Kioxia posts near-¥2 trillion quarterly operating profit on AI storage demand, but its outlook falls short

Kioxia Holdings, the Tokyo-based maker of NAND flash memory and SSDs, published its results for the six months to September 30 on the evening of October 30. The numbers confirm how much the build-out of AI data centres has lifted memory makers, but the company's forecast for the current quarter came in well below what analysts had pencilled in.

A record quarter

According to press reports on the release, revenue for the July–September quarter rose 40.3% from the previous quarter to about ¥2.48 trillion, and operating profit climbed 57.1% to roughly ¥1.995 trillion, slightly above a market estimate of around ¥1.95 trillion. For the first half of the fiscal year, Seoul Economic Daily reports revenue of ¥4.25 trillion, more than five times the ¥791 billion of a year earlier, and operating profit of ¥3.26 trillion, an operating margin of 76.9%.

Kioxia also said it has already found buyers for all of its production capacity for next year, and that long-term contracts with hyperscale cloud operators cover well over half of the shipments it expects in 2028. It declared its first dividend since listing, ¥90 per share, or about ¥48 billion in total.

Why the outlook disappointed

For October–December, Kioxia expects operating profit of about ¥2 trillion (around $12.7 billion), against analyst expectations of ¥2.35 trillion, according to figures attributed to Bloomberg. That implies roughly flat profit from one quarter to the next. The key reason is pricing: average NAND selling prices rose by roughly 20–25% in the September quarter (reports differ on the exact figure), compared with roughly 70% in the quarter before.

Finance chief Akira Menju said, as paraphrased by Seoul Economic Daily, that it is unclear whether prices can keep rising in fiscal 2027. A UBS analyst questioned how the company could describe next year's supply as extremely tight while calling its price outlook uncertain.

Market reaction and open questions

Investing.com reported Kioxia's shares down 7.1% at ¥13,470 on October 30, on a day when the Nikkei 225 fell about 2% amid doubts over AI infrastructure spending; the company had scheduled its results for 18:45 Tokyo time. In US trading, shares of SanDisk, Kioxia's manufacturing partner, fell more than 11%, which Investing.com linked partly to Kioxia's pricing warning. Whether AI demand can sustain earnings at this level once price increases level off is now the main question for the NAND sector. The detailed figures above come from media reports; the earnings release itself could not be reviewed for this article.