2Q results: In-line earnings, mixed outlook for 3Q/4Q but supply/demand fundamentals remain intact

Kioxia reported 2Q sales of ¥2,480.0bn (+453% YoY, +40% QoQ) and non-GAAP operating profit of ¥1,988.3bn (+2,181% YoY, +50% QoQ), a record second-highest quarterly result with an 80.2% operating margin. Top-line expansion was driven mainly by ASP increases (mid-20% QoQ) on low-teens % volume growth. SSD & Storage accounted for 65% of revenue (66% in 1Q) at ¥1,616.0bn (+561% YoY, +38% QoQ), while Datacenter & Enterprise rose to mid-60% (vs. 60% in 1Q); Kioxia's 80% margin was second only to SanDisk among major NAND makers. For 3Q, management guides revenue of ¥2,500.0bn and non-GAAP operating profit of ¥2,000.0bn (80% margin), implying a flattish trend versus industry peers' double-digit growth, due to delayed enterprise SSD shipments amid longer production lead times. End demand is unchanged and even revised up for eSSD; management calls the delay temporary, not structural, and keeps its full-year high-teens % bit shipment target, implying close to double-digit QoQ growth in 4Q, above