Japan's NAND flash maker Kioxia topped 1 trillion yen in quarterly operating profit on the back of expanding demand from generative artificial intelligence (AI) data centers and rising NAND flash prices. However, both revenue and operating profit slightly missed market expectations.
Kioxia Holdings said on the 31st that revenue for the first quarter of fiscal 2026 (April–June) rose 415.5% from a year earlier to 1.7671 trillion yen (about 15.83 trillion won). Operating profit jumped about 28 times to 1.27 trillion yen (about 11.38 trillion won) from 44.9 billion yen a year earlier. Net income attributable to owners of the parent surged to 842.2 billion yen (about 7.55 trillion won) from 18.3 billion yen a year earlier.
Still, results fell slightly short of market expectations. Market estimates compiled by Bloomberg were 1.8356 trillion yen in revenue and 1.3701 trillion yen in operating profit. Actual revenue was 3.7% lower and operating profit was 7.3% lower than expected, respectively. Compared with the company's own guidance, revenue slightly exceeded the estimate (1.75 trillion yen), but operating profit fell short of the outlook (1.3 trillion yen).
Compared with the previous quarter, revenue increased 76.2% and operating profit rose 112.8%. Non-GAAP operating profit, excluding one-off factors, was tallied at 1.3262 trillion yen.
The improvement was driven by demand for enterprise storage devices stemming from increased investment in AI data centers. Kioxia said average selling prices (ASP) rose on solid demand from data center customers, and that higher NAND flash shipments and a weaker yen also contributed to better results.
By business institutional sector, "SSD and storage," which includes data center and enterprise, and PC solid-state drives (SSD), recorded revenue of 1.1747 trillion yen, up 957.3 billion yen from a year earlier. "Smart devices," including memory for smartphones and automobiles, also posted revenue of 525.7 billion yen, up 446.6 billion yen.
Expecting continued strength in AI data center demand, Kioxia forecast second-quarter (July–September) revenue of 2.39 trillion yen (about 21.41 trillion won) and operating profit of 1.89 trillion yen (about 16.93 trillion won). Those would be up 35.2% and 48.8%, respectively, from the first quarter. The company projected net income of 1.27 trillion yen.
Kioxia's improved results are expected to have a positive impact on major investor SK hynix. SK hynix invested in then-Toshiba Memory in 2018 through a consortium led by Bain Capital. As Kioxia's enterprise value rose, the value of SK hynix's investment assets increased as well, making Kioxia's earnings and share price factors that affect SK hynix's results.
Meanwhile, Kioxia's board of directors also approved a plan to split one common share into three shares, effective Oct. 1.