Sysmex Q1 FY2027: Sales surge 24% but China slowdown persists

Sysmex released consolidated results for the first quarter of FY2027 (April-June 2026) on August 7, 2026. Revenue climbed 23.6% year on year to 130,674 million yen, operating profit rose 39.5% to 14,821 million yen, and net income attributable to owners of the parent jumped 90.9% to 8,691 million yen. Strong overseas operations and the contribution from a domestic acquisition drove the broad-based improvement.

Growth was led by the core hematology business, with instruments, reagents, and service revenue expanding overseas, supported by a weaker yen. In Japan, the start of operations at Sysmex BioMajesty, acquired from JEOL Ltd., added clinical chemistry and pushed domestic sales up 57.9%. China was the only region to shrink, as hospital investment controls and price competition hit coagulation and hematology instrument sales.

On the profit side, higher revenue and a lower cost of sales ratio lifted the operating margin to 11.3% from 10.0% a year earlier. Selling, general and administrative expenses rose 11.3%, and R&D expenses rose 12.5%, but top-line growth absorbed the increase. Pretax profit climbed 79.2% to 14,110 million yen, and net income attributable to owners of the parent climbed 90.9% to 8,691 million yen.

Sysmex reports five regional segments: Japan/Korea, Americas, EMEA, China, and Asia Pacific. First-quarter revenue from external customers and segment profit (operating profit) are shown below.

Japan/Korea benefited from the clinical chemistry business of Sysmex BioMajesty in Japan, plus hematology reagent and service growth in South Korea. Segment profit soared 189.1%.

In the Americas, hematology instruments and reagents grew in North America and Latin America, and urinalysis reagents expanded in Latin America; higher revenue and a better cost of sales ratio pushed segment profit up 223.7%. EMEA saw growth in hematology, coagulation, and urinalysis instruments and reagents across Europe, lifting segment profit 63.7% on stronger gross profit.

China was the clear laggard. Coagulation instruments, reagents, and service revenue all declined, as did hematology instruments, sending revenue down 22.6% and segment profit down 42.9%. Sysmex attributes the weakness to hospital capital expenditure restraint and fiercer price competition. Asia Pacific revenue grew, led by hematology and coagulation reagents in India, but a higher cost of sales ratio and increased SG&A pushed segment profit down 31.0%.

Total assets at the end of the first quarter stood at 746,637 million yen, up 39,105 million yen from the prior fiscal year-end. Cash and cash equivalents increased by 29,517 million yen to 113,634 million yen, and inventories rose by 11,221 million yen. Liabilities increased by 58,599 million yen to 260,455 million yen, mainly due to a 49,821 million yen increase in long-term borrowings. Total equity fell by 19,494 million yen to 486,181 million yen, and the parent company ownership ratio declined to 65.0% from 71.4%.

Operating cash flow came to 35,595 million yen, a significant improvement from 9,492 million yen a year earlier, helped by higher pretax profit, lower trade receivables, and higher accrued expenses. Investing activities used 18,595 million yen, including spending on property, plant and equipment and intangible assets, and 7,838 million yen for the acquisition of Sysmex BioMajesty. Financing activities generated 12,032 million yen, with 50,000 million yen in long-term borrowings partly offset by share buybacks of 22,883 million yen and dividend payments of 11,808 million yen.

Sysmex plans to raise the annual dividend to 40.00 yen from 38.00 yen, with 20.00 yen for the interim and 20.00 yen for the year-end. Large-scale share buybacks continued in the first quarter, alongside the previous fiscal year, underscoring a stronger shareholder return stance.

Sysmex has revised its consolidated full-year forecast for FY2027, flagging that there is a revision from the latest published figures. The strong first quarter likely prompted an upward revision, with details set out in a separate release. The latest forecast calls for revenue of 545,000 million yen, operating profit of 60,000 million yen, and net income attributable to owners of the parent of 37,000 million yen. This compares with prior-year results of 500,000 million yen revenue, 51,818 million yen operating profit, and 35,450 million yen net income, implying growth of 9.0%, 15.8%, and 4.4%, respectively.

For the first half (cumulative through September), Sysmex forecasts revenue of 265,000 million yen (up 14.0% year on year), operating profit of 25,000 million yen (down 24.1%), and net income attributable to owners of the parent of 15,000 million yen (down 21.1%). The relatively conservative first-half outlook likely reflects expectations that temporary foreign exchange gains and acquisition effects concentrated in Q1 will partly reverse. Sysmex still expects to maintain a full-year growth trajectory.

The standout event in Q1 was the start of operations at Sysmex BioMajesty, acquired from JEOL Ltd. The deal marks Sysmex's full-scale entry into clinical chemistry and contributed to the sharp rise in domestic revenue. The acquisition involved 7,838 million yen in investing cash outflow, but the business is already supporting results.

R&D spending rose 12.5% year on year to 7,211 million yen, as Sysmex continues investing for future growth. In the in-vitro diagnostics market, expansion beyond hematology and the provision of digital solution offerings are increasingly important. Sysmex is strengthening its position through both acquisitions and internal development.

Key risks and challenges for Sysmex include:

• China slowdown: China segment revenue fell 22.6% and segment profit fell 42.9%. If China's healthcare cost containment and economic slowdown persist, Sysmex's performance could be materially affected.
• Currency volatility: Overseas markets account for 86.7% of revenue. A stronger yen would reduce the yen value of foreign currency revenue and profit. Q1 benefited from a weaker yen, but this tailwind could reverse.
• M&A integration risk: As Sysmex integrates Sysmex BioMajesty, there are risks of goodwill and intangible asset impairment and rising integration costs.
• Intensifying competition: The in-vitro diagnostics market is highly competitive, and local players and price pressure in emerging markets could squeeze margins.
• Higher financial leverage: Long-term borrowings increased substantially to fund share buybacks and M&A, lowering the parent company ownership ratio to 65.0%. Higher interest rates or weaker cash flow could expose financial risk.