Disco reported first-half individual sales of 213.6 billion yen, a 32.8% year-on-year increase. The result exceeded the company's recent execution forecast of 201.1 billion yen by 106.2%, driven by strong equipment demand for generative AI.
Disco disclosed its individual earnings update for the second quarter of the fiscal year ending March 2027, confirming first-half individual sales reached 213.6 billion yen. This represents a +32.8% growth rate compared to the previous year's 160.8 billion yen.
The company significantly outperformed its recently set execution forecast of 201.1 billion yen, achieving an execution rate of 106.2%. While sales are recognized upon acceptance (verification), shipment figures which better reflect market trends also showed robust growth. First-half shipments rose 41.1% year-on-year to 240.5 billion yen.
The second quarter (July-September) alone recorded shipments of 123.9 billion yen, marking a +60.0% year-on-year and +6.4% quarter-on-quarter increase. This single-quarter shipment volume set a new record high. Sales for the same quarter reached 118.5 billion yen, up +38.9% from the prior year.
Disco elected to disclose shipment figures alongside sales to demonstrate stronger correlation with market conditions. First-half shipments totaled 240.5 billion yen, a substantial increase from the previous year's 170.5 billion yen.
The standout performance was in the second quarter, which saw shipments jump +60.0% year-on-year and +6.4% quarter-on-quarter. Management attributes this to steady demand for precision processing equipment and tools required for manufacturing AI servers and generative AI infrastructure.
| Item | FY2027 Q1 | FY2027 Q2 | FY2027 Full Year |
|---|---|---|---|
| Sales (100M yen) | 95.0 | 118.5 | - |
| YoY Growth | +26.0% | +38.9% | - |
| QoQ Growth | -9.4% | +24.7% | - |
| Shipments (100M yen) | 116.5 | 123.9 | - |
| YoY Growth | +25.3% | +60.0% | - |
These figures suggest structural demand growth beyond seasonal factors. If AI-related capital expenditure continues at this pace, it could serve as a catalyst for an upward revision of full-year earnings.
Focus on Q3 and Full-Year Execution
A detailed explanation of the finalized first-half results will be held on October 22. The current figures are unaudited estimates; final numbers may change after rigorous auditing. However, the substantial exceedance in both sales and shipments confirms Disco's strengthening position in the AI sector.
Full-year forecast revisions in focus
The company has not yet released full-year individual forecasts. Investors will closely watch for potential upward revisions during the October 22 presentation. Given the strong execution rate in the first half, management is likely considering raising its annual guidance.
Analyst take
This disclosure highlights that Disco's business structure is increasingly supported by the structural demand surge from generative AI, rather than relying solely on semiconductor cycles. The first-half sales exceeding forecasts by over 6% signals performance above market expectations.
The key metric for investors is execution in the second half. The backlog of orders accumulated in Q1 and Q2 will determine full-year results. Notably, precision processing tools, which have a consumable nature, are also showing high growth, indicating a reinforcement of the recurring revenue base.
Investors should scrutinize the October 22 announcement for third-quarter outlooks and potential full-year revisions. In an environment where AI demand sustainability remains uncertain, Disco's market share acquisition will be a critical indicator of its competitive advantage.
