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KDDI Corporation (KDDIY)
OTHER OTC:KDDIY
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KDDI
(OTC:KDDIY)
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Rating:72Outperform
Price Target:
$19.00
â–²(8.20% Upside)
KDDI's overall stock score reflects strong earnings call performance and positive technical indicators, offset by mixed financial performance and fair valuation. The company's strategic initiatives in the mobile segment are promising, but revenue decline and leverage warrant caution.
Positive Factors
Mobile Business Growth
The growth in the mobile segment indicates strong market demand and effective strategic initiatives, which are crucial for long-term revenue stability and expansion.
Operational Improvements
Significant improvements in operational efficiency suggest enhanced profitability and cost management, supporting sustainable financial health.
Network and Service Enhancements
Leading user experience metrics and new service introductions enhance customer satisfaction and retention, strengthening competitive positioning.
Negative Factors
Revenue Decline
The substantial revenue drop poses a risk to long-term growth and market share, necessitating strategic adjustments to reverse this trend.
Increased Leverage
Rising leverage can limit financial flexibility and increase risk, potentially impacting future investment and growth opportunities.
Cash Flow Challenges
Negative cash flow growth indicates pressure on cash generation, which could affect the company's ability to fund operations and investments sustainably.
KDDI (KDDIY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$63.71B
Dividend Yield2.38%
Average Volume (3M)68.90K
Price to Earnings (P/E)13.9
Beta (1Y)0.13
Revenue Growth4.04%
EPS Growth85.18%
CountryUS
Employees61,288
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.35
Shares Outstanding4,187,847,700
10 Day Avg. Volume0
30 Day Avg. Volume68,904
Financial Highlights & Ratios
PEG Ratio2.25
Price to Book (P/B)3.73
Price to Sales (P/S)3.23
P/FCF Ratio19.96
Enterprise Value/Market Cap226.19
Enterprise Value/Revenue3.12
Enterprise Value/Gross Profit7.50
Enterprise Value/Ebitda10.51
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
KDDI Business Overview & Revenue Model
Company DescriptionKDDI Corporation (KDDIY) is a leading telecommunications and information technology company based in Japan. It operates primarily in the mobile communications sector, offering a range of services including mobile voice, data communications, and fixed-line services. KDDI is well-known for its flagship brand, au, which provides mobile services to millions of customers. Additionally, the company is involved in various sectors, including cloud services, IoT solutions, and content distribution, catering to both individual consumers and enterprise clients.
How the Company Makes MoneyKDDI generates revenue primarily through its mobile telecommunications services, which include voice and data plans for individual and corporate customers. The company also earns significant income from fixed-line services and broadband internet subscriptions. Another key revenue stream comes from its enterprise solutions, including cloud computing and IoT services, which cater to businesses looking for technological support. KDDI has formed strategic partnerships with various technology and content providers, enabling it to enhance its service offerings and create additional revenue opportunities. Moreover, the company benefits from selling devices and accessories, as well as from advertising and content services through its digital platforms.
KDDI Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q2-2026)
| % Change Since: |
Next Earnings Date:Jul 31, 2026
Earnings Call Sentiment Neutral
KDDI demonstrated solid financial growth and improvements in the mobile segment, supported by strategic price revisions and network enhancements. However, the company faces challenges in its Finance and DX segments and competitive pressures in the market. While there are positive signs of growth, the balance of high and low points results in a sentiment that is not overwhelmingly positive.Q2-2026 Updates
Positive Updates
Revenue and Profit Growth
KDDI reported an operating revenue of JPY 2,963.2 billion, a 3.8% increase year-on-year, and an operating income of JPY 577.2 billion, up 0.7% year-on-year. Net income rose by 7.6% to JPY 377.7 billion.
Mobile Business Growth
The mobile segment experienced a revenue increase of JPY 11.1 billion year-over-year, with a significant acceleration in the second half expected to exceed JPY 19 billion.
Operational Improvements
Quarterly operating profit increased by 11.8% and quarterly profit grew by 20.7%. The effects of price revisions became apparent, contributing to solid growth.
Network and Service Enhancements
KDDI achieved #1 in Japan for user experience according to OpenSignal. The introduction of 'au Starlink Direct' and 'au 5G Lane' are enhancing connectivity and customer experience.
Negative Updates
Challenges in Finance and DX Segments
Finance and DX segments face challenges due to changes in the business environment, requiring strategic shifts to address these issues.
Competitive Pressures
KDDI is dealing with intense competition, impacting promotional expenses and necessitating a focus on product capabilities rather than head-on competitive spending.
Roaming and Stakeholder Costs
Roaming and stakeholder benefit sharing costs are impacting profit, though the exact impact is not clearly quantified.
Company Guidance
During KDDI's earnings call for the second quarter of the fiscal year ending March 2026, President Hiromichi Matsuda provided a detailed overview of the company's financial performance and strategic initiatives. KDDI reported a 3.8% year-over-year increase in operating revenue to JPY 2,963.2 billion, achieving 46.8% of the full-year forecast. Operating income rose by 0.7% to JPY 577.2 billion, with a progress rate of 49%, while net income surged by 7.6% to JPY 377.7 billion, reaching a progress rate of 50.5%. The second quarter alone showed strong year-over-year growth, with operating revenue up 4.1%, operating income up 2.9%, and net income up 18.6%. Matsuda highlighted the impact of price revisions and structural reforms in the mobile business, which contributed to a quarterly operating revenue increase of 6.3% and a quarterly operating profit rise of 11.8%, alongside a 20.7% profit growth during the quarter. Key areas of focus for the second half include accelerating growth in the mobile business, targeting a JPY 19 billion year-over-year increase, and achieving a JPY 30 billion profit increase in focal areas such as Finance and DX. Matsuda also emphasized KDDI's commitment to value creation through technological innovation, effective capital allocation, and strategic partnerships, particularly in the AI and telecom infrastructure domains. The company is optimistic about further reducing churn rates and driving ARPU growth, supported by ongoing structural reforms and enhancements in connectivity and customer experience.KDDI Financial Statement Overview
Summary
KDDI's financial performance is mixed. While profitability and margins are strong, a significant revenue decline of 32.08% and increased leverage are concerning. Cash flow generation is under pressure, though cash conversion remains reasonable.Income Statement
KDDI's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a significant revenue decline of 32.08%, which is concerning. However, the company maintains healthy margins with a gross profit margin of 41.97% and a net profit margin of 11.82%. The EBIT and EBITDA margins are stable at 18.44% and 29.86%, respectively. Despite the revenue drop, profitability remains strong, but the declining revenue trend poses a risk.65
Positive
Balance Sheet
The balance sheet reflects a moderate financial position. The debt-to-equity ratio has increased to 1.09 in the TTM, indicating higher leverage, which could be a risk if not managed properly. However, the return on equity remains solid at 13.97%, suggesting effective use of equity. The equity ratio is stable, indicating a balanced asset structure. Overall, the balance sheet shows stability but with increased leverage.70
Positive
Cash Flow
Cash flow analysis reveals some challenges. The free cash flow growth rate is negative at -15.05% in the TTM, indicating reduced cash generation. The operating cash flow to net income ratio is 0.14, suggesting moderate cash flow efficiency. The free cash flow to net income ratio is 0.72, reflecting decent cash conversion. While cash flow generation is under pressure, the company maintains a reasonable cash conversion rate.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2023 | Dec 2023 | Dec 2023 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.63T | 5.92T | 5.75T | 5.75T | 5.75T | 5.75T |
| Gross Profit | 1.92T | 2.51T | 2.43T | 2.43T | 2.43T | 2.43T |
| EBITDA | 1.37T | 1.78T | 1.62T | 1.62T | 1.62T | 1.62T |
| Net Income | 545.86B | 685.68B | 637.87B | 637.87B | 637.87B | 637.87B |
Balance Sheet | ||||||
| Total Assets | 18.02T | 16.88T | 14.15T | 14.15T | 14.15T | 14.15T |
| Cash, Cash Equivalents and Short-Term Investments | 1.49T | 921.17B | 887.21B | 887.21B | 887.21B | 887.21B |
| Total Debt | 5.40T | 4.55T | 2.43T | 2.43T | 2.43T | 2.43T |
| Total Liabilities | 12.54T | 11.23T | 8.35T | 8.35T | 8.35T | 8.35T |
| Stockholders Equity | 4.97T | 5.13T | 5.25T | 5.25T | 5.25T | 5.25T |
Cash Flow | ||||||
| Free Cash Flow | 1.04T | 958.47B | 956.97B | 956.97B | 956.97B | 956.97B |
| Operating Cash Flow | 1.41T | 1.36T | 1.71T | 1.71T | 1.71T | 1.71T |
| Investing Cash Flow | -1.05T | -1.18T | -832.43B | -832.43B | -832.43B | -832.43B |
| Financing Cash Flow | -554.47B | -33.55B | -476.48B | -476.48B | -476.48B | -476.48B |
KDDI Technical Analysis
Negative
17.56
Price Trends
17.18
Negative
16.73
Positive
16.99
Negative
Market Momentum
-0.06
Positive
45.84
Neutral
48.87
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KDDIY, the sentiment is Negative. The current price of 17.56 is above the 20-day moving average (MA) of 17.05, above the 50-day MA of 17.18, and above the 200-day MA of 16.99, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 45.84 is Neutral, neither overbought nor oversold. The STOCH value of 48.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KDDIY.
KDDI Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $32.78B | 26.53 | 10.10% | 3.15% | 5.74% | 7.12% | |
75 Outperform | $21.26B | 15.65 | 15.54% | 6.14% | -5.21% | -7.45% | |
72 Outperform | $63.71B | 13.94 | 13.75% | 2.38% | 4.04% | 85.18% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
60 Neutral | $63.12B | 16.72 | 17.70% | 2.69% | 1.14% | 83.48% | |
58 Neutral | $34.43B | -8.00 | -7.08% | 3.77% | 19.67% | -278.51% |
* Communication Services Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.