| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥11286.1B | ¥7797.1B | +44.7% |
| Operating Income / Operating Profit | ¥4991.2B | ¥2281.6B | +118.8% |
| Profit Before Tax (Taxable Income) | ¥5167.2B | ¥2247.7B | +129.9% |
| Net Income / Net Profit | ¥3753.5B | ¥1611.8B | +132.9% |
| ROE | 47.2% | 31.8% | - |
FY2026 results landed at record highs with Revenue ¥11,286.1B (YoY +¥3,489.0B +44.7%), Operating Income ¥4,991.2B (YoY +¥2,709.6B +118.8%), Ordinary Income ¥4,253.7B (YoY +¥1,984.2B +87.4%), and Net Income ¥3,753.5B (YoY +¥2,141.7B +132.9%). Rapid expansion in test demand for AI-related and advanced semiconductors and an improved high-value product mix drove the Operating Margin up 14.9pt to 44.2%, and Net Margin improved by about 11pt to 33.3%, delivering substantial gains in both scale and quality. ROE was 57.6%, Equity Ratio 67.9%, and cash balance ¥3,399.7B, reflecting strong financials. The company returned ¥35.75B in dividends (¥357.5B?) — note: dividend amount reported as 配当357.5億円 → ¥357.5B — and repurchased ¥1,143.3B of shares for total shareholder returns of ¥1,500.8B, balancing shareholder returns with growth investment. Full-year guidance anticipates Revenue ¥1.42T and Operating Income ¥627.5B with ~+25% profit growth continuing, supported by sustained demand tailwinds from AI / high-bandwidth memory and advanced logic.
[Revenue] Revenue rose sharply to ¥11,286.1B (YoY +44.7%). The core TestSystem business led with ¥10,193.8B (+49.3%), accounting for 90.3% of the total. By region, Asia revenue was ¥10,400B (+48.7%), representing 91.8% of the total, driven by concentrated investment in advanced semiconductor testing centered in Taiwan and Korea. SoC tester market share expanded 7pt to 65%, with AI-related accounting for 95% and capturing the majority share in the global AI accelerator segment, underpinning growth. ServicesSupport revenue also grew steadily to ¥1,092.3B (+12.7%), aided by increased installed base and penetration of higher-value services. Gross profit margin improved 7.2pt to 64.3% (prior year 57.1%), reflecting optimized product mix and price gains that secured strong gross profit generation.
[Profitability] Operating Income was ¥4,991.2B (+118.8%), with Operating Margin improving 14.9pt to 44.2% (prior 29.3%). SG&A rose to ¥2,296.3B (+51.7%) alongside revenue growth, but the SG&A ratio improved to 20.3% (prior 25.1%), demonstrating strong operating leverage. Other expenses decreased significantly to ¥9.1B (prior ¥22.9B), as the prior-year impairment loss of ¥21.4B was not repeated, supporting profit improvement. Financial income increased to ¥20.35B (prior ¥1.89B), including a ¥17.31B valuation gain on call options, but at 1.8% of revenue its impact was limited; the rise in Ordinary Income to ¥4,253.7B (+87.4%) was driven mainly by the substantial expansion in Operating Income. Pre-tax income was ¥5,167.2B with corporate income tax expense of ¥1,413.7B (effective tax rate 27.4%), resulting in Net Income ¥3,753.5B (+132.9%) and Net Margin 33.3% (prior 20.7%), an improvement of about 11pt. Temporary items included financial income with a ¥17.31B call option valuation gain and ¥2.5B gain on business divestiture; together these total 1.9% of revenue and are limited, with the bulk of profit growth reliant on core operating income expansion. In conclusion, improvements in volume, mix, price, and cost control all contributed to strong revenue and substantial profit growth.
Reporting segments are TestSystem and ServicesSupport & Others. TestSystem revenue was ¥10,193.8B (YoY +49.3%), Operating Income ¥5,187.6B (+97.9%), and Operating Margin 50.9%, indicating very high profitability. This core segment generated approximately 104% of consolidated operating income before corporate expenses and SoC testers accounted for ¥76,740B (+74.2%), representing the majority with AI-related comprising 95% of that sales mix. Memory testers were ¥17,150B (+8.7%), driven by 90% high-performance DRAM and 10% non-volatile memory demand. ServicesSupport & Others posted Revenue ¥1,092.3B (+12.7%), Operating Income ¥87.6B (prior ¥34.5B, +154.3%), and Operating Margin improved to 8.0%. The elimination of the prior-year ¥21.4B impairment, stable service revenue growth from increased installed base, and ¥2.5B gain on business divestiture supported profit improvement. Corporate expenses rose to ¥23.95B (prior ¥14.94B), mainly due to increased R&D and ¥4.45B in stock-based compensation. On a composition basis, TestSystem accounted for 90.3% of revenue and about 97% of operating income (after corporate expense allocation), driving overall performance as the dominant business. TestSystem’s margin stood out at 50.9%, while ServicesSupport & Others improved to 8.0%; the latter’s stabilization enhances overall profitability. The primary driver of revenue and profit growth was the core TestSystem business’s capture of high-value AI-related demand and market share expansion, with ServicesSupport & Others also contributing to overall revenue stability through profitability and scale-up.
Profitability: ROE 57.6% (prior 34.4%), Operating Margin 44.2% (prior 29.3%), Net Margin 33.3% (prior 20.7%) — all materially improved. EBIT was ¥4,058.7B (prior ¥2,174.3B), up +86.7%. Cash quality: Operating Cash Flow / Net Income was 0.89x (prior 1.77x), indicating working capital build associated with growth partially constrained cash generation, though cash backing of earnings is generally good. FCF was ¥3,006.3B (prior ¥2,437.8B), up +23.3%. Investment efficiency: CapEx / Depreciation 1.29x (prior 0.64x) as the company enters a growth investment phase and accelerates capacity expansion. Financial soundness: Equity Ratio 67.9% (prior 59.3%), Current Ratio 253.2% (prior 193.8%), Debt/Capital 8.6% (prior 12.9%) — a conservative capital structure. Interest coverage approximately 147x (EBIT / Financial Expense), indicating negligible interest burden. CCC 155 days (estimate; prior data unavailable for comparison), DSO 74 days, DIO 210 days indicate prolonged receivables and inventory, suggesting room to improve working capital management.
Operating Cash Flow was ¥3,351.8B (YoY +17.2%), 0.89x of Net Income. Increases in receivables (-¥1,058.6B), inventory (-¥184.7B), and tax payments (-¥1,107.7B) partially constrained cash generation, while increases in payables (+¥318.9B) and advances received (+¥97.5B) contributed positively. Subtotal (before working capital changes) was ¥4,453.8B, covering Net Income ¥3,753.5B by approximately 1.2x, indicating a generally solid cash backing of profits. Investing Cash Flow was -¥345.5B (prior -¥421.9B), driven mainly by CapEx -¥330.1B (prior -¥174.1B). CapEx/Depreciation 1.29x reflects a growth investment phase and supports capacity expansion toward a 10,000-unit annual production target. Financing Cash Flow was -¥2,305.5B (prior -¥828.2B), driven by share buybacks -¥1,143.3B, dividend payments -¥357.5B, and short-term borrowings repayments -¥753.5B. FCF ¥3,006.3B (YoY +23.3%) covered dividends plus CapEx totaling ¥687.6B by roughly 4.4x and covered total shareholder returns ¥1,500.8B by about 2.0x, demonstrating strong cash generation. Cash generation assessment: while receivables and inventory build temporarily slowed cash generation pace, strong core profit generation and rising FCF lead to a “strong” assessment. If working capital management improves next period, further upside to OCF is expected.
With Ordinary Income ¥4,253.7B and Net Income ¥3,753.5B, the divergence between pre-tax and net income is limited after tax effects, and structural one-off factors are scarce. Financial income ¥20.35B (1.8% of revenue) includes a ¥17.31B valuation gain on call options, which relates to fair value gains on equity acquired as part of strategic investments and has limited repeatability. There is also ¥2.5B gain on business divestiture, but together these comprise 1.9% of revenue and are minor; the bulk of profits is underpinned by high operating profitability. When examining non-operating income: of the ¥20.35B financial income, the ¥17.31B call option valuation gain is a market-dependent one-off; excluding it, financial income is around ¥3.0B (interest/dividends etc.), structurally small. Accruals: OCF ¥3,351.8B slightly trails Net Income ¥3,753.5B due to temporary receivable and inventory increases, but the subtotal ¥4,453.8B covers Net Income by ~1.2x, indicating fundamentally good earnings quality. Overall, excluding part of the valuation gains, earnings quality is high and backed by recurring profit-generating capability.
Full-year forecast: Revenue ¥1.42T (YoY +25.8%), Operating Income ¥627.5B (+25.7%), Net Income ¥465.5B (+24.0%). Progress against current-period results is 79.5% for Revenue, 79.6% for Operating Income, and 80.6% for Net Income, landing at roughly 80% of the full-year run-rate (100% baseline), implying completion by Q4. No revisions were disclosed and movement from the initial plan is unknown, but given current order environment and market share gains, achieving the full-year forecast appears likely. Because progress rates are close to typical baselines, next fiscal year is expected to maintain last year’s growth pace. Order backlog data not disclosed, but PDF materials indicate CY26 SoC tester market of 2.2–2.7B, with solid growth forecast; assuming continued AI-related investment tailwinds, high margin sustainability is likely. CapEx is planned to rise substantially to ¥45.0B (this period ¥33.01B?), supporting continued capacity expansion and improving revenue visibility. Note: original Japanese listed 設備投資は450億円（当期330.1億円）→ translate to ¥45.0B (current ¥33.01B) — ensure numeric consistency: planned CapEx ¥45.0B, current period ¥33.01B.
Dividend is annual ¥59 (interim ¥29, year-end ¥30; prior year ¥39) with Payout Ratio 11.5% (Dividends ¥357.5B / Net Income ¥3,753.5B), an extremely conservative level. Share buybacks totaled ¥1,143.3B with ¥17.21B of treasury shares cancelled. Total shareholder returns (Dividends + Buybacks) were ¥1,500.8B, implying a Total Return Ratio of 40.0% (Total Return / Net Income). FCF coverage is about 8.4x for dividends and about 2.0x for total returns, indicating low risk of dividend cuts. From a capital efficiency perspective, buybacks and cancellations reduced treasury shares by ¥59.72B (-57.4%), contributing to ROE uplift. Given high FCF generation, flexible returns are feasible going forward. Next-period dividend plan is undecided, but maintaining the current Payout Ratio 11.5% and Total Return Ratio 40% would leave room for further dividend increases.
[Short Term] Continued test demand for AI / high-bandwidth memory and advanced logic, progress on capacity expansion, upside to OCF from improved working capital management, further SoC tester market share gains, FX sensitivity (USD/JPY assumed 150), and CY26 semiconductor tester market trends (SoC 2.2–2.7B).
[Long Term] Full operation of the Advantest Innovation Center and market introduction of next-generation test solutions, establishment of ATE mass-production capability for silicon photonics, deeper collaboration with probe card manufacturers strengthening competitive advantage in test interfaces, platform linkage expansion via participation in Applied Materials EPIC, and full-scale use of AI to accelerate operations and improve efficiency, enhancing ability to respond to long-term structural growth in the semiconductor industry.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 57.6% | 6.3% (3.2%–9.9%) | +51.3pt |
| Operating Margin | 44.2% | 7.8% (4.6%–12.3%) | +36.5pt |
| Net Margin | 33.3% | 5.2% (2.3%–8.2%) | +28.1pt |
Profitability substantially exceeds the industry median, confirming a top-tier position.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 44.7% | 3.7% (-0.4%–9.3%) | +41.0pt |
Revenue growth also far outpaces the industry average, reflecting structural tailwinds from AI-related demand.
※ Source: Company compilation
Cyclical sensitivity and working capital management risk: DIO 210 days, DSO 74 days, CCC 155 days indicate lengthening working capital with a rapid increase in receivables and inventory during the growth phase. OCF / Net Income 0.89x down from 1.77x last year, temporarily reducing cash-generation efficiency. If semiconductor equipment investment cycles decline sharply, risks such as inventory write-downs and delayed receivables may materialize, substantially worsening OCF. Improvement in next-period working capital management is a key monitoring point.
Regional and customer concentration risk: Asia revenue ¥10,400B accounts for 91.8% of total, concentrated in Taiwan, Korea, and China. Geographic concentration of advanced semiconductor investment introduces geopolitical risks (US-China tensions, Taiwan Strait) and customer concentration risk (dependence on large foundry and memory customers). Changes in specific regional/customer investment plans or policies could materially affect revenue and orders. Diversifying regional presence and customer portfolio is a medium-to-long-term challenge.
Short-term borrowing reliance and FX risk: Interest-bearing debt ¥74.96B is entirely short-term borrowings; although repaid at period-end, prior period-end recorded ¥74.95B, highlighting liquidity management and short-term refinancing flexibility concerns. Cash balance ¥339.97B is ample, but structurally there is some dependence on short-term borrowings. FX sensitivity: against FY26 assumption USD 150/JPY, 1 JPY depreciation improves Operating Income by ¥4.0B; against EUR 1 JPY depreciation worsens by ¥0.4B — (note: original numbers were 営業利益+40億円 and -4億円; translate to ¥4.0B and -¥0.4B). In yen appreciation scenarios, margin compression risk exists. Given the high Asia ratio, yen appreciation could impact both top-line and bottom-line.
The company has established overwhelming competitive advantage in AI/advanced semiconductor testing, with SoC tester market share expanding to 65% (prior 58%) and AI-related sales comprising 95%, constituting a structural growth driver. Achieving Operating Margin 44.2% and ROE 57.6% demonstrates industry-leading profitability, indicating high barriers to entry and pricing power. Capacity expansion (10,000-unit annual target) and increased R&D to ¥100.0B (note: original Japanese R&D increase to 1,000億円 → ¥100.0B) are preparing the company for next-generation test solution market introduction, supporting sustainable medium-to-long-term revenue growth.
Improvements in working capital management are key to OCF upside and capital efficiency improvement next period. With DSO 74 days, DIO 210 days, and CCC 155 days indicating elongation likely tied to growth, recovery in receivables and inventory turnover that pushes OCF / Net Income above 1.0x would further expand FCF and strengthen shareholder return capacity. Current Payout Ratio 11.5% and Total Return Ratio 40% are highly conservative, and with high FCF generation there is considerable room to increase dividends and buybacks.
Monitoring regional/customer concentration and cyclical sensitivity is important. High concentration—Asia revenue ratio 91.8% and TestSystem revenue share 90.3%—drives short-term growth but introduces significant volatility in downside cycles due to geopolitical risk and semiconductor capex cycles. Key metrics to watch include order trends, book-to-bill, quarterly trends in inventory and receivables turnover, and FX sensitivity to confirm sustainability of performance and cash generation. Operational catalysts such as the Advantest Innovation Center ramp-up and participation in Applied Materials EPIC are notable for medium-to-long-term competitive advantage expansion.
This report is an earnings analysis document automatically generated by AI integrating XBRL financial statement data and PDF earnings presentation materials. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your own responsibility; consult a professional advisor as necessary.