Ebara Corporation FY2026 Q2 Earnings Deep Dive Report

Ebara Corporation (TSE: 6361) reported exceptionally strong consolidated financial results for the second quarter (1H) of the fiscal year ending December 2026. Driven by the global surge in AI-related markets and a robust recovery in semiconductor manufacturing equipment demand, the company achieved record-highs for the first half across all key metrics: orders, revenue, operating profit, and interim profit. Despite temporary headwinds in the Energy segment and the impact of geopolitical tensions in the Middle East, the record-breaking performance of the Precision & Electronic segment has served as a powerful engine for overall growth.

This report selects 10 critical topics from the earnings presentation materials to provide a detailed analysis of the company's current performance trends, factor analysis, segment-specific results, and the outlook for the full fiscal year and growth strategies.

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1. Overall Earnings Summary: Record-High First-Half Performance

Consolidated results for the first half of FY2026 significantly exceeded both the previous year's performance and initial internal projections.

• Orders : ¥636.2 billion (+41.0% YoY / +10.3% vs. initial plan)
• Revenue : ¥490.7 billion (+9.4% YoY / +2.7% vs. initial plan)
• Operating Profit : ¥50.6 billion (+1.2% YoY / +2.4% vs. initial plan)
• Operating Profit Margin : 10.3% (-0.9 pts YoY)
• Interim Profit Attributable to Owners of Parent : ¥33.5 billion (+7.1% YoY)

While the Energy segment experienced a decline in both revenue and profit, the Precision & Electronic and other segments successfully offset these losses, ensuring overall growth in both revenue and profit for the consolidated group.

[Slide Commentary: Key Takeaways from Earnings]

The slide above is the most critical document summarizing the core of this quarter's results. The left side shows the 1H performance, highlighting a significant increase in orders by ¥184.9 billion (+41.0% YoY) . On the right, the full-year forecast reflects the capture of strong first-half demand, with full-year orders revised upward to ¥1.245 trillion (+¥175 billion from previous guidance) and revenue to ¥1.053 trillion (+¥33 billion) . Operating profit remains unchanged at ¥125 billion; this accounts for temporary settlement losses related to the revision of the retirement benefit system and the prolonged impact of Middle Eastern instability, which the company expects to offset through its core business earning power.

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2. Operating Profit Variance Analysis and Regional Trends

Primary Factors for Operating Profit Variance

An analysis of the ¥0.6 billion increase in operating profit YoY shows that revenue growth (+¥10.7 billion) and profitability improvements (+¥10.2 billion) were the primary positive drivers. These were supported by product mix optimization and price revisions in the Precision & Electronic, Building & Industrial, and Environmental segments. Conversely, fixed cost increases (-¥23.8 billion) —driven by base salary hikes and increased depreciation for future growth—acted as a drag on profits. Foreign exchange effects (+¥2.8 billion) also provided a modest tailwind.

Regional Revenue Trends

Overseas revenue now accounts for 66% of total sales, reflecting the company's deepening global footprint.

• Japan : ¥167.9 billion (+9.8% YoY)
• Taiwan, Korea, and Other Asia : ¥124.9 billion (+45.8% YoY)
• China : ¥73.8 billion (-2.7% YoY)
• North America : ¥52.8 billion (-16.2% YoY)
• Europe : ¥32.7 billion (+18.4% YoY)
• Middle East : ¥19.9 billion (-26.0% YoY)

The significant growth in the Taiwan, Korea, and Other Asia region is particularly notable, directly confirming the explosive demand for manufacturing equipment and components for cutting-edge semiconductors fueled by the AI market boom.

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3. Deep Dive into Segment Performance

(1) Precision & Electronic Segment: Phenomenal Growth Driven by AI Demand

As the company's primary growth driver, the Precision & Electronic segment recorded historic results.

• Orders : ¥267.4 billion (+89.3% YoY)
• Revenue : ¥183.6 billion (+22.0% YoY)
• Operating Profit : ¥32.5 billion (+38.7% YoY)
• Operating Profit Margin : 17.7% (+2.1 pts YoY)

[Slide Commentary: Performance Trends in Precision & Electronic]

This slide symbolizes the exceptional performance of the Precision & Electronic segment. AI-related demand is driving the entire market, and the factory utilization rates of key customers—logic/foundry and memory manufacturers—remain at extremely high levels. The flagship CMP (Chemical Mechanical Polishing) equipment significantly outperformed expectations, and components such as dry vacuum pumps saw growth in both product sales and S&S (Service & Support). Improved gross margins in both products and S&S, combined with revenue growth, easily absorbed increases in personnel and R&D expenses, achieving a high operating profit margin of 17.7% .

Regarding the product application mix, the ratio of non-memory applications (79%) remains at a high level compared to the previous year, indicating strong investment appetite in advanced packaging and cutting-edge logic.

(2) Energy Segment: Temporary Profit Decline with Recovery Expected in 2H

• Orders : ¥112.5 billion (+29.6% YoY)
• Revenue : ¥96.7 billion (-11.3% YoY)
• Operating Profit : -¥0.7 billion (vs. ¥11.1 billion profit in the same period last year)

Orders for the oil & gas and LNG markets were strong, leading to a significant increase in 1H orders. However, revenue was impacted by a decrease in the order backlog from the previous fiscal year, delays in parts shipments and technical instructor dispatches due to Middle East tensions , operational losses at the Jeannette plant in the US , and fixed costs related to the hydrogen business , resulting in a temporary operating loss for the first half.

(3) Building & Industrial Segment: Strong Demand from North American Data Centers

• Orders : ¥148.4 billion (+18.3% YoY)
• Revenue : ¥129.5 billion (+13.8% YoY)
• Operating Profit : ¥8.3 billion (+20.9% YoY)

Despite the continued slump in the Chinese building equipment market, demand for data centers and semiconductor-related facilities, particularly in North America, remains very robust . Combined with price revisions and productivity improvements in Japan, the segment achieved growth in both revenue and profit.

(4) Infrastructure and Environmental Segments: Stable Profit Foundation

• Infrastructure : Captured disaster prevention and mitigation demand based on Japan's "Fundamental Plan for National Resilience," maintaining high profitability with an operating profit of ¥5.6 billion (17.4% margin) .
• Environmental : Steady orders for life-extension work on waste treatment facilities and DBO (Design-Build-Operate) projects led to a significant profit increase, with operating profit reaching ¥6.6 billion (+51.2% YoY) .

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4. Growth Strategy and Technology/Business Topics

The company is steadily implementing measures to strengthen its mid-to-long-term competitiveness beyond merely capturing current demand.

1. High Value-Added Precision & Electronic Solutions and PLP Support :
   • Launched the "EVIS" system, which integrates the "LA+" exhaust gas treatment system (50% smaller footprint) with dry vacuum pumps (Winner of the 2025 Vacuum Component Award).
   • Established technical superiority in the high-growth advanced packaging sector by introducing the "EAPI" CMP equipment and "UFP" electroplating equipment for Panel Level Packaging (PLP).
2. Expansion of Global S&S (Service & Support) Structure :
   • Plans to expand dry vacuum pump overhaul facilities in Taiwan and South Korea in 2026.
   • In the energy sector, the company reopened its flagship S&S hub in Houston, USA, and is constructing a new S&S facility in Abu Dhabi, UAE (scheduled for 2026). This strengthens the stock-based business model by monetizing the growing installed base.
3. Upfront Investment for Decarbonization and Hydrogen Society :
   • Secured orders for booster pumps and hydrogen gas transfer blowers for liquid hydrogen receiving terminals.
   • Obtained the world's first type approval for cargo pumps for liquid hydrogen carriers , with plans to complete a full-scale commercial product testing and development center in 2026.

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5. FY26 Full-Year Earnings Forecast and Outlook

Based on the first-half progress and current market environment, the company has revised its full-year earnings forecast for the fiscal year ending December 2026.

[Slide Commentary: Full-Year Consolidated Earnings Forecast]

This slide presents the outlook for the entire fiscal year ending December 2026. Following the upward revision of the WFE (Wafer Fab Equipment) market growth forecast from "10%+" to "18%+" , the company has aggressively increased its full-year order forecast for the Precision & Electronic segment from ¥405 billion to ¥550 billion (+81.3% YoY) . Consequently, total consolidated orders are expected to reach ¥1.245 trillion (+31.1% YoY) , with revenue projected at ¥1.053 trillion (+9.9% YoY) .

Forecasts for operating profit (¥125 billion) and profit attributable to owners of the parent (¥99.5 billion) remain unchanged. While there are negative factors such as the Energy segment's 1H shortfall (-¥3 billion vs. old plan) and settlement losses from retirement benefit revisions (-¥4 billion), these are planned to be offset by upward revisions in the Precision & Electronic segment (+¥3.5 billion) and improvements in the Environmental segment (+¥3.5 billion).

In particular, the Energy segment is structured such that S&S ratios and revenue recognition for delayed projects are concentrated in the second half (3Q-4Q) . By targeting an operating profit of ¥18.7 billion in the second half (a V-shaped recovery from the -¥0.7 billion in 1H), the company aims to achieve its full-year plan.

Regarding dividends, the company plans an annual dividend of ¥66.0 per share (+¥7.0 increase YoY), maintaining its commitment to high capital efficiency targets of 18.8% ROE and 11.8% ROIC .