| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥4368.9B | ¥3933.1B | +11.1% |
| Operating Income | ¥1849.9B | ¥1668.3B | +10.9% |
| Ordinary Income | ¥1849.4B | ¥1689.4B | +9.5% |
| Net Income | ¥1317.3B | ¥1160.8B | +13.5% |
| ROE | 22.4% | 23.6% | - |
For the fiscal year ended March 2026, results came in at Revenue ¥4,368.9B (YoY +¥435.8B +11.1%), Operating Income ¥1,849.9B (YoY +¥181.6B +10.9%), Ordinary Income ¥1,849.4B (YoY +¥160.0B +9.5%), and Net Income ¥1,317.3B (YoY +¥156.5B +13.5%), representing revenue and profit growth. Gross margin was 70.1% and operating margin 42.3%, maintaining an extremely high-profitability structure, and capital efficiency remained strong with ROE of 22.4%. By region, Taiwan was the largest growth driver at ¥1,173.8B (YoY +¥429.7B +57.8%), with sales to major customer TSMC of ¥482.4B contributing. Capital expenditure was active at ¥351.4B (2.4x depreciation ¥148.2B), and Operating Cash Flow was ¥1,335.4B (+10.9%). However, Investment CF of -¥1,357.7B resulted in Free Cash Flow of -¥22.3B, a small negative. Contract liabilities rose to ¥500.1B (YoY +¥60.7B), and the buildup of backlog supports future revenue.
[Revenue] Revenue was ¥4,368.9B (YoY +11.1%). By region: Taiwan ¥1,173.8B (¥744.0B prior year, +57.8%), China ¥1,349.8B (+1.9%), Korea ¥330.7B (-21.9%), Americas ¥349.0B (-27.9%), Asia ¥441.2B (+30.2%), Japan ¥456.1B (+11.1%), Europe ¥268.4B (-3.7%). Taiwan’s sharp rise drove the overall increase. In Taiwan, sales to major customer TSMC of ¥482.4B contributed, supported by strong demand for semiconductor manufacturing equipment for advanced logic and HBM. China showed only modest growth; Korea and the Americas declined double digits, but Taiwan and Asia growth produced overall positive growth. Gross margin slightly declined to 70.1% (from 70.6%, -0.5pt) but remained in the 70% range, reflecting continued product superiority and pricing power.
[Profitability] Cost of sales rose to ¥1,304.1B (prior year ¥1,157.4B, +12.7%), outpacing sales growth and causing the small decline in gross margin. SG&A was ¥1,214.9B (prior year ¥1,107.4B, +9.7%), improving to 27.8% of sales (prior year 28.2%), a 0.4pt improvement demonstrating scale benefits. Operating Income was ¥1,849.9B (+10.9%), operating margin 42.3% (prior year 42.4%, -0.1pt), maintaining high levels similar to the prior year. Non-operating income/expenses comprised income ¥21.4B and expenses ¥22.0B, net -¥0.5B with minimal impact: foreign exchange gains ¥8.1B contributed positively while exchange losses ¥12.1B were recorded as non-operating expense, netting a slight negative. Ordinary Income was ¥1,849.4B (+9.5%), ordinary margin 42.3%, in line with operating-stage profitability. Extraordinary items were income ¥0.1B and loss ¥11.4B, net -¥11.3B, mainly due to loss on disposal of fixed assets ¥1.4B. Profit before tax was ¥1,838.1B (+9.3%); after corporate taxes ¥482.1B (effective tax rate 26.2%) and non-controlling interests ¥0.8B, Net Income attributable to owners was ¥1,317.3B (+13.5%), net margin 30.2% (prior year 29.5%, +0.7pt) which improved. In conclusion, revenue and profit increased by capturing demand in Taiwan and Asia, maintaining high gross and operating margins; one-off effects were minimal.
[Profitability] Operating margin 42.3% (prior year 42.4%), Net margin 30.2% (prior year 29.5%, +0.7pt), both at very high levels. Gross margin 70.1% reflects a high-value mix of consumables and equipment and ability to maintain pricing, and SG&A ratio 27.8% (prior year 28.2%, -0.4pt) improved slightly from scale benefits. [Investment Efficiency] ROE 22.4% (below prior year 27.6% but still in the 20% range), ROA 25.7% (prior year 25.8%), indicating high capital efficiency. EPS ¥1,249.84 (prior year ¥1,143.26, +9.3%), and payout ratio 36.1%, maintaining a balanced dividend policy. [Cash Quality] Operating Cash Flow ¥1,335.4B (YoY +10.9%), OCF/Net Income 1.01x indicates good cash backing of earnings, though Free Cash Flow was -¥22.3B due to active capex ¥351.4B (2.4x depreciation ¥148.2B), resulting in a temporary negative. [Financial Soundness] Equity Ratio 79.1% (prior year 75.3%, +3.8pt), current ratio 320.2%, quick ratio 294.9%, extremely healthy, with cash and deposits ¥2,845.8B providing ample liquidity. Interest-bearing debt is effectively zero; net cash ¥2,845.8B indicates debt-free operations.
Operating Cash Flow was ¥1,335.4B (YoY +10.9%), demonstrating solid generation at 72.2% relative to Operating Income ¥1,849.9B. In working capital, Accounts Receivable increased by ¥110.1B, Inventories increased by ¥2.1B, and Accounts Payable decreased by ¥106.9B, creating cash absorption factors, partially offset by an increase in contract liabilities of ¥15.7B. Corporate tax payments of ¥551.1B were a major cash outflow, but after working capital and tax adjustments, OCF subtotal ¥1,876.8B resulted in net OCF ¥1,335.4B. Investment CF was -¥1,357.7B, mainly due to Capital Expenditure ¥351.4B and includes deposit placements into time deposits of ¥1,000B. Financing CF was -¥450.4B, primarily for dividend payments ¥453.1B (¥453.2B to owners of the parent + ¥0.7B to non-controlling interests). Free Cash Flow was Operating CF ¥1,335.4B + Investment CF -¥1,357.7B = -¥22.3B, a small negative; cash change including foreign exchange effect was -¥445.9B, mainly due to transfers into time deposits. Ending cash and deposits were ¥2,845.8B (prior year ¥2,291.7B, +24.2%), increasing liquidity while executing active investment and dividends.
Operating Income ¥1,849.9B constitutes the bulk of earnings. Non-operating net -¥0.5B (as % of Revenue -0.01%) and extraordinary net -¥11.3B (as % of Revenue -0.3%) indicate very limited impact from one-off items. In non-operating items, foreign exchange gains ¥8.1B and foreign exchange losses ¥12.1B net to -¥4.0B, and other non-operating income ¥2.5B (including subsidies ¥8.2B and rental income ¥4.0B) partially offset. The difference between Ordinary Income ¥1,849.4B and Operating Income is only -¥0.5B, reflecting core business profitability. Operating CF ¥1,335.4B is 1.01x of Net Income ¥1,317.3B, indicating limited accruals. Comprehensive income ¥1,402.8B exceeded Net Income ¥1,317.3B by ¥85.5B, with foreign currency translation adjustments ¥36.4B, actuarial gain/loss adjustments related to retirement benefits ¥7.4B, and OCI attributable to associates ¥3.0B contributing positively. Net FX impact on Operating Income was about -¥0.5B, small, indicating high quality of earnings. Profit before tax ¥1,838.1B with corporate taxes ¥482.1B (effective tax rate 26.2%) is standard; no notable deferred tax effects or tax rate changes, indicating an ordinary tax burden structure.
Full Year guidance disclosed shows Revenue ¥1,061.0B (YoY +18.0%), Operating Income ¥420.0B (YoY +21.8%), Ordinary Income ¥423.0B (YoY +24.4%), Net Income ¥401.0B (YoY +15.1%), but actual results were Revenue ¥4,368.9B, Operating Income ¥1,849.9B, Net Income ¥1,317.3B — roughly 4.1x revenue, 4.4x operating income, and 3.3x net income above guidance. This discrepancy likely indicates the disclosed guidance pertains to the next fiscal year (FY2027), and direct comparison with the current period results is inconsistent. As next-year guidance, Revenue +18.0% to ¥1,061B (a -75.7% change vs. this period) is not logically consistent and requires confirmation of data definition. Given contract liabilities of ¥500.1B and rising advances, there is significant room for near-term revenue recognition, assuming continued demand for advanced logic and HBM semiconductor equipment.
Annual dividend per share is ¥505, with a payout ratio of 36.1%, an appropriate level. Based on the average shares outstanding during the period of 108,431 thousand shares, total dividends amount to ¥45,320M (¥45,310M actual dividend payments), which is not covered by Free Cash Flow -¥22.3B but represents 33.9% of Operating CF ¥1,335.4B and 15.9% of cash and deposits ¥2,845.8B, indicating sufficient capacity to pay. The payout ratio of 36.1% balances profit growth and investment needs; given ROE 22.4% and high capital efficiency, there is room for future dividend increases. Share buybacks during the period were minimal at ¥1M, and Total Return Ratio is approximately in line with the payout ratio. The payout ratio remains at the prior-year level of 36.1% (back-calculated from prior dividend ¥124×4 and Net Income ¥1,160.8B), suggesting a stable dividend policy.
Major-customer concentration risk: Sales to TSMC ¥482.4B (about 11.0% of Revenue) and high dependence on the Taiwan market mean that changes in TSMC’s capex policy or shifts in order timing would directly impact earnings. Taiwan sales ¥1,173.8B account for 26.9% of total, indicating high regional concentration. A slowdown in investment for advanced logic and HBM could cause rapid order declines.
Working capital efficiency deterioration risk: Accounts Receivable ¥527.8B (prior year ¥399.7B, +32.0%) and Contract Liabilities ¥500.1B (prior year ¥439.3B, +13.8%) show buildup of receivables and advances, raising concerns about extended AR and contract liability turnover days. Inventories ¥390.2B (prior year ¥329.6B, +18.4%) are also rising; in volatile demand conditions, inventory adjustment costs and discount pressure may materialize. If cash conversion efficiency improvement lags (OCF ¥1,335.4B / EBITDA ¥1,998.1B = 0.67x), continued negative Free Cash Flow risk may persist.
Recovery risk on aggressive investment: Capex ¥351.4B (2.4x depreciation ¥148.2B) and Construction in Progress ¥338.9B (prior year ¥169.5B, +100.0%) indicate large capacity expansion. If demand environment suddenly changes or the investment cycle for advanced nodes pauses, there is risk of unmet assumed utilization rates and extended payback periods. Combined fixed-cost increases and utilization decline could make maintaining high operating margins difficult.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 42.3% | 7.8% (4.6%–12.3%) | +34.6pt |
| Net Margin | 30.2% | 5.2% (2.3%–8.2%) | +25.0pt |
Both operating and net margins exceed manufacturing medians by a large margin, ranking the company among the industry’s top in profitability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 11.1% | 3.7% (-0.4%–9.3%) | +7.4pt |
Revenue growth outperforms the median by +7.4pt, achieving high growth within manufacturing.
※ Source: Company compilation
Sustainability of high-profit structure: Gross margin 70.1%, Operating margin 42.3%, ROE 22.4% show manufacturing-top-class profitability, confirming technological superiority and pricing power in the advanced semiconductor equipment market. Disclosure of sales to Taiwan TSMC ¥482.4B indicates a strong relationship with major customers, and capturing demand for advanced logic and HBM is a growth driver. The build-up of contract liabilities ¥500.1B is a notable leading indicator for future revenue.
Progress in an aggressive investment phase: Capex ¥351.4B (2.4x depreciation) and rapid increase in Construction in Progress ¥338.9B (+100.0% YoY) indicate an offensive investment posture to expand supply capacity and maintain technological edge. Free Cash Flow -¥22.3B is temporarily negative, but Operating CF ¥1,335.4B and cash and deposits ¥2,845.8B provide ample investment capacity. In the short term, deterioration in working capital efficiency (Accounts Receivable +32.0%, Inventory +18.4%) weighs on cash generation; normalization of inventory turnover and AR collection will be the next evaluation points.
This report is an AI-generated earnings analysis document based on XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company from public financial statements. Investment decisions are your responsibility; please consult a professional adviser as necessary.