Kioxia’s First Post-IPO Report: Profit Instead of Loss, Shares Up 19%

Kioxia reported results for the third quarter of fiscal 2024, ending December 31, 2024. This is the first quarterly report from the Japanese SSD maker since its IPO and listing on the Tokyo Stock Exchange in December last year.

The company’s revenue for the quarter was ¥450 billion (about $3 billion), down 31% year-on-year and 6.4% from the previous quarter. The company posted an IFRS profit of ¥76.1 billion ($506.8 million), compared with a loss a year earlier. These results are roughly in the middle of Kioxia’s forecast range.

Image source: Kioxia

Kioxia’s third-quarter IFRS operating profit was ¥122.7 billion ($817.4 million), compared with a loss of ¥65.0 billion ($433.0 million) a year earlier.

Operating profit under IFRS for the nine-month period was ¥414.6 billion (about $2.7 billion) on revenue of ¥1.3594 trillion ($9.1 billion), compared with a loss of ¥296.6 billion ($1.98 million) a year earlier. Net profit was ¥252.0 billion ($1.96 million), compared with a loss a year earlier.

The company forecasts full-year IFRS operating profit in the range of ¥431.61 billion to ¥453.61 billion ($2.9 million to $3.0 million). As noted by Bloomberg, after Kioxia posted a nine-month operating profit on the back of a loss in the previous fiscal year, its shares rose 19%, the company’s highest performance since listing on the Tokyo Stock Exchange. Kioxia shares traded at ¥2,172 on Monday, up nearly 50% from its initial public offering price of ¥1,455.

Kioxia divides its revenue streams into three parts: SSD & Storage, Smart Devices, and Other, Blocks&Files explained. Other includes retail products like SD cards and USB drives, as well as revenue from Western Digital chip sales. Smart Devices includes memory for smartphones, tablets, TVs, other consumer devices, and the automotive market. SSD & Storage includes NAND and SSDs for PCs, data centers, and enterprises.

The company said it expects strong demand for SSDs due to continued investment in AI infrastructure by most IT companies. It also expects the NAND memory market to grow by 10% in calendar year 2025. Revenue in the SSD and Storage category has been growing since last year, roughly doubling due to demand for AI servers and traditional server replacement. Data center and enterprise SSD sales accounted for about half of this segment’s revenue. Kioxia estimates its data center and enterprise (PCIe) SSD market share at 10% in calendar year 2023.

CFO Hideki Hanazawa said customer qualifications for Kioxia’s 8th-generation BiCS flash memory in three segments are on track, and he expects demand to recover in the second half of calendar year 2025. Kioxia said it will focus on PCIe 5.0-capable SSDs in the near future. The company will announce BiCS Gen 9 NAND with more than 300 layers later this month.

Kioxia has a NAND manufacturing partnership with Western Digital (WD), and WD’s SSD revenue was $1.88 billion in the most recent quarter, up 12% year over year. Kioxia said the spinoff of WD’s flash business to SanDisk “will not have any impact on the business operations or growth of our company and our joint ventures.”

The company forecast fiscal 2024 revenue of ¥1.69 trillion ± ¥30 billion ($11.3 billion), up 57% from the previous year at the midpoint of the range, making it Kioxia’s “largest annual revenue ever.”