Kokusai Electric Corporation · TSE:6525
Kokusai Electric — Q2 2026 Earnings Presentation
31 slides from Kokusai Electric's earnings presentation, Nov 11, 2025
Slide 1: Financial Briefings for the Second Quarter of the Fiscal Year Ending March 2026
KOKUSAI ELECTRIC Financial Briefings for the Second Quarter of the Fiscal Year Ending March 2026 (April to September 2025) November 11, 2025 KOKUSAI ELECTRIC CORPORATION
Slide 2: Q2 results overview
First, starting with an overview of the Q2 results, page four carries the highlights. Since both sales and revenue and all profit figures for H1 of the fiscal year exceeded our previous forecast, we have today announced the difference between forecasted and actual figures for H1 interim period of th
Slide 3: Consolidated earnings summary
Page five shows the consolidated earnings summary for Q2 and the cumulative Q2. For Q2, July to September, both revenue and profit increased compared to the same period last year, as well as the most recent previous quarter. For Q1, sales increased YoY, while profits decreased due to changes in prod
Slide 4: YoY factors for revenue and operating profit
Page six details the YoY factors affecting revenue and adjusted operating profit for Q2. Compared to the same period last year, Q2 saw growth, primarily in equipment sales to local Chinese manufacturers as well as service revenue, resulting in an overall revenue increase of 33% YoY. We will explain
Slide 5: YoY factors for cumulative results
Page seven shows the YoY factors affecting the cumulative results for Q2. Overall revenue increased by 2% YoY for H1 since service revenues grew, while equipment sales to local Chinese manufacturers decreased. Equipment sales to manufacturers worldwide saw declines in logic/foundry equipment and oth
Slide 6: Sales breakdown by business segment
Page eight shows the quarterly sales breakdown by business segment. In Q2, both equipment sales and service sales increased compared to the same period last year, as well as the most recent previous quarter. For the cumulative Q2, upgrades and modifications in the service business increased, replaci
Slide 7: Sales by application
Page nine shows sales by application for the 300-millimeter equipment that constitutes the equipment business and the 200-millimeter and smaller legacy equipment included in the service business. For both Q2 and H1 of the fiscal year, sales for NAND and logic/foundry applications decreased YoY. On t
Slide 8: Sales revenue by destination
Page 10 shows sales revenue by destination. In Q2, sales to South Korea and China increased YoY. For the cumulative Q2, sales to South Korea and Taiwan increased, while the sales ratio for the US decreased to 3% and the sales ratio for China decreased to 47%. 7
Slide 9: Sales revenue by application
Page 11 shows sales revenue by application, divided into sales to global manufacturers and sales to local Chinese manufacturers. The global manufacturers in Q2, driven by aggressive investment by device manufacturers, equipment sales for NAND and DRAM, along with service upgrades and modifications,
Slide 10: Quarterly balance sheet trends
Page 12 shows the quarterly balance sheet trends. Total assets at the end of Q2 increased by JPY1.8 billion compared to the end of March 2025, owing to an increase in inventories and tangible fixed assets despite a decline in operating credit and other credits. Total equity increased by JPY12.1 bill
Slide 11: Key management indicators
Page 13 shows key management indicators from the quarterly balance sheet. The equity capital ratio increased by 2.5 percentage points from the end of the previous quarter to 60.7%. Net debt was largely in line with plan at JPY10.6 billion. 10
Slide 12: Quarterly cash flow
Page 14 shows quarterly cash flow. In Q2, operating cash flow inflows exceeded investment cash flow inflows, resulting in free cash flow inflows of JPY7.1 billion. Cash flow from financing activities resulted in outflows of JPY6.4 billion, primarily due to repayments of borrowings. 11
Slide 13: R&D, capex and depreciation
Page 15 shows quarterly R&D expenses, capital expenditures, and depreciation and amortization. R&D expenses progressed as planned for Q2 at JPY4.8 billion, with the R&D expense ratio to revenue at 7.4%. The forecast for March 2026 R&D expenses remains unchanged at approximately JPY18 billion, a 20%
Slide 14: Consolidated Earnings and Dividend Forecast for FY26/3
{4 Consolidated Earnings and Dividend Forecast for FY26/3 KOKUSAI ELECTRIC XORUsA ELEC CORPORATION adits Atte rosary Copyright © KOKUSA! ELECTRIC Corporation 2025. lights reserved 13
Slide 15: Full-year earnings forecast and dividend forecast
Next, I will explain the full-year earnings forecast and dividend forecast for the fiscal year ending March 2026. Page 17 shows the highlights. As sales in each profit category for the fiscal year ending March 2026 are now expected to fall below the previous forecast, we have revised our full-year e
Slide 16: Revision of full-year earnings forecast
Please turn to page 18. Sales revenue has been reduced by 6% and adjusted operating profit by 20% compared to the previous forecast since sales of certain equipment anticipated for H2 are now expected to be delayed into the fiscal year ending March 2027. Sales are expected to be delayed due to equip
Slide 17: Forecast factors versus previous forecast
Page 19 compares the current earnings forecast with the previous forecast and summarizes the factors contributing to the increase or decrease. Regarding revenue, compared to initial expectations, shifts occurred between equipment sales and upgrade modifications, as well as varying strengths across a
Slide 18: Global and Chinese manufacturer forecast
Page 20 shows the breakdown of sales between global manufacturers and local Chinese manufacturers, comparing the previous forecast with the current forecast. The left side shows sales to global manufacturers where equipment sales were reduced by JPY36 billion compared to the previous forecast, while
Slide 19: Sales revenue by business segment
Page 21 shows sales to global manufacturers and sales to Chinese domestic manufacturers in chronological order from the fiscal year ending March 2023 to the revised forecast for the fiscal year ending March 2026. Sales to manufacturers worldwide have been on an upward trend since bottoming out in th
Slide 20: Install revenue by application
Page 22 shows sales revenue by business segment. Due to the revision of our forecast, some new equipment orders will be replaced by upgrade and modification projects within our services businesses. Consequently, for the fiscal year ending March 2026, equipment sales are projected to decrease by 15%
Slide 21: Revenue by destination
Page 23 shows install revenue by application combining, sales to global manufacturers and local Chinese manufacturers. For NAND, while we have lowered our forecast this time, it is expected to double compared to the previous fiscal year. For DRAM, sales are expected to decrease by 45% compared to th
Slide 22: Future Outlook
Page 24 shows revenue by destination. Compared to the previous year, the sales mix to Japan, Korea, and other Asia is expected to increase, while the mix to China, US, and Taiwan are expected to decrease. Regarding tariff policies, our contracts are generally based on delivery at airports or ports n
Slide 23: March 2027 outlook
¢ Future Outlook KOKUSAI ELECTRIC ORUSAIELECTRICCORPORATION and its After Copyright © KOKUSAI ELECTRIC Corporation 2025. Al 22
Slide 24: Business environment
Please turn to page 26. First, based on the revision of the March 2026 earnings forecast, I will explain the sense of the course for March 2027. Let me begin with the business environment surrounding our company. We had expected WFE in 2025 to be flat YoY, but considering the recovery of the Chinese
Slide 25: Business environment and situation by application
Page 27 shows the outlook for the business environment. In the semiconductor device market, generative AI demand is expected to continue driving capital investment by device manufacturers. For high-performance DRAM and logic/foundry, active investment for generational shifts and production capacity
Slide 26: Product composition transition
Page 28 summarizes the business environment and our situation by application. First, regarding NAND, at the time of the Q1 results announcement, we stated that demand from Chinese manufacturers was stronger than expected, while demand from non-China was weaker than expected. In Q2, the concerns beca
Slide 27: Roadmap, catalysts and growth potential
Page 29 shows the transition of product composition. With March 2024 being at the bottom, the mix of high-value-added products, such as batch ALD-compatible equipment and single-wafer treatment equipment, has started to increase. In March 2026, sales of mini-batch equipment are increasing in line wi
Slide 28: Roadmap, catalysts and growth potential
Page 30 is our usual material summarizing the semiconductor device development road map, our catalysts, and growth potential. There are no changes to our medium- to long-term strategies and goals. Our view that the timing for achieving the medium-term target will be when WFE reaches USD120 billion a
Slide 29: Largest shareholder update
Please turn to page 31. Applied Materials, which had been our largest shareholder, sold part of its shares in our company to institutional investors through a securities firm on October 8, reducing its ownership ratio from about 15% to about 10%. As a result, KKR, which holds about 11% of our outsta
Slide 30: Management and business activities in H1
Page 32 shows the topics of management and business activities in H1. In September 2025, we signed a joint development agreement with ASMPT of Singapore regarding semiconductor packaging technology. We are not yet at the stage to present specific goals or results. But by combining our advanced thin
Slide 31: ESG initiatives in H1
Finally, page 33 summarizes the ESG initiatives in H1. In July 2025, we received the highest rating in CDP's 2024 Supplier Engagement Assessment. In the supplier engagement assessment, this evaluates companies' efforts to address climate change issues in their supply chains. Our company has been eng