Company Reports

As the global leader in high-end servo motors and one of the big four industrial robotics companies, Yaskawa Electric has a long track record of supplying servo control solutions for precision machinery. Unlike peers that primarily use servo motors in-house, Yaskawa has built a differentiated model by externalizing its servo technology across a wide range of applications.

Yaskawa Electric's fiscal 2026 (ending February 2027) May-quarter sales rose 10.6% year on year to JPY 139 billion, while operating margin was 6.1%, with 1.6% in robotics. Nevertheless, they retained guidance for JPY 580 billion in sales and a 10.3% operating margin. Shares fell 14% on Monday.

Yaskawa Electric reported fiscal 2025 (ending February 2026) sales of JPY 542 billion, above its prior guidance of JPY 525 billion. Its fiscal 2026 guidance of JPY 580 billion in sales and JPY 60 billion in operating profit implies 7% and 27% year-on-year growth. Shares rose 7% the next trading day.

As the global leader in high-end servo motors and one of the big four industrial robotics companies, Yaskawa Electric has a long track record of supplying servo control solutions for precision machinery. Unlike peers that primarily use servo motors in-house, Yaskawa has built a differentiated model by externalizing its servo technology across a wide range of applications.

As the global market leader in high-end servo motors and one of the big four industrial robotics companies, Yaskawa Electric has a long-term record of providing its servo control-based solutions to high-end applications for precision machinery. Although other industrial robot companies also produce servo motors for their robots in-house, Yaskawa’s strategy has differed in that external sales of its servo technology to customers across various applications have served a central role for the company. As the company continues to take measures to adapt to the "Industry 4.0" trend and accentuates its strengths in its servo technology, we expect Yaskawa will continue to build on this approach to strengthen its motion control/robotics businesses and its customization capability comprising its key products going forward.

Yaskawa Electric's sales rose 2.2% and operating profit fell 13.4% year on year in the November quarter. The company kept its fiscal 2025 (ending February 2026) guidance, which implies year-on-year declines of 2.4% in sales and 4.3% in operating profit.

Yaskawa Electric's sales and operating profit rose 4% and 30%, respectively, year on year in the August quarter. Accordingly, the company raised its fiscal 2025 (ending February 2026) sales and operating profit guidance by 2% and 12%, respectively. Shares jumped 20% on Oct. 6.

As the global market leader in high-end servo motors and one of the big four industrial robotics companies, Yaskawa Electric has a long-term record of providing its servo control-based solutions to high-end applications for precision machinery. Although other industrial robot companies also produce servo motors for their robots in-house, Yaskawa’s strategy has differed in that external sales of its servo technology to customers across various applications have served a central role for the company. As the company continues to take measures to adapt to the "Industry 4.0" trend and accentuates its strengths in its servo technology, we expect Yaskawa will continue to build on this approach to strengthen its motion control/robotics businesses and its customization capability comprising its key products going forward.

Yaskawa Electric reported its May-quarter results last Friday, with sales and operating profit down 5.1% and 5.5% year on year, respectively. The company trimmed its fiscal 2025 guidance (ending February 2026) by 6.3% in sales and 28.3% in operating profit. The share price dropped by 10% on Monday.

As the global market leader in high-end servo motors and one of the big four industrial robotics companies, Yaskawa Electric has a long-term record of providing its servo control-based solutions to high-end applications for precision machinery. Although other industrial robot companies also produce servo motors for their robots in-house, Yaskawa’s strategy has differed in that external sales of its servo technology to customers across various applications have served a central role for the company. As the company continues to take measures to adapt to the "Industry 4.0" trend and accentuates its strengths in its servo technology, we expect Yaskawa will continue to build on this approach to strengthen its motion control/robotics businesses and its customization capability comprising its key products going forward.

As the global market leader in high-end servo motors and one of the big four industrial robotics companies, Yaskawa Electric has a long-term record of providing its servo control-based solutions to high-end applications for precision machinery. Although other industrial robot companies also produce servo motors for their robots in-house, Yaskawa’s strategy has differed in that external sales of its servo technology to customers across various applications have served a central role for the company. As the company continues to take measures to adapt to the "Industry 4.0" trend and accentuates its strengths in its servo technology, we expect Yaskawa will continue to build on this approach to strengthen its motion control/robotics businesses and its customization capability comprising its key products going forward.

Wide-moat Yaskawa Electric announced guidance of JPY 550 billion in revenue and JPY 60 billion in operating profit for fiscal 2025, far below the targets of JPY 650 billion in revenue and JPY 100 billion in operating profit in the current medium-term plan set in May 2024. The guidance revision is primarily based on a lower recovery trajectory for AC servo than expected. End markets such as machine tools and semiconductor equipment remain stagnant amid global tariff turmoil. We trimmed our revenue assumption for the motion control segment to JPY 250 billion from JPY 289 billion during fiscal 2025, and meaningful growth for the segment will happen after fiscal 2026. As a result, we cut our fair value estimate for Yaskawa to JPY 5,300 from JPY 5,600, reflecting the near-term revision of the motion control segment. Yaskawa shares plunged 20% on April 7 amid the tariff fallout, with the Nikkei 225 index meltdown at nearly 8%. We believe Yaskawa’s shares are undervalued as our long-term outlook for the firm’s competitive servo and robotics businesses remains unchanged.

As the global market leader in high-end servo motors and one of the big four industrial robotics companies, Yaskawa Electric has a long-term record of providing its servo control-based solutions to high-end applications for precision machinery. Although other industrial robot companies also produce servo motors for their robots in-house, Yaskawa’s strategy has differed in that external sales of its servo technology to customers across various applications have served a central role for the company. As the company continues to take measures to adapt to the "Industry 4.0" trend and accentuates its strengths in its servo technology, we expect Yaskawa will continue to build on this approach to strengthen its motion-control/robotics businesses and its customization capability comprising its key products going forward.

Wide-moat Yaskawa Electric reported a 2.4% year-on-year revenue decline and a mere 8.6% operating margin in the November quarter, recording three consecutive quarters below 10%, both below our estimates and the firm's previous guidance. Management commented that the negative surprise was mainly attributed to a delayed recovery in servos and inverters, as semiconductor investment weakened in Korea and oil and gas and photovoltaic investment halted in the US, waiting for the presidential election result. While we cut our near-term revenue and operating profit margin estimates for the firm to reflect the near-term weakness, our JPY 5,600 per share fair value estimate remains unchanged as our long-term outlook for the firm's robotics and servo businesses is unaffected. We believe Yaskawa’s shares are currently undervalued.

Wide-moat Yaskawa Electric recorded a revenue decline of 11.8% year on year in the August quarter, dipped further from a 7.1% year-on-year decline in the May quarter and below our estimates of a 3.6% year-on-year decline, due to EV weakness. Operating margin for this quarter marked a mere 9.1% compared with our estimate of 11.3%. While we cut our near-term revenue estimate for the firm based on a delayed top-line recovery in servo and robotics, our JPY 5,600 fair value estimate remains unchanged for two reasons: 1) Our long-term outlooks for the firm’s robotics and servo businesses are unaffected, and 2) One-time gains from the sale and valuation of investments in YSM, an affiliate in China (approximately JPY 24 billion). We believe Yaskawa’s shares are undervalued.

As the global market leader in high-end servo motors and one of the big four industrial robotics companies, Yaskawa Electric has a long-term record of providing its servo control-based solutions to high-end applications for precision machinery. Although other industrial robot companies also produce servo motors for their robots in-house, Yaskawa’s strategy has differed in that external sales of its servo technology to customers across various applications have served a central role for the company. As the company continues to take measures to adapt to the "Industry 4.0" trend and accentuates its strengths in its servo technology, we expect Yaskawa will continue to build on this approach to strengthen its motion-control/robotics businesses and its customization capability comprising its key products going forward.

Although Yaskawa’s 7% year-on-year revenue decline in the May quarter was in line with expectations, its operating margin of 8.4%, down from 11.5% in the previous year, was a negative surprise, impacted by lower capacity utilization of servo motors in the motion control segment and low-margin deals from the robotics segment. We now forecast a slower utilization recovery of servo motors and cut our operating income estimate for fiscal 2024 ending February 2025 by 7.5% to JPY 64 billion. Nevertheless, we expect sales/production of motion control components and robots to pick up in the August quarter. We maintain our fair value estimate of Yaskawa at JPY 5,600 as our medium-term outlook remains intact, and we believe its shares are fairly valued.

As the global market leader in high-end servo motors and one of the big four industrial robotics companies, Yaskawa Electric has a long-term record of providing its servo control-based solutions to high-end applications for precision machinery. Although other industrial robot companies also produce servo motors for their robots in-house, Yaskawa’s strategy has differed in that external sales of its servo technology to customers across various applications have served a central role for the company. As the company continues to take measures to adapt to the "Industry 4.0" trend and accentuates its strengths in its servo technology, we expect Yaskawa will continue to build on this approach to strengthen its motion-control/robotics businesses and its customization capability comprising its key products going forward.

While we slightly cut our near-term revenue estimate for wide-moat Yaskawa Electric based on a delayed top-line recovery in inverters, this does not affect our JPY 5,600 fair value estimate, as our outlook for the firm's mainstay robots and servo motors is unchanged. Motion-control segment orders for the February quarter fell short of our expectations, as the 12% sequential increase in servo motor orders was not enough to offset the 21% decline in inverter orders. Inverter demand was hurt by weaker oil/gas-related investments in the US, which we expect will continue in the near term. As a result, we cut our revenue estimate for fiscal 2024 (ending February 2025) by 4% to JPY 579 billion and lowered our operating margin assumption by 0.4 percentage point to 12.0%. Nevertheless, a recovery in servo motor demand is underway, supported by semiconductor-related investments as well as demand in China, where orders increased 13% sequentially and 16% from last year. Moreover, the company’s plan to invest about JPY 30 billion for a new factory in the US confirms medium-term growth, driven by the need for industrial robots and servo motor-based equipment to produce semiconductor equipment. We believe these factors are priced into the shares and currently see limited upside potential.

As the global market leader in high-end servo motors and one of the big four industrial robotics companies, Yaskawa Electric has a long-term record of providing its servo control-based solutions to high-end applications for precision machinery. Although other industrial robot companies also produce servo motors for their robots in-house, Yaskawa’s strategy has differed in that external sales of its servo technology to customers across various applications have served a central role for the company. As the company continues to take measures to adapt to the "Industry 4.0" trend and accentuates its strengths in its servo technology, we expect Yaskawa will continue to build on this approach to strengthen its motion-control/robotics businesses and its customization capability comprising its key products going forward.