Disco operating profit rises to 116.639 billion yen as AI investment continues
Key Facts
Japan's Disco reported an increase in operating profit to 116.639 billion yen for the first half from April to September 2026, from 78.871 billion yen a year earlier, as investment in data centres linked to generative AI continued. Financial results released on 22 October showed consolidated revenue of 257.058 billion yen, compared with 194.537 billion yen in April to September 2025. Net profit attributable to owners of the parent rose to 80.366 billion yen from 55.913 billion yen a year earlier. Basic earnings per share were 740.84 yen, compared with 515.70 yen in the corresponding first half. The operating profit margin was 45.4% during the period, according to the company's statement. The results cover the first half of the fiscal year ending in March 2027, and the consolidated financial statements were prepared in accordance with accounting principles and practices generally accepted in Japan.
Disco linked its business performance to continued investment in data centres amid expanding demand for generative AI. In its explanation of the results, the company said demand for high-performance semiconductors remained strong, including advanced logic chips and high-bandwidth memory. Consolidated shipment value rose 37.2% year on year during April to September 2026, according to the official Japanese disclosure. On profitability, the company attributed the increase in its gross profit margin to currency effects and a rise in high-value-added products. Its explanation of performance said the improvement came "due to exchange-rate effects and an increase in high-value-added products, among other factors". It said the improvement absorbed increases in personnel and research and development costs during the first half.
In the cash flow statement, cash generated from operating activities rose to 111.708 billion yen during April to September 2026, according to the official results. Operating cash flow in the corresponding period a year earlier was 39.683 billion yen. Cash expenditure on purchases of property, plant and equipment fell to 12.896 billion yen in the current first half. That compares with spending of 14.907 billion yen on these purchases during April to September 2025. Cash and cash equivalents at the end of September 2026 stood at about 200.627 billion yen, according to the consolidated cash flow statement. The comparable balance at the end of September 2025 was 222.909 billion yen, leaving the closing balance below its year-earlier level despite higher operating cash flow during the period.
On shareholder returns, Disco approved an interim dividend of 186 yen per share for the first half ended in September 2026, according to its dividend announcement. In July, the company had forecast a dividend of 171 yen per share for the same period. The planned payout also exceeds the interim dividend of 129 yen per share for the first half ended in September 2025. Disco links its dividend policy to its financial performance, using consolidated net profit as the basis for determining the target amount for each half-year period. The company said in its announcement that "the dividend payout ratio is set at 25% of consolidated net profit for each half-year period". It set 1 December 2026 as the date to begin paying the planned interim dividend.
For the cumulative period from April to December 2026, Disco forecasts consolidated revenue of 389.5 billion yen, up 28.2% year on year, according to its official outlook. It estimates operating profit for the same period at about 174.7 billion yen, up 38.4% year on year. It also forecasts consolidated net profit of 121.9 billion yen, a year-on-year increase of 31.6% for April to December. The company forecast consolidated shipment value of 434.2 billion yen, representing year-on-year growth of 35.2% over the same period. Its assumptions for October to December 2026 are based on an exchange rate of 151 yen to the dollar, according to the Japanese disclosure. The investor calendar scheduled a meeting for 23 October 2026 at which management would explain the second-quarter results. The company scheduled the announcement of results for the third quarter, which ends in December 2026, for 28 January 2027.