Kioxia Hldgs Corp

I'm Hayasaka, CEO of Kiyokusha. Thank you for joining us today. First of all, I would like to report to you about two points ahead of the explanation of the settlement. First of all, as I said at the time of the meeting, we have passed all the standards of the top-notch prime market by the end of September. At the time of the rise last year, the standard of the distribution stock ratio was not met, but it was raised because it was a special case. However, the distribution stock ratio was met by a part of the salesman, and the standard was 35%. I will report here. The second point is that the MSCI index has been newly adopted in November and is expected to improve the global level of investment for our company. We will continue to work to improve corporate value through continuous growth in the medium and long term. Now, I would like to explain the important points of the second half of the March second quarter. Since the rise last year, I have repeatedly said that through daily business, we are experiencing a very strong increase in AI. The attraction from data centers and hyperscalers is very strong, and customers for PCs and smartphones have normalized their stock standards, and demand is very high. In the second half of the year, sales revenue increased by more than 10 billion yen in the short term. The non-gap sales profit rate is about 20%. The net profit has reached an increase of more than 2 times in the short term. We have been able to reconfirm the importance of AI and our profitability. In the third half of the year, in addition to the rise in sales, the demand for data centers related to AI continues to be strong, and we expect the greatest sales revenue and profit expansion in the past. We think that this trend will continue to the future, and we expect that the demand will continue to expand and the trend will continue to expand due to the situation in which demand exceeds supply. Also, next year, from April of the 26th, our VIX's 8th generation will be the main product, and it is expected to greatly contribute to revenue.

That's all.

Next, Mr. Hanazawa, please. I'm Hanazawa,財務統括責任者. Nice to meet you. First, I will pick up the main performance figures for this calculation. The second quarter's performance is a large increase and increase in all quarter costs, and the sales revenue is 4,483 billion yen. The non-gap operating profit is 8.72 billion yen, and the margin is close to 20%. The free cash flow is 4.13 billion yen, The net DE ratio has improved steadily to 107%. In addition, I would like to talk about the non-gap sales profit after adjustment and its margins. The non-gap sales margin of our company includes part of the research and development costs, The net profit of non-gap sales after adjustment, which has improved the research and development cost, including sales revenues, was 1,456 billion yen, with a margin of 32%. In addition, if the joint venture-related sales revenue and sales revenues are improved, the margin will be 36%, which is about 4 points higher. Part of the processing cost generated in the joint venture-related business activity has been reduced at cost. Therefore, in order to evaluate the profitability of our individual business activities, we are showing the figures that have been affected by the joint venture. These figures indicate the profitability of our company alone. I will explain the details in detail in the following slides. I will explain the highlights of the second quarter of March of 2026. The non-gap operating profit and the current net profit exceeded the limit of the guidance. In addition to the increase in sales, there was also a rise in the amount of goods and the flow of stock. In many markets, the customer stock has been optimized, and the price of sales has been confirmed to rise in the like-for-like trend. In all market currencies, in the case of smart devices, in addition to having a full-fledged demand, As the 8th generation VIX Flash has moved forward, the output volume of the gigabyte base has increased significantly. In addition, by continuing to improve productivity, the profit ratio has been greatly improved at all market prices. The sales revenue of the second market was 4,483 billion yen, with an increase of about 31% at all market prices. The non-GAAP operating profit is 8.72 billion yen, and the margin is about 19%, which is a 6-point increase in all market share. The non-GAAP current net profit is 4.17 billion yen, which is a large increase. This includes a total cost of about 1 billion yen from the refinance carried out in July, It is actually an increase of nearly three times. Moreover, this one-off cost has not been reduced since the third quarter. The profit per person is 77.22 yen. The exchange rate was 147 yen and 145 yen for the first quarter, and the yen price was the same as the dollar. Hanbai tanka wa asimoto no juyou no tsuyasa wo uke, like for like de hitoketa percent dai nakaba no joushou to, smart phone, pasokon, data center muke no izure mo, zen shihanki hi de joushou shimashita. Zentai heikin no hanbai tanka to shite wa, hitoketa percent dai zenhan no geiraku to narimashita ga, This is mainly due to the increase in sales of smart devices, and the impact of the product mix. In addition, some of the sales for hyperscalers were requested by customers, and there was an influence of switching from SSD to NAND alone. The amount of output based on gigabytes increased in all applications, focusing on smart devices, which is 30% higher than the previous market price. Next, I will explain the sales performance of each application based on the market price. Our application is classified into three categories, smart devices, SSD and storage. Other products include B2C products such as SD memory cards, and sales profits for 3Ds manufactured by 3 manufacturing companies. Smart devices for smartphones and tablets have a total sales profit of 35% of the total sales profit of 15.73 billion yen, which is about twice the market price. In addition to having a full-scale demand for smartphones, as a special factor for our company, the shift from the 5th generation to the 8th generation VIX Flash has gone as expected, resulting in a large increase. SSD and storage, which are composed of SSD products for computers and servers as well as memory products, will be increased by 12.5% at the full market price. 2,446 billion yen, which is 55% of the total sales revenue. The average sales revenue of SSD and storage is about 60% for data centers and enterprises, and about 40% for computers. The demand for computers has continued to grow and has increased. The sales revenue for the data center was high for the AI server, and the sales price rose, resulting in a large increase in all market expenses. In addition, for the SSD customer certification of the 8th generation VIX Flash with a large capacity of 2TB QLC chip, as planned, 122TB per year, Next, I would like to explain the cash flow of the second half of the year. The balance of the end of September in 2025 and the balance of the equivalent amount of the balance was 23.5 billion yen and the increase of 5.71 billion yen from the end of June. The sales cash flow was 1,140 billion yen. In the second half of the year, the amount of money spent on refinancing was 25.8 billion yen. In addition to this, the sales cash flow of the first half of the year was more than the amount of money spent on the first half of the year. We will continue to control and reduce the cost of TANOR. to maximize the business cash flow. The investment cash flow has a solid debt ratio, with the gross investment of 9.15 billion yen, and a net of 1.87 billion yen in subsidies, which is a minus of 7.28 billion yen. The free cash flow is a plus of 4.13 billion yen, which is a plus for seven consecutive marketplaces. In the future, we will continue to invest in equipment that is suitable for research and development and demand, in addition to improving our financial quality by expanding our free cash flow. In addition, the financial cash flow was 15.3 billion yen plus due to the increase in borrowed money in refinance. The gross equipment investment of the third quarter was about 7 billion yen, is estimated to be about 2.8 billion yen. We are focusing on investing in the manufacturing equipment of the 8th generation VIX Flash, which is expanding production. In addition, we are also investing in the equipment of the 10th generation VIX Flash for the future. We are preparing for the supply of products that are required for future AI demand. As for the balance sheet, the total assets at the end of September of 2025 are increasing by 6.25 billion yen compared to the end of 2024 with a total of 98.2 billion yen. As for the TANOR assets, the number of days of sales based on raw materials, the first half of the market year, has increased by 123 days and one day, However, the second half of the market has received a large-scale increase in the supply of smart devices, and it has improved to a large extent in 100 days, controlling it to a suitable level. There is a lot of demand at its feet, and demand is expected to exceed supply, and it is expected that the number of days of TANORI's ownership will continue to the same level as it is now. As for net profit and loss, the net profit and loss of net profit and loss of net profit and loss of net profit and loss of net profit and loss of net profit and loss of net profit The share of the capital has become 8,193 billion yen as it has been able to secure profits. It has increased significantly from 7,377 billion yen at the end of 2024, and the capital structure has been improved. We will continue to invest in equipment with sufficient profit and security, This is a policy to improve the balance of debt. This is a graph of the net DE ratio in the market. This is a graph of the net DE ratio in the market. This is a graph of the net DE ratio in the market. This is a graph of the net DE ratio in the market. This is a graph of the net DE ratio in the market. This is a graph of the net DE ratio in the market. This is a graph of the net DE ratio in the market. has decreased by 107% in the second half of 2025. This is due to the reduction of net interest rates and the increase of capital, which focuses on interest-based deposits. The net interest ratio has been seen to be 100%. The loss of business interest increases the loss of free cash flow, We will continue to measure further improvements in the net DE ratio. Next, I will explain the guidance of the third quarter of 2025. The third quarter is expected to increase and increase significantly compared to the second quarter. The sales revenue is 5,000 billion yen to 5,500 billion yen, It is expected to be the best in the past. Due to the tight balance of demand and demand, the price of sales is expected to rise in all applications. The demand for smartphones continues to be strong, and demand for data centers and hyperscalers is expanding in the background of massive AI investments. Non-gap operating profits are estimated at 100 billion to 1,400 billion yen, The margin is set to rise further from 19% in the second half of the year. In addition to the rise in the price of sales and the increase in the output volume based on gigabytes, we will ensure profitability by improving the continuity of production and manufacturing costs and optimizing the production plan. Non-GAAP's net profit is estimated at 6.1 billion yen to 8.9 billion yen. We will continue to capture AI demand and increase the production ratio of the 8th generation VIX Flash, which is competitive, aiming to expand and improve profits. That's all I have to say.

Next, Ms. Fujikawa, please.

Now, I will explain the external situation of the Nando market. As a point of reference, the AIO and data center Enterprise are encouraging the expansion of demand for the Nando market, and demand is expected to exceed supply in Asimoto and CY2026. First of all, regarding the Nando market for the data center Enterprise, we recognize the next three points as growth drivers. The first is the increase in the exchange demand for conventional servers. The second is the rapid increase in the demand for SSDs for AI inference. These two points are explained in the management policy explanation meeting in June of this year. The third is that in addition to these, there is a shortage of supply of near-line hard disk drives, There is a new demand for large-capacity QLC SSDs. Next, regarding the market for smartphones and PCs, customer stock has been normalized, and the introduction and replacement cycles of new AI installed models have led to demand, and the demand for average Gigabyte capacity has expanded significantly due to the continued increase in average Gigabyte capacity. As you can see, demand is in a very strong situation, but as long as it is recognized by data that can be obtained openly, the rate of investment in the Nando industry continues, and the overall demand is expected to exceed supply. Therefore, the market BIT growth rate is 10% in the middle of CY2025, In the year of 2026, we are considering the possibility of restrictions on supply capacity, and we are looking at the latter half of 10%. That's all from me.

Next, Mr. Hayasaka, please.

Next, I would like to talk about the progress of the 26th year of the Nando market, which has changed significantly due to the development of AI. We have consistently announced that large capacity, high-speed storage, flash memory, and SSDs are key devices that lead to the growth of AI. Currently, flash memory SSDs have increased in demand for the AI market in addition to conventional servers, especially for theoretical purposes. Companies such as hyperscalers continue to actively invest in data centers, and demand has increased significantly over the past 26 years. It can be read from the analysis of the customer's voice and the industry's investment and demand behavior. Next, I will explain our 26-year outlook from three points. First of all, we are starting to develop the VIX Flash of the 8th generation with high competitiveness as our main product. We have already started mass production of NAND chips for smartphones, PCs, and data centers, and we are starting to issue samples of SSDs for the 8th generation for data centers. As planned, the 8th generation will increase its production volume to the 5th generation by bit-based in March of 2026, and we think that it will further reduce its profits. Secondly, we are promoting the mass production of new products that meet the needs of AI. In 2026, we will start mass production of 245TB QLC SSDs, and we are planning to start mass production of Super HiOps SSDs, which will contribute to the efficiency of the 10th generation Rix Flash and GPU system. Thirdly, we expect to see a growth of at least 10% in the second half of the CY26 bit growth. We expect to see a growth of at least 10% in the second half of the CY26 bit growth. We expect to see a growth of at least 10% in the second half of the CY26 bit growth. Finally, I would like to summarize today's discussion. First of all, the second half of the year exceeded the limit of guidance, and we were able to reconfirm the recovery of the clear market and the profitability of our company. The net profit of this period was twice as high as that of the first half of the year, including the cost-effectiveness factor. In the third half of the year, sales will continue to increase, mainly due to the increase in sales. Sales will increase in all applications, and for data centers and hyperscalers, there will be a significant increase in demand for AI investment. Finally, we will continue to develop new technologies that can contribute to the development of future AI. Thank you very much.