| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue | ¥8578.3B | ¥7971.3B | +7.6% |
| Operating Income | ¥1837.6B | ¥1588.5B | +15.7% |
| Ordinary Income | ¥2274.8B | ¥1967.4B | +15.6% |
| Net Income | ¥1604.8B | ¥1274.0B | +26.0% |
| ROE | 8.5% | 7.3% | - |
The cumulative results for FY2026 Q2 showed Revenue ¥8,578.3B (YoY +¥607.0B +7.6%), Operating Income ¥1,837.6B (YoY +¥249.1B +15.7%), Ordinary Income ¥2,274.8B (YoY +¥307.4B +15.6%), and Net Income attributable to owners of the parent ¥1,665.4B (YoY +¥191.4B +26.0%), achieving two consecutive periods of higher revenue and profit. Operating margin improved to 21.4% (up +1.5pt from 19.9% a year earlier), and net margin improved to 19.4% (up +0.9pt from 18.5%), indicating steady profitability improvement. By product, Robots ¥3,786.1B (composition 44.1%) performed well in the Americas and China; FA ¥2,084.8B (24.3%) was strong in China; Services ¥1,411.4B (16.5%) contributed stable revenue due to increased cumulative installed base. By region, Asia ¥3,526.0B (41.1%) and the Americas ¥2,321.5B (27.1%) led growth. Gross margin was 38.3% (up +1.3pt from 37.0%), SG&A ratio 16.9% (down ▲0.2pt from 17.1%)—declining cost ratios and SG&A control produced operating leverage. Operating Cash Flow was ¥2,509.0B (1.51x Net Income), Free Cash Flow ¥1,944.6B, indicating high quality of earnings; ROE 8.5% remained in a stable range versus 8.6% last year.
[Revenue] Revenue was ¥8,578.3B (+7.6%), a record high. By region, Asia ¥3,526.0B (41.1%) was strong centered on China; the Americas ¥2,321.5B (27.1%) showed high growth at +10.8% driven by robot demand; Europe ¥1,523.7B (17.8%); Japan ¥1,107.8B (12.9%), indicating an externally driven growth structure. By product, Robots ¥3,786.1B (44.1%) led with +14.9% YoY, driven by expanded sales of AI-equipped and collaborative robots and continued automation investment in the Americas. FA ¥2,084.8B (24.3%) was +7.0%, with favorable adoption of process consolidation and automation functions in China. Services ¥1,411.4B (16.5%) was +4.4%, securing stable revenue from an increasing cumulative installed base. Robomachines ¥1,296.0B (15.1%) declined ▲5.8% due to demand cycle fluctuations. Gross profit was ¥3,284.7B with gross margin 38.3% (up +1.3pt from 37.0%); cost of sales ratio was 61.7% (down ▲1.3pt from 63.0%), aided by cost reductions and improved product mix (higher share of Robots and Services).
[Profitability] Operating Income was ¥1,837.6B (+15.7%), improving operating margin to 21.4% (up +1.5pt from 19.9%). In addition to the +1.3pt expansion in gross margin, SG&A was ¥1,447.0B (SG&A ratio 16.9%, down ▲0.2pt from 17.1%) and rose +6.3%, below revenue growth of +7.6%, producing operating leverage. Non-operating income was ¥475.5B (5.5% of revenue), mainly equity-method investment income ¥305.3B, interest received ¥75.4B, and dividend income ¥33.7B; non-operating expenses were minor at ¥38.3B. Ordinary Income ¥2,274.8B (+15.6%) increased with steady contribution from non-operating income. Extraordinary items were limited to ¥9.1B of fixed asset disposal/write-off losses. Pre-tax profit ¥2,274.8B incurred income taxes of ¥580.9B (effective tax rate 25.5%); after deducting non-controlling interests ¥28.5B, Net Income attributable to owners of the parent was ¥1,665.4B (+26.0%), with net margin 19.4% (up +0.9pt from 18.5%), reflecting a high-profit structure. Comprehensive income ¥2,395.3B (Net Income +45.4%) was driven by translation adjustments +¥434.5B, valuation differences on available-for-sale securities +¥140.2B, and retirement benefit adjustments +¥90.0B, reflecting valuation gains on foreign currency-denominated assets and strong financial assets. In conclusion, revenue and profit increased through price maintenance, mix improvement, cost reductions, and SG&A control.
Segments are disclosed by product: FA, Robots, Robomachines, and Services. Revenue by segment: Robots ¥3,786.1B (44.1%) was the largest, followed by FA ¥2,084.8B (24.3%), Services ¥1,411.4B (16.5%), and Robomachines ¥1,296.0B (15.1%). The Robots segment led overall revenue growth with +14.9% YoY, growing +34.8% in the Americas and performing well in China, driven by expanded sales of AI-equipped and collaborative robots. FA was +7.0%, with stable growth supported by demand for process consolidation and automation in China. Services was +4.4%, with increasing cumulative installed base improving revenue quality. Robomachines fell ▲5.8%, with a sharp decline in Asia (excluding China) due to demand cycles. The rising share of Robots— the largest component—was the primary driver of revenue growth, while stable Services revenue supported overall performance. Segment-level margins are not disclosed, but the increased Robots share contributed to overall gross margin improvement.
Profitability: ROE 8.5% (prior year 8.6%), Operating Margin 21.4% (prior year 19.9%, +1.5pt), Net Margin 19.4% (prior year 18.5%, +0.9pt). Gross Margin 38.3% (prior year 37.0%, +1.3pt), SG&A Ratio 16.9% (prior year 17.1%, ▲0.2pt). Cash quality: Operating Cash Flow ¥2,509.0B equals 1.51x Net Income ¥1,665.4B, indicating strong cash backing of earnings; OCF/EBITDA 1.08x, accrual ratio ▲4.0%—healthy. Free Cash Flow ¥1,944.6B (Operating CF ¥2,509.0B ▲ CapEx ¥211.8B) sufficiently covers dividends ¥944.6B and share buybacks ¥5.5B, FCF coverage 1.85x. Investment efficiency: CapEx/Depreciation 0.44x (CapEx ¥211.8B / Depreciation ¥477.8B), indicating a period of investment restraint; CapEx ratio 2.5% (CapEx / Revenue). Financial solidity: Equity Ratio 90.1% (prior year 89.8%), Current Ratio 689.3%, Quick Ratio 617.6%, Debt-to-Equity 0.11x—extremely strong. Cash and deposits ¥7,180.7B exceed current liabilities ¥1,794.6B by more than 4.0x, implying low short-term maturity mismatch. Working capital efficiency: DSO 63 days, DIO over 200 days, CCC 233 days, extended from prior year; improving inventory and receivables efficiency is a challenge. Interest burden factor 1.238 reflects interest income contribution from net cash.
Operating CF ¥2,509.0B (YoY ▲1.7%) is 1.51x Net Income ¥1,665.4B, indicating high cash generation. From an operating CF subtotal of ¥2,592.4B, working capital changes included inventory decrease +¥278.7B (cash in), accounts payable increase +¥54.7B, and trade receivables ▲¥6.6B (roughly flat); corporate taxes paid ▲¥460.9B. Interest and dividends received +¥343.2B supplemented non-operating income. Investing CF was ▲¥564.4B, led by CapEx ▲¥211.8B; with depreciation ¥477.8B, CapEx/Depreciation 0.44x, supporting abundant short-term FCF. Financing CF was ▲¥986.0B, mainly dividend payments ▲¥944.6B and share buybacks ▲¥5.5B. Free Cash Flow ¥1,944.6B sufficiently covered dividends and buybacks totaling ¥950.1B, FCF coverage 1.85x. Cash generation is assessed as strong. Over the medium term, continued CapEx restraint could limit investment refresh and capacity expansion, constraining growth potential.
The gap between Ordinary Income ¥2,274.8B and Net Income ¥1,665.4B reflects tax burden (effective tax rate 25.5%) and non-controlling interests ¥28.5B, primarily structural factors. Non-operating income ¥475.5B (5.5% of revenue) comprises equity-method investment income ¥305.3B (16.6% of Operating Income), interest received ¥75.4B, and dividend income ¥33.7B, indicating contributions from financial income and affiliates. Extraordinary items were minor (only ¥9.1B of fixed asset disposal/write-off losses), so one-off impacts were limited. Operating CF exceeded Net Income by 1.51x and the accrual ratio was ▲4.0%, indicating high quality of earnings. Comprehensive income ¥2,395.3B (Net Income +45.4%) included translation adjustments +¥434.5B, valuation differences on securities +¥140.2B, and retirement benefit adjustments +¥90.0B, reflecting valuation gains on foreign-currency assets and strong financial assets. Recurring earnings are composed of core operations plus equity-method investment and financial income, with limited contribution from one-time items.
Full-year guidance: Revenue ¥9,096.0B (+6.0%), Operating Income ¥2,122.0B (+15.5%), Ordinary Income ¥2,570.0B (+13.0%), Net Income ¥1,849.0B (+11.0%), EPS ¥198.14. The cumulative progress through Q2 is Revenue 94.3% and Operating Income 86.6%, significantly exceeding the standard progress (50%), with Revenue and Operating Income at 94.3% and 86.6% of the full-year plan respectively. The progress rate exceeds the standard by +36.6pt, mainly due to strong demand through Q2 and accelerated improvement in gross margin. For the full year, an Operating Margin of 23.3% is expected (vs. 21.4% this period, +1.9pt improvement), assuming continued cost reductions and SG&A control. FX assumptions are USD ¥150 and EUR ¥170, a yen appreciation scenario versus prior actuals USD ¥150.77 and EUR ¥174.79. Payout ratio will be maintained at 60.0%, with FY2025 dividend planned at ¥107.09 per share. Expansion of robot production capacity will be driven by the completion of the Central Technical Center and a $90 million investment in the U.S. (approx. ¥143B), and service facility construction in India will strengthen the growth foundation. No earnings revisions at this time; progress is proceeding ahead of plan.
Annual dividend ¥107.09 per share, year-end forecast ¥55.76, interim actual ¥51.33. Payout ratio is 63.2% (total dividends ¥944.6B / Net Income ¥1,665.4B), with DOE approximately 5.2%, reflecting capital efficiency. Free Cash Flow ¥1,944.6B covers dividends ¥944.6B and share buybacks ¥5.5B (total ¥950.1B) by 1.85x, and cash ¥7,180.7B with D/E 0.11x supports sustainability of returns. Share buybacks were limited at ¥5.5B, making total return primarily dividend-focused. The policy is to maintain a 60% payout ratio, leaving room for dividend increases tied to profit growth. With a net-cash-rich balance sheet, management aims to balance reinvestment acceleration and stable dividend policy.
[Short-term] Order trends in FY2026 Q4, continuity of robot demand in China and the Americas, progress in inventory reduction and pace of CCC shortening, FX volatility (USD/EUR) impact on revenue and profit, and effectiveness of AI-equipped robots and high-precision CNC features showcased at TMTS 2026 and SIMTOS 2026.
[Long-term] Completion of U.S. Michigan $90 million investment to expand robot production capacity (from 2027 onward), operation of new service facility in Bangalore to strengthen service capabilities, full operation of the Central Technical Center to expand customer touchpoints, penetration of process consolidation and automation solutions using AI and digital twin technologies, stable growth of service revenue from increasing cumulative installed base, continued contribution from equity-method investment income and deeper collaboration with partner companies.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 21.4% | 7.8% (4.6%–12.3%) | +13.7pt |
| Net Margin | 18.7% | 5.2% (2.3%–8.2%) | +13.5pt |
FANUC significantly exceeds the manufacturing median, ranking in the upper peer group on both operating and net margins.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 7.6% | 3.7% (-0.4%–9.3%) | +3.9pt |
Revenue growth also exceeds the industry median by +3.9pt, maintaining solid externally driven growth.
※ Source: Company compilation
Prolonged inventory days and deterioration in working capital efficiency: DIO over 200 days and CCC 233 days have lengthened year-over-year. Inventory obsolescence and valuation loss risk and production planning rigidity could pressure profitability. If inventory reduction stalls, margin compression may occur via discounting or additional storage costs.
Demand cycle volatility and regional order fluctuations: Robomachines declined ▲5.8% YoY, Asia (ex-China) ▲31.5%, demonstrating demand variability. Volatility in machine tool and electronics investment cycles and FX fluctuations (external demand ratio 87.1%) could cause order and revenue swings.
Growth constraints from prolonged investment restraint: CapEx/Depreciation 0.44x and CapEx ¥211.8B are materially below Depreciation ¥477.8B, indicating investment restraint. Postponing refresh and capacity expansion investments could lead to mid-term capacity shortages, yield declines, and erosion of technological edge, constraining competitiveness and profitability. U.S. and India investments partly mitigate this but raising company-wide investment levels remains a challenge.
Sustainability of high profitability/high growth and progress on inventory reduction: Operating Margin 21.4% (industry median +13.7pt), Net Margin 18.7% (industry median +13.5pt), Revenue Growth +7.6% (industry median +3.9pt) indicate top-tier profitability and growth, while DIO over 200 days and CCC 233-day lengthening pose margin-downside risk. Balancing inventory reduction with price maintenance is a key factor for next-year earnings quality.
Balance between operating leverage and reinvestment acceleration: Gross margin +1.3pt and SG&A ratio ▲0.2pt improvements produced operating leverage and two consecutive years of operating margin improvement. Investment restraint (CapEx/Depreciation 0.44x) boosts short-term FCF but carries mid-term risks to supply capacity and technological competitiveness. Monitor impact on margins from planned investments such as the U.S. $90 million and India service facility as CapEx ramps and depreciation increases.
External-demand-driven growth structure and FX sensitivity: Regional revenue external demand ratio 87.1% (Asia 41.1%, Americas 27.1%, Europe 17.8%) makes the company sensitive to FX and overseas investment cycles. FX assumptions USD ¥150 and EUR ¥170 are a modest yen appreciation scenario versus actuals USD ¥150.77 and EUR ¥174.79; monitor whether rising Robot share (44.1%→forecast 46.6%) and stable Service revenue provide a buffer against FX volatility.
This report is an AI-generated earnings analysis integrating XBRL financial statement data and PDF earnings presentation materials. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are compiled by our firm from public financial statements as reference information. Investment decisions are your responsibility; consult a professional if necessary before acting.