TDK Corporation (6762): FY2025 Results Summary — Record Net Sales and Profits Led by ICT and HDD Demand

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Note: TDK labels the fiscal year ended March 31, 2026 as “FY March 2026” (FY3/26); this site classifies it as FY2025, and all labels in the text, tables and segment data below follow the company’s own presentation. In FY March 2026 TDK posted net sales of ¥2,504.8 bn, up 13.6% year on year, and operating profit of ¥272.4 bn, up 21.5%, with the company stating that net sales and all profit items set record highs. Growth was driven by continuous robust demand in the ICT and HDD markets, with sales of small capacity batteries and sensors to the ICT market and of HDD heads and suspension assemblies increasing considerably. For FY March 2027 the company projects net sales of ¥2,580.0 bn and operating profit of ¥295.0 bn, and it plans to raise the annual dividend to ¥40.00 per share from ¥36.00.

Consolidated Results (Full-Year Actual)

Net sales rose ¥300.0 bn year on year to ¥2,504.8 bn and operating profit rose ¥48.2 bn to ¥272.4 bn, lifting the operating profit margin by 0.7pts to 10.9%. Net profit attributable to owners of parent increased 17.1% to ¥195.7 bn and earnings per share rose to ¥103.09 from ¥88.10. ROIC improved by 0.8pt to 7.5%. Free cash flow fell 35.4% to ¥129.9 bn as cash flows from investing activities expanded to ¥(377.8) bn against ¥507.7 bn of cash flows from operating activities.

Item	FY3/26	FY3/25	Change
Net sales (¥bn)	2,504.8	2,204.8	+300.0 / +13.6%
Operating profit (¥bn)	272.4	224.2	+48.2 / +21.5%
Operating profit margin	10.9%	10.2%	+0.7pts
Profit before tax (¥bn)	276.8	237.8	+39.0 / +16.4%
Net profit attributable to owners of parent (¥bn)	195.7	167.2	+28.5 / +17.1%
ROIC	7.5%	6.7%	+0.8pt
Free cash flow (¥bn)	129.9	201.0	(71.1) / (35.4)%
Earnings per share (¥)	103.09	88.10	–
USD/JPY	150.76	152.66	1.2% JPY appreciation
EUR/JPY	174.76	163.86	6.7% JPY depreciation

The results included one-time expenses of ¥13.6 bn. TDK states the exchange rate impact decreased net sales by approx. ¥2.5 bn and operating profit by approx. ¥10.6 bn; its stated forex sensitivity to a one yen change is ¥11.0 bn of net sales and ¥2.0 bn of operating profit for the US dollar, and ¥2.0 bn of net sales and ¥0.3 bn of operating profit for the euro. On the balance sheet, total assets reached ¥4,415.2 bn at March end 2026 (up ¥873.8 bn), total equity attributable to owners of parent ¥2,187.2 bn, the equity ratio 49.5% (down 1.3pts) and the debt to equity ratio 0.28 times. Cash and cash equivalents stood at ¥842.8 bn. CAPEX was ¥298.6 bn (up ¥73.3 bn), depreciation ¥204.2 bn and R&D expenses ¥289.7 bn, or 11.6% of net sales.

Segment Results

All four reporting segments grew sales. Energy Application Products remained by far the largest, with net sales up 16.5% to ¥1,370.3 bn on higher small capacity battery volumes and new model sales, although its operating profit margin eased to 18.0% from 19.9%. Magnetic Application Products delivered the sharpest profit recovery, with operating profit up 698.1% to ¥27.0 bn on robust HDD demand, while Sensor Application Products lifted operating profit 316.4% on a segment-slide basis as sales rose 18.6% to ¥224.6 bn. Passive Components grew sales 6.0% to ¥593.2 bn and operating profit 22.8% to ¥41.8 bn.

Segment	Net sales FY3/26 (¥bn)	Net sales FY3/25 (¥bn)	Operating profit FY3/26 (¥bn)	Operating profit FY3/25 (¥bn)
Passive Components	593.2	559.6	41.8	34.1
Sensor Application Products	224.6	189.5	20.9	5.0
Magnetic Application Products	262.9	223.6	27.0	3.4
Energy Application Products	1,370.3	1,176.5	246.7	234.4
Other	53.8	55.6	(10.2)	(4.4)
Subtotal	–	–	326.2	272.4
Adjustment	–	–	(53.8)	(48.3)
Total	2,504.8	2,204.8	272.4	224.2

By market, ICT sales grew 18.5% to ¥1,550.4 bn and accounted for 61.9% of net sales, industrial equipment rose 10.5% to ¥403.2 bn, automotive rose 2.6% to ¥459.5 bn and others rose 9.5% to ¥91.7 bn. By region, China sales rose 15.6% to ¥1,378.0 bn (55.0% of the total) and Asia and Others rose 18.0% to ¥616.7 bn, while Japan rose 5.2% to ¥183.5 bn, the Americas 3.8% to ¥145.4 bn and Europe 3.4% to ¥181.2 bn. The overseas sales ratio was 92.7%.

FY March 2027 Projections

TDK projects net sales of ¥2,580.0 bn (+3.0%) and operating profit of ¥295.0 bn (+8.3%) for FY March 2027, with the operating profit margin improving to 11.4% and net profit attributable to owners of parent rising 15.0% to ¥225.0 bn. ROIC is projected at 8.0%. Free cash flow is projected to fall to ¥60.0 bn as CAPEX is planned at ¥370.0 bn against ¥298.6 bn in FY March 2026; depreciation and amortization is projected at ¥240.0 bn and R&D expenses at ¥310.0 bn. Assumed rates are ¥150.00/USD and ¥175.00/EUR. One-time expenses are assumed at ¥(6.4) bn in FY March 2027 versus ¥(13.6) bn in FY March 2026, and one-time gains at ¥2.8 bn versus ¥1.0 bn.

Item	FY3/27 Projection	FY3/26 Actual	Change
Net sales (¥bn)	2,580.0	2,504.8	+75.2 / +3.0%
Operating profit (¥bn)	295.0	272.4	+22.6 / +8.3%
Operating profit margin	11.4%	10.9%	+0.5pts
Profit before tax (¥bn)	300.0	276.8	+23.2 / +8.4%
Net profit attributable to owners of parent (¥bn)	225.0	195.7	+29.3 / +15.0%
ROIC	8.0%	7.5%	+0.5pts
Free cash flow (¥bn)	60.0	129.9	(69.9) / (53.8)%
Earnings per share (¥)	118.54	103.09	–
Annual dividends (¥)	40.00	36.00	–
USD/JPY	150.00	150.76	–
EUR/JPY	175.00	174.76	–

Segment	FY3/26 Actual (¥bn)	FY3/27 Projection (YoY)	Factor
Passive Components	593.2	+5 ~ +8%	Sales of inductive devices to the automotive market and products for AI server applications are expected to increase.
Sensor Application Products	224.6	±0 ~ +3%	Sales of magnetic sensors to the ICT market are expected to decrease; sales of MEMS sensors are expected to increase.
Magnetic Application Products	262.9	+21 ~ +24%	Sales of HDD heads and suspension assemblies are expected to increase.
Energy Application Products	1,370.3	(3) ~ ±0%	Sales of small capacity batteries to the ICT market are expected to decrease.
Other	53.8	–	–
Total	2,504.8	2,580.0	–

The forecast assumes smartphone production volume falls 10% to 1,112 mn units due to spikes in memory prices, notebook PCs fall 12% to 181 mn units and tablets fall 8% to 140 mn units, while 5G smartphones rise 3% to 844 mn units. Automobile production is assumed to edge down 1% to 91.6 mn units, but xEV volume is assumed to rise 13% to 35.6 mn units. Total HDD units are assumed to decline 2% to 125 mn, while nearline HDD units rise 7% to 76 mn and AI servers rise 21% to 2.6 mn units.

Shareholder Returns

TDK states that dividends for FY March 2026 are expected to increase by an upward revision from initial plans, to ¥36.00 per share from ¥30.0 in FY March 2025, with a dividend payout ratio of 34.9% against 34.1% the previous year. For FY March 2027 the company projects an annual dividend of ¥40.00 per share, implying a payout ratio of 33.7%. All per-share figures have been converted to align with the post-share split standard of the 1 for 5 share split effective October 1, 2024. Under the revised capital allocation plan for the FY3/25 to FY3/27 period, shareholder returns are set at ¥180 bn, up from the ¥150 bn assumed in the May 2024 and April 2025 plans.

Medium-Term Plan Progress

TDK states that in FY3/26 it achieved its initial targets and that there is no change to the final-year (FY3/27) targets of the Medium-term Plan. Against a FY3/27 target of ¥2,500.0 bn in net sales (CAGR of approx. 5%), FY3/26 actual net sales were ¥2,504.8 bn and the FY3/27 projection is ¥2,580.0 bn. ROE was 9.8% in FY3/26 against a FY3/27 target of 10% or more and a projection of 10.3%; ROIC was 7.5% (above a WACC of 7.0%) against a target of 8% or more and a projection of 8.0%; and the operating profit margin was 10.9% against a target of 11% or more and a projection of 11.4%. The shareholders’ equity ratio was 49.5% against a target level of 50%, and the D/E ratio 0.28x against a target range of 0.3 to 0.4x. The mid- to long-term target state is ROE of 15% or more, ROIC of 12% or more, an operating profit margin of 15% or more and sales CAGR of 10% or more, at an assumed rate of ¥135/US$.

The capital allocation plan for the FY3/25 to FY3/27 period was revised in April 2026 to reflect cumulative operating cash flow of ¥1,330 bn, up ¥330 bn from the ¥1,000 bn assumed as of May 2024 and up from ¥1,250 bn as of April 2025. Total CAPEX was raised to ¥900 bn (Energy ¥510 bn, Passive ¥150 bn, Sensor ¥70 bn, Magnetic ¥140 bn, Other ¥30 bn) from ¥800 bn, strategic investments to ¥200 bn from ¥150 bn, CVC investments to ¥50 bn and shareholder returns to ¥180 bn. On a three-year cumulative basis for FY3/25 to FY3/27, TDK shows operating cash flow of ¥1,333.5 bn, investing cash flow of ¥(942.6) bn and free cash flow of ¥390.9 bn.

On business portfolio management, TDK reports that all 29 component business units selected as ‘businesses to be intensively monitored’ have been reviewed, with 2 units moved to the Profit Base, 13 undergoing improvement, 9 divested or transferred and 5 under discussion for implementation. Segment BizROA (ROIC) improved to 4.8% for Passive Components (from 3.3%), 4.7% for Sensor Application Products (from 0.2%) and 8.4% for Magnetic Application Products (from 1.0%), while Energy Application Products eased to 25.7% from 27.3%; the company applies a minimum hurdle rate of over 10%.

TDK identifies the AI ecosystem, and AI data centers in particular, as its priority investment area, targeting a CAGR of 25 to 30% for sales to the AI market between FY3/26 actual and its FY3/31 target, and 10x growth in passive components for AI data center-related applications over the same horizon. Key initiatives include expanded supply capacity for aluminum electrolytic capacitors, capacity expansion for thin-film and wire-wound inductors, a broader optical transceiver module lineup, continued expansion of suspension production capacity and preparation for mass production of HAMR, a broader medium capacity battery lineup for AI data centers, and the industry’s first mass production of precious-metal-free nanocomposite bonding materials for semiconductor manufacturing. TDK also cites the development of an Analog Reservoir AI Chip, a technology partnership with Porsche Motorsport, SensEI EdgeRX integration with AWS, and the acquisition of SoftEye. External recognition in the period included a record-high FTSE score of 4.8 out of 5.0, a first-ever EcoVadis “Platinum” rating and first-time selection as a “DX Stock 2026” by METI. An Investor Day is scheduled for September 1, 2026.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.