FUJI CORPORATION Q2 FY2026 earnings call

Consolidated Interim Overall Performance

• Total consolidated revenue hit a record high 79.542 billion yen, up 26.3% YoY, driven by recovery of the mounter market centered in Asia. Operating profit reached 9.591 billion yen, up 30.93 billion yen YoY, with orders of 86.759 billion yen up 71.7% YoY; orders have exceeded 40 billion yen per quarter since Q4 FY2025.
• Profit increase drivers: +7.054 billion yen from higher sales volume, with limited operating leverage gains from simultaneous production of NXT and NXTR. Negative factors include -2.059 billion yen from higher manufacturing fixed costs (mainly wage increases), -1.623 billion yen from selling price pressure (driven by higher share of China and other Asia sales amid weak European and U.S. recovery), and -0.657 billion yen from higher SG&A (driven by increased R&D spending and wage hikes).

Operational Shifts

• Production base diversification across Asia is accelerating, with demand shifting from China to other Asian markets including Vietnam and Thailand.
• The product transition from NXT to NXTR has entered full swing, and this trend is expected to continue going forward.
• FASFord Technology's memory-related die bonder sales are growing amid recovering memory demand.
• The machine tool business has maintained stable profit through structural reforms including organizational restructuring, and will continue focusing on profit protection amid a cautious demand environment.

Capital Structure and Dividend Policy

• Assets and liabilities increased mainly due to higher receivables and payables from increased sales volume, with net equity up 3.764 billion yen driven by higher retained earnings.
• Interim dividend is fixed at 40 yen per share; the current planned year-end dividend is 40 yen per share, with final dividend to be determined based on the policy of 50%+ payout ratio and minimum annual dividend of 80 yen per share.

1. Robot Solution Segment: Orders of 81.391 billion yen (up 81.5% YoY), revenue of 73.477 billion yen (up 29.7% YoY), and operating profit of 11.598 billion yen (up 45.3% YoY). This segment accounts for 92.4% of total consolidated revenue. By region, compared to Q1, China's revenue share decreased 9 percentage points while other Asia increased 6 percentage points, driven by production diversification expansion centered in Vietnam and Thailand. By industry, communications and smartphone-linked semiconductor demand softened, while server (mostly AI server) and server power supply-related demand grew strongly, with FASFord Technology's NAND/DRAM-related business also seeing growth. By model, the new NXTR model accounted for 30% of revenue, surpassing the legacy NXT model at 22%, marking full-scale transition to the new model. 2. Machine Tool Segment: Orders of 4.265 billion yen, revenue of 5.205 billion yen, both slightly down YoY, with operating profit of 0.216 billion yen flat YoY. This segment accounts for 6.5% of total consolidated revenue. By region, Japan and China saw steady automotive-related capital investment, while U.S. revenue fell due to cautious customer investment from tariff policy impacts.

• Management upward revised full-year consolidated guidance to reflect sustained strong capital investment demand for computer and server-related equipment across Asia (centered on Vietnam and Thailand):
  • Full-year orders are raised by 17 billion yen, full-year revenue is raised by 12 billion yen, and full-year operating profit is raised by 4 billion yen. Full-year recurring profit and net profit attributable to parent shareholders were also upward revised.
  • All guidance increases come from the Robot Solution segment, per the segment breakdown.
• Management expects server-related demand, centered in other Asian markets (primarily Thailand), to be the main driver of growth in the second half, with steady residual demand from automotive and smartphone segments supporting overall dispersed demand growth.

• Demand in Europe, North America, and Japan remains weak across all industries, with no clear recovery in sight.
• Server demand scale and timing varies greatly by manufacturer and region, making it difficult to predict how long the current strong demand trend will continue.
• Sustained wage increases have pushed up fixed manufacturing and SG&A costs, putting pressure on profitability.
• Higher share of sales in China and other Asia has created continued selling price pressure that negatively impacts profit margins.
• U.S. tariff policy continues to create uncertainty for machine tool customer investment decisions.
• EV investment in China has softened, and automotive demand in Europe and the U.S. remains weak.

Q: Has AI server-related demand grown suddenly since the last August earnings release, and what other AI-linked demand beyond power supplies do you see? / A: FUJI did not expect the current large scale of AI server demand back in August, though it already saw positive momentum from its mounters meeting AI server technical requirements and having all required optional units ready. Large-scale orders materializing all at once is a very recent development. It is often hard to identify if non-power supply orders are AI server-related, but management is confident in the large size of the overall server market and expects continued strength in H2.

Q: Why is the operating profit increase smaller than implied by the 12 billion yen revenue upward revision, based on the company's margin profile? / A: The H2 revenue growth will be driven almost entirely by China and other Asia, while European and U.S. demand (which carries higher margins) is not expected to recover. Higher-margin Western demand is not contributing to the upward revision, leading to a lower aggregate margin on incremental revenue that explains the smaller profit increase.

Q: What explains the narrowing of selling price decline in Q2 compared to Q1? / A: The narrowing of negative selling price impact comes mostly from model mix changes: Q2 saw a large increase in sales of the new NXTR model, which has updated, higher selling prices compared to the legacy NXT model, which reduced the overall rate of selling price decline. This aligns with the ongoing full-scale transition from NXT to NXTR.

Q: What changes to the competitive landscape allowed FUJI to win large server market share recently? / A: The main driver is the NXTR model, which delivers major performance and functional improvements that make it easy to propose to customers across all industries. Combined with the strong trust FUJI built with customers from its historical strength in smartphones, this has balanced out FUJI's customer portfolio that was previously heavily skewed to smartphones. This combination is the core reason for the recent increase in large server orders.