KDDI CORPORATION
9433・Prime Market・Information & Communication
Business
KDDI is Japan's second-largest integrated telecommunications group, comprising 193 consolidated subsidiaries and 46 equity-method affiliates. For individual customers, it provides 5G communications through its multi-brand lineup of "au," "UQ mobile," and "povo," while also expanding into Financial Services (au Jibun Bank, au PAY Card), energy, LX (Life Transformation) Services, and lifestyle services through collaboration with Lawson. For corporate customers, it offers IoT, DX, cloud, and global data centers under the "TELEHOUSE" brand as a one-stop solution, and has also launched "WAKONX," a new platform for the AI era. Through its 193 domestic and overseas consolidated subsidiaries, the group maintains a customer base spanning both individual and corporate segments.
Business Model
Monthly mobile subscription charges (ARPU) form the core of revenue, with cross-selling of financial services, energy, entertainment, and other offerings to the same customer base to maximize LTV (lifetime value). For corporate customers, the company secures recurring revenue through combined mobile, IoT, and data center solutions. Equity-method investment gains and losses from Lawson, Kakaku.com, and others also contribute to earnings, with equity in earnings of affiliates reaching ¥39,890 million in FY2026 (ending March 2026), up 45.1% year on year.
Company Strengths
KDDI achieved the top ranking in Japan for four consecutive periods in Opensignal's "Mobile Network Experience Report." Concrete usage results underscore its quality advantage, including au Starlink Direct surpassing 4 million connections and cumulative usage of 5G Fast Lane reaching approximately 2.5 million users. Mobile ARPU increased by ¥100 year on year, while the number of active smartphone subscriptions rose by 360,000 contracts year on year, achieving both ARPU growth and subscriber growth simultaneously.
Financial Services (au Jibun Bank, au PAY Card, etc.) continues to grow rapidly, posting a CAGR of 30.4% from FY2023 (ended March 2023) to FY2026 (ending March 2026). Collaboration with the Ponta Point economic ecosystem and Lawson (an equity-method jointly controlled entity) has strengthened customer engagement, building a virtuous cycle that also contributes to reducing telecommunications churn.
TELEHOUSE Data Center Services has earned high acclaim at key locations, including London (the world's largest connectivity hub), Paris (the largest in France), Toronto (the largest in Canada), and Bangkok (ranked No.1 in connectivity in Thailand). In January 2026, the Osaka Sakai Data Center opened, establishing a framework to capture AI-related demand. Business Segment revenue grew 8.7% year on year, and operating income increased 12.2% year on year, reflecting accelerating growth.
ENVALITH's Perspective
Performance Trend
Revenue reached a record high of ¥6,071,915 million in FY2026 (ending March 2026) (up 4.1% year on year), continuing the growth trajectory that resumed following the temporary decline in FY2024. Operating income increased only slightly to ¥1,099,125 million (up 1.1% year on year), pressured by selling, general and administrative expenses of ¥1,529,370 million (up 7.0% year on year), which grew at a faster rate than revenue. On the other hand, an expansion in equity in earnings of affiliates (¥39,890 million, up 45.1% year on year) and an improvement in other non-operating income and expenses (¥24,264 million) contributed to profit attributable to owners of parent reaching a record high of ¥707,112 million (up 7.9% year on year). Free cash flow also improved significantly to ¥708,398 million (from ¥68,939 million in the previous fiscal year), strengthening the company's financial position. For FY2027 (ending March 2027), the company forecasts adjusted operating income of ¥1,210,000 million (up 5.0% year on year) and adjusted profit for the year of ¥731,000 million (up 2.7% year on year).
Growth Strategy
Under the medium-term management strategy "Power-to-Connect 2028," the company is promoting the fusion of AI and telecommunications infrastructure as well as the expansion of growth areas
Building a system that integrates data centers, IoT, and cloud by fusing 5G telecommunications infrastructure with AI infrastructure. The growth areas of the Business Segment (IoT, data centers, etc.) achieved high growth in FY2026 (ending March 2026), with revenue up 8.7% and operating income up 12.2%, and expansion continues while capturing tailwinds from external AI demand.
Fusing real-world touchpoints, including collaboration with Lawson (an equity-method jointly controlled entity), with digital technology to enhance customer experience value in non-telecommunications services such as finance, energy, and LX. Equity in earnings of affiliates in FY2026 (ending March 2026) expanded significantly to ¥39,890 million (up 45.1% year on year), with the effects of the Lawson collaboration beginning to show in the figures.
Strengthening the framework for providing DX support and generative AI utilization solutions by fusing human resources acquired through M&A, such as KDDI Digital Divergence Holdings (KDH) and Alt, with the Group's existing personnel. The company is working to resolve industry-specific challenges for corporate customers through the WAKONX platform in the Business Segment.
The annual dividend for FY2026 (ending March 2026) is ¥80 per share (consolidated payout ratio of 43.6%), and the forecast for FY2027 (ending March 2027) is ¥84 (payout ratio of 42.8%), continuing the policy of dividend increases. In May 2026, the company resolved to cancel 180,396,507 shares of treasury stock, and also resolved to acquire up to ¥300.0 billion in treasury stock, including shares acquired from Kyocera and Toyota Motor Corporation. The company plans to maintain a consolidated dividend payout ratio of over 40% against adjusted net income for the next three fiscal years as well.
Last updated: July 19, 2026