The setup
Kioxia is the former Toshiba memory division — the world's second-largest maker of NAND flash and SSDs, and since its Tokyo listing the cleanest large-cap way to own the NAND cycle directly. It is the fab: it makes the wafers, so when NAND tightens it captures the price move at the source rather than as a pass-through. Q4 FY25 (the March quarter) was the print where that leverage broke fully the company's way — revenue past ¥1 trillion (~$6.3B) for the first time — and the guide attached to it was the real message: a current-quarter forecast of roughly ¥1.75tn (~$11.0B) revenue and ¥869B (~$5.5B) net profit that, by itself, exceeded the whole fiscal year just reported.
That reframed the release before it landed. The bar for Q1 FY26 (the quarter ended ) wasn't "is it a blowout" — management had already promised one. The bar was whether the fab hit its own audacious guide, what it did with the cash the cycle is now throwing off, and — the question that separates a cyclical from a franchise — whether it would use record pricing power to flood capacity or to hold the line. The answer to the first was yes, narrowly; the answer to the second two is why the stock moved.
The numbers
Records across the board, and a beat of the company's own guide on all three lines. Revenue of ¥1,767.1 billion (~$11.1B) rose 415.5% year-on-year and about 76% sequentially off the ¥1,002.9B (~$6.3B) December quarter — the year-ago base was a trough, which is what a 5x YoY comp encodes. Non-GAAP operating income of ¥1,326.2 billion (~$8.3B) landed at a 75% operating margin, on a gross margin that reached roughly 80% — extraordinary figures that only appear when a doubled-price deck runs through a wafer maker's largely fixed cost base. Non-GAAP net profit of ¥887.0 billion (~$5.6B) rose close to 47-fold. Each cleared the guide set three months earlier (≈¥1.75tn / ¥1.298tn / ¥869B, or ~$11.0B / ~$8.2B / ~$5.5B).
Two balance-sheet lines carried as much signal as the P&L. Core free cash flow hit a record ¥827.2 billion (~$5.2B), and the company flipped to a net-cash position of ¥186.7 billion (~$1.2B) — a genuine milestone for a business that carried meaningful leverage through the trough. Against that, management announced a share buyback of up to ¥800 billion (~$5.0B) and a 3-for-1 stock split. For the September quarter (Q2 FY26) Kioxia guided revenue to ~¥2.39 trillion (~$15.0B) and operating profit to ~¥1.89 trillion (~$11.9B) — sequential acceleration, not a plateau.
The one asterisk: against a sell-side bar that had raced ahead of the guide, the print technically "missed." Consensus had crept to roughly ¥1.84tn (~$11.6B) revenue and ¥1.37tn (~$8.6B) operating profit, so the actuals came in a touch light of the Street even as they beat the company's own forecast. The market's verdict was unambiguous about which bar mattered — shares rose ~17.7% on the day. When a stock gaps up on a "miss," the miss wasn't the story.
The rest of this dive is for paid subscribers.
The headline numbers are above. The 6 sections below carry the mechanism, the peer read, the valuation work, and the dated tests that decide it.
- What's actually driving it
- How peers read this
- Valuation reality check
- What we'd watch from here
- Listed-market read-through
- Bottom line
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