FY2027/3 Q1 delivered substantial revenue and profit growth, but the focus is now on assessing sustainability through the first half

Revenue in FY2027/3 Q1 was ¥732,388 million, operating profit was ¥211,407 million, ordinary profit was ¥215,626 million, and net income attributable to owners of the parent was ¥164,341 million. Compared with revenue of ¥549,586 million and operating profit of ¥144,694 million in the year-earlier quarter, revenue increased 33.3% and operating profit increased 46.1%, with operating profit growth exceeding revenue growth. The Q1 operating margin was 28.9%, approximately 2.5 percentage points above 26.3% in the year-earlier quarter.

The next focus is whether the strong growth in Q1 will continue through the first half. In the first half of FY2026/3, revenue was ¥1,179,668 million and operating profit was ¥303,153 million. Starting from the FY2027/3 Q1 results, first-half results would exceed the year-earlier period if Q2 alone delivers revenue of ¥447,280 million and operating profit of ¥91,746 million. The key criterion for assessing the quality of first-half performance will be not merely whether it exceeds the prior-year level, but whether the profit margin is maintained in Q2.

The company explained that demand for AI servers for data centers was driving growth across the semiconductor market and that capital investment in semiconductors for generative AI applications had grown markedly, while Chinese capital investment showed signs of a pause. The FY2027/3 Q1 figures are consistent with the strength of this market environment, but the information currently available does not show how much of the ¥182,802 million increase in Q1 revenue was contributed by AI servers, memory, advanced logic, and demand by region.

At the interim results announcement, the Q1 levels of ¥732,388 million in revenue and ¥211,407 million in operating profit should not simply be extrapolated. Progress in Q2 shipments and installations, the timing of customer investment, and changes in China-related demand should be reviewed. In particular, if Q2 operating profit falls below ¥91,746 million, the company may not be able to maintain year-on-year operating profit growth on a cumulative first-half basis. Conversely, if both revenue and operating profit exceed the prior-year first-half levels and the operating margin remains in the 28% range, this would support the view that the decline in profitability in FY2026/3 was temporary.