margin of 27.8% (our estimate). We will assess whether the decline from 1Q's 28.9% stems from product mix or higher R&D expenses (1Q: JPY 72,046M, +15.9% YoY). |
Full-Year GuidanceFirst disclosure of full-year consolidated guidance and 2H assumptions | The company plans to disclose full-year guidance with its 1H results. Starting from the 1H plan of JPY 1,620,000M, how much continued AI-related investment it bakes into 2H will drive valuation assumptions. |
Leading Indicators for Orders and ProductionPeriod-end balances of inventories and advances received | At end-1Q, inventories stood at JPY 751,551M (+5.4% vs. prior fiscal year-end, our estimate) and advances received at JPY 294,326M (+JPY 23,834M). Continued growth would point to a solid shipment pipeline. |
Capital Policy and Shareholder ReturnsYear-end dividend forecast and change in average shares outstanding | The interim dividend has been revised to JPY 384 (targeting a 50% payout ratio). The company booked JPY 11,478M in share repurchases in 1Q and announced completion of the buyback on August 3. We will gauge the EPS impact of the lower share count from 2Q onward. |
Key Issues from Previous Results (FY3/27 1Q Results)
1Q benefited from growth in capex for AI-related semiconductors, driven by demand for data center AI servers. Revenue came in at JPY 732,388M (+33.3% YoY) and recurring profit at JPY 215,626M (+46.3% YoY), a substantial profit increase. The company raised all line items of its 1H guidance, originally announced on April 30. It also lifted its interim dividend forecast from JPY 361 to JPY 384. Full-year guidance and the year-end dividend will be disclosed with the 1H results. 2Q will therefore require investors to evaluate actual results and new guidance at the same time.
1. Results vs. the Upwardly Revised 1H Plan
- Previous Quarter: 1Q revenue was JPY 732,388M, operating income JPY 211,407M, recurring profit JPY 215,626M, and quarterly net income attributable to owners of parent company JPY 164,341M.
- What to Watch This Quarter: Results against the 1H plan (revenue JPY 1,620,000M, operating income JPY 458,000M, recurring profit JPY 464,000M, 1H net income JPY 349,000M).
- Key Metrics: 1H recurring profit vs. plan, and progress beyond the 46.5% achieved after 1Q (our estimate).
2. 2Q Standalone Profitability and Cost Structure
- Previous Quarter: 1Q gross profit margin was 46.8% (prior-year period: 46.2%) and operating income margin 28.9% (prior-year period: 26.3%). SG&A totaled JPY 131,304M (+20.2% YoY), of which R&D expenses were JPY 72,046M (+15.9% YoY).
- What to Watch This Quarter: Actual results against implied 2Q standalone revenue of JPY 887,612M and operating income of JPY 246,593M, both backed out from the 1H plan (our estimates). We will also check the direction of gross profit margin.
- Key Metrics: Cumulative 1H gross profit margin and operating income margin (vs. 1Q actuals of 46.8% and 28.9%), and R&D expenses as a percentage of revenue (1Q: 9.8%, our estimate).
3. First Disclosure of Full-Year Consolidated Guidance
- Previous Quarter: The 1Q earnings release left full-year guidance undisclosed. It explicitly stated that guidance would be provided with the 1H results.
- What to Watch This Quarter: How the company frames its assumptions for 2H customer capex, and the degree of 2H growth over the 1H plan. The company expects the semiconductor equipment market to keep growing over the medium to long term.
- Key Metrics: Full-year revenue and recurring profit guidance, and the implied 2H figures after deducting the 1H plan of JPY 1,620,000M and JPY 464,000M (compared on the basis of our estimates).
4. Demand Durability Reflected in Inventories and Advances Received
- Previous Quarter: At end-1Q, merchandise and finished goods stood at JPY 289,501M, work in process JPY 240,417M, raw materials and supplies JPY 221,633M, and advances received JPY 294,326M. Operating CF was JPY 118,745M (prior-year period: JPY 74,955M). A JPY 36,269M increase in inventories was a cash outflow.
- What to Watch This Quarter: Whether the inventory build reflects advance procurement for higher shipments, assessed alongside revenue and advances received. As the company reports a single segment, a product-level breakdown will depend on supplementary data in the earnings presentation.
- Key Metrics: Total inventories at end-1H (end-1Q: JPY 751,551M, our estimate), advances received (end-1Q: JPY 294,326M), and 1H operating CF (prior-year period: JPY 250,848M).
5. Progress on Shareholder Returns and Capital Policy
- Previous Quarter: In 1Q, the company cancelled JPY 95,470M of treasury shares and booked JPY 11,478M in repurchases. The interim dividend forecast was revised to JPY 384 under its performance-linked policy targeting a 50% payout ratio. The year-end dividend remains undetermined.
- What to Watch This Quarter: The level of the year-end dividend forecast, and the EPS impact of the lower average share count following completion of the buyback.
- Key Metrics: 1H average shares outstanding (1Q: 454,785,263 shares), 1H EPS (company plan: JPY 767.51), and the year-end dividend forecast.
Key Timely Disclosures During the Period
- 2026/09/17Notice Regarding Establishment of a Sponsored ADR (American Depositary Receipt) Program - Establishment of a Level I ADR program with no new share issuance, aimed at broadening the US investor base and raising visibility. There is no direct P&L impact, but shifts in the shareholder base make it a supply-demand consideration.
- 2026/08/03Notice Regarding Status and Completion of Share Repurchase - Repurchases under the May 29, 2026 board resolution have been completed. JPY 11,478M was booked in 1Q. We will check the timing of the remaining amount and its impact on average shares outstanding and EPS in the 2Q results.
- 2026/07/30Notice Regarding Continuation of the Stock Compensation Plan for Group Officers and Employees in Japan and Overseas - Continuation of talent incentives. SG&A and treasury share-related entries warrant attention, but the earnings impact should be limited.
Previous Quarter Results (FY3/27 1Q Actual)
The company operates in a single segment, semiconductor production equipment. It mainly supplies front-end equipment, including coater/developers, etch, deposition and cleaning systems, to leading-edge device makers worldwide. In 1Q, data center AI server demand drove growth across the semiconductor market, and capex for AI-related semiconductors expanded. Its dividend policy is performance-linked, targeting a 50% payout ratio on net income attributable to owners of parent company. The interim dividend forecast was raised to JPY 384. Full-year consolidated guidance will be disclosed with the 1H results.
| Item | Amount | YoY | vs. Company Plan | Notes |
|---|---|---|---|---|
| Revenue | JPY 732,388M | +33.3% | - | Growth in capex for AI-related semiconductors |
| Operating Income | JPY 211,407M | +46.1% | - | Operating income margin of 28.9% (prior-year period: 26.3%, our estimate); R&D expenses of JPY 72,046M |
| Recurring Profit | JPY 215,626M | +46.3% | - | FX loss of JPY 504M (prior-year period: JPY 1,683M) |
| Quarterly Net Income Attributable to Owners of Parent Company | JPY 164,341M | +39.5% | - | Prior-year period included a JPY 4,849M VAT refund booked as extraordinary income |
| EPS | JPY 361.36 | +40.5% | - | Average shares outstanding: 454,785,263 |
Progress Toward 1H Plan (Recurring Profit Basis): 46.5% (prior-year period: 48.0%, calculated as 1Q actual relative to 1H actual). Both figures are our estimates. As full-year consolidated guidance will be disclosed with the 1H results, the 1H plan is used as the benchmark.
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