FY2027-Q1 rebounds sharply as inventory adjustments run their course; FY2027-H1 will test whether the recovery is sustainable

Cumulative revenue for the first three quarters of FY2026 was ¥158,378 million, down 0.9% year on year, while operating profit was ¥4,879 million, down 14.9%. For the full year, revenue was ¥227,511 million, up 3.4%, and operating profit was ¥7,511 million, down 8.7%. By contrast, FY2027-Q1 revenue was ¥57,753 million, operating profit was ¥2,194 million, ordinary profit was ¥2,633 million, and net profit attributable to owners of the parent was ¥1,899 million, with the recovery in profit items far outpacing the increase in revenue.

The company attributes the improvement to the largely completed, prolonged inventory adjustment by customers, growing demand for semiconductor memory and higher product prices, capital investment demand related to data centers and AI facilities, higher sales volumes, and the completion of inventory optimization that had depressed profit in the previous year. The FY2027 full-year forecasts are revenue of ¥255,000 million, operating profit of ¥9,500 million, ordinary profit of ¥9,900 million and net profit of ¥7,000 million. Q1 progress against these forecasts was 22.6%, 23.1%, 26.6% and 27.1%, respectively.

A simple six-month progression would imply revenue of ¥127,500 million and operating profit of ¥4,750 million. However, the company has not disclosed interim earnings forecasts or seasonality, so these are merely mechanical benchmarks rather than company targets. At the next results, we will look for confirmation that the sharp Q1 recovery continued into Q2 and that margins were maintained, as well as whether the full-year forecasts of ¥255,000 million in revenue and ¥9,500 million in operating profit will be maintained or raised.

The improvement in profit was also reflected in the Q1 operating margin of approximately 3.8%, up about 1.7 percentage points from approximately 2.1% in the same period of the previous year. Meanwhile, operating cash flow for FY2026 was ¥7,873 million, a substantial decrease from ¥16,462 million in the previous fiscal year. As the company did not prepare a quarterly cash flow statement for Q1, the extent to which working capital improvements were converted into cash cannot be confirmed, making interim balances for inventories, trade receivables and trade payables, together with operating cash flow, important indicators.