Horiba Q2 FY2026: Operating profit up 39% on AI chip demand, guidance raised

Horiba’s consolidated results for the first half of FY2026 (January–June) showed strong growth, led by robust AI and semiconductor demand. Revenue increased 20.8% year on year to 179,853 million yen, operating profit rose 39.3% to 30,488 million yen, and net profit attributable to owners of the parent climbed 37.5% to 21,806 million yen. The operating margin improved from 14.7% to 17.0%.

The standout performer was the Advanced Materials & Semiconductors segment, where sales to semiconductor equipment makers, especially in Asia, surged on the back of AI and data center investment. Segment revenue jumped 31.9% to 99,956 million yen and operating profit grew 33.9% to 30,176 million yen, accounting for nearly all of the company’s operating profit. Meanwhile, Energy & Environment posted modest growth, and Bio & Healthcare saw higher revenue but remained in the red due to ongoing R&D spending.

Following the strong first half, Horiba raised its full-year forecasts for FY2026: revenue is now seen at 382,000 million yen (up 14.7% from FY2025) and operating profit at 70,000 million yen (up 32.0%). The company also declared a 240 yen per share commemorative dividend to mark its market capitalization surpassing 1 trillion yen in May. Combined with a higher ordinary dividend, the total annual dividend is now projected at 790 yen per share, up sharply from 450 yen the previous year.

The company’s three reporting segments delivered contrasting results in H1:

Advanced Materials & Semiconductors dominated earnings, with revenue of 99,956 million yen, up 31.9% year on year, and operating profit of 30,176 million yen (+33.9%), yielding an operating margin of 30.2%. Demand for measurement equipment from semiconductor manufacturers, particularly in Asia, was strong across the board, driven by AI and data center buildouts. By region, Japan sales grew 32.7%, Asia 35.0%, the Americas 15.9%, and Europe 25.1%. Orders also remained healthy, and the segment is projected to deliver full-year revenue of 205,000 million yen, up 31.0% from the previous year.

Energy & Environment revenue edged up 7.5% to 58,383 million yen, supported by automotive-related combustion measurement instruments for hybrid vehicle development in Japan and Asia, but sluggish hydrogen-related markets weighed on European sales. Operating profit more than doubled to 1,079 million yen from 510 million yen a year earlier, though the segment’s margin remained thin at 1.8%. The full-year sales forecast is 134,000 million yen, roughly flat year on year.

Bio & Healthcare posted a 14.1% revenue increase to 21,513 million yen, helped by higher European hematology analyzer sales and a weaker yen. However, continuing R&D investment in life sciences resulted in an operating loss of 767 million yen, an improvement from the 1,147 million yen loss a year ago. For the full year, Horiba expects the segment to remain loss-making, forecasting a 500 million yen operating loss.

Total assets at end-June 2026 stood at 543,203 million yen, up 24,924 million yen from end-2025, mainly due to increases in buildings, cash, and work in progress. Liabilities rose 8,300 million yen to 177,939 million yen, while net assets grew 16,623 million yen to 365,264 million yen, buoyed by retained earnings and favorable currency translation adjustments. The equity ratio remained high at 67.1%.

Cash flow from operations came to 33,411 million yen, an increase of 3,546 million yen from the year-earlier period. Investing activities consumed 11,046 million yen on property, plant and equipment and a further 8,813 million yen on acquisitions, including new consolidated subsidiaries. Financing outflows of 20,443 million yen were mainly due to 15,527 million yen in dividend payments. Cash and equivalents ended the period at a comfortable 169,865 million yen.

On capital policy, Horiba targets a dividend payout ratio of around 30%, while flexibly considering special dividends and share buybacks based on investment opportunities and financial conditions. To commemorate crossing the 1 trillion yen market cap threshold, it announced a 240 yen per share celebratory dividend. Combined with a 60 yen hike in the ordinary dividend and a 190 yen special dividend (designated as recurring), the full-year dividend forecast has been raised to 790 yen per share, a 300 yen increase from the previous forecast of 490 yen and a 75.6% jump from FY2025’s 450 yen.

The company’s earnings release flags several risk factors that could affect future performance:

• Foreign exchange fluctuations: a high export ratio means a stronger yen (versus assumed rates of 155 per dollar and 180 per euro) would erode profits.
• Semiconductor market volatility: the current boom is fueled by AI-specific demand; a sudden slowdown or inventory adjustment could sharply impact the Advanced Materials & Semiconductors segment.
• R&D investment returns: Bio & Healthcare continues heavy investment in life sciences with uncertain timelines for revenue contribution.
• Geopolitical risks: global operations expose the company to trade friction and operational disruptions at overseas sites.
• Technological change: intensifying competition and obsolescence in the measurement equipment market.