KDDI (9433N) Q2 2027 Earnings Report

The call was broadly optimistic, with first-half revenue and profit exceeding plan, double-digit adjusted operating profit growth, improving subscriber and churn metrics, strong performance across growth areas, and substantial AI, data center, and physical AI initiatives. The main challenges were lower Personal Growth profit from finance and energy, below-consensus period profit, expected second-half profit decline, the large IFRS-to-adjusted profit difference, and acknowledged M&A execution concerns. Highlights significantly outweighed lowlights.

Management said the original profit plan was plus JPY 40 billion in the first half and JPY 20 billion in the second half; the first half delivered over JPY 30 billion of overachievement, including about JPY 10 billion from technological cost being delayed to the second half, and JPY 30 billion will be invested in the second half, with Rakuten roaming outside of this. The company is confident of achieving this fiscal year’s operating income target and is targeting 5% plus alpha organic growth in the medium term; a 3% increase in core profit year-on-year was described as within sight. Connectivity-type data center investment includes completion of the sixth building in the year ending March '28, while Rubin is expected to come on board by next year; the company said JPY 100 billion for Japan is expected to start generating value or return by FY '30, with at least JPY 30 billion of R&D investment through 2030, over 300 physical AI specialists, and introduction of over 1,000 robots. The interim dividend is JPY 42, up 5% year-on-year, and medium-term targets include AI and security HR of 3,000 and 2,000 each.