Foxconn Announces Q1 2026 Financial Results; Net Profit up 19% YoY

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Hon Hai Technology Group (Foxconn) announced its first quarter 2026 financial results:

Revenue reached a record high of NT$2.12 trillion in the January-March period, while net profit attributable to the parent company totaled NT$49.9 billion, increasing NT$7.8 billion or 19% from the same period a year ago. Earnings per share in the first quarter hit NT$3.56. Looking ahead to the second quarter, although it is traditionally a slow season for the ICT industry, the Group expects to maintain an uptrend due to strong AI demand, with significant quarter-on-quarter growth and strong year-on-year growth. The full-year outlook remains unchanged, maintaining strong growth and providing greater visibility.

In the first quarter of 2026, revenue reached NT$2.12 trillion, a year-on-year increase of 29%; gross profit was NT$131 billion, up 30%; operating profit was NT$75.6 billion, surging 63%; and net profit (attributable to the parent company's owners) was NT$49.9 billion, rising 19%. The gross profit margin, operating profit margin, and net profit margin were 6.18%, 3.57%, and 2.36%, respectively, compared with 6.11%, 2.83%, and 2.56% in the same period last year, showing an increase in both gross profit margin and operating profit margin. EPS reached NT$3.56, an increase of NT$0.53 compared with NT$3.03 in the same period last year.

Faced with sustained, strong demand for the Group’s AI business, Foxconn Rotating CEO Michael Chiang said that with the ICT industry entering the traditional off-season in the first quarter, coupled with rapid growth in AI server demand, the Cloud and Networking product segment now accounts for nearly 50% of revenue. This demonstrates that the Group’s AI strategy has already brought about a structural transformation, helping to mitigate the seasonality of the ICT industry. At the same time, with a more diversified AI customer base, the Group’s product portfolio has become more balanced.

Looking ahead to the Group’s second quarter performance, although the quarter is traditionally a slow season for the ICT industry, expectations are for maintaining an uptrend, with significant growth quarter-on-quarter and strong growth year-on-year, thanks to strong AI demand. The full-year outlook for strong growth remains unchanged. Visibility is higher.

The Group's main product segments are Cloud and Networking, and Smart Consumer Electronics. In terms of the former, strong growth is expected both on a quarterly and yearly basis. In terms of the latter, with overall demand better than last year, significant growth is expected.

During the investor call, the Group shared how it is building a moat through a sound financial constitution, while at the same time expanding investment and spending. Last year, capital expenditures increased about 27% on-year to NT$174 billion, and should rise more than 30% this year. The investments are primarily focused on regional manufacturing deployment, automation implementation, and upgrade of core capacity.

Taking the first quarter as an example, the Group’s EBITDA rose to NT$102.4 billion. This indicates that as the Group actively invests in future growth, its overall financial health is staying robust. Capex is gradually translating into revenue and profit growth ahead.

In addition, in terms of enhancing corporate value, the Group’s ROE for the first quarter reached 2.88%, representing a clear improvement compared to the same period over the past two years. This reflects ongoing progress in optimizing the Group’s profitability structure and operational efficiency. As AI-related business grows, as well as benefits materialize from a global footprint and vertical integration, there is further upside potential for ROE.

Regarding recent market focus on co-packaged optics (CPO), rotating CEO Chiang said that CPO switches are scheduled to enter mass production in the third quarter, with annual shipments expected to reach tens of thousands of units. Based on current visibility, shipments are projected to grow multi-fold next year.

CPO and 1.6T high-end switch products are currently being developed and prepared for mass production in cooperation with major cloud and AI data center customers, with shipments expected to begin in the third quarter. In addition to switch design and assembly, the Group continues to strengthen its capabilities in key components such as optical modules, optoelectronic integration, cables, connectors, high-speed transmission, and power management. By increasing the proportion of in-house production and integration, the Group aims to further enhance system performance, delivery efficiency, and supply chain control.

For AI rack shipments, the Group expects to keep high double-digit growth in the second quarter. For the full year, AI rack shipments are projected to more than double, with quarterly volumes increasing sequentially as customer projects progress. In the area of high-speed switches above 800G, driven by growing demand for high-speed networking architectures in AI data centers, related product shipments and revenue this year also have the potential to double.

In robotics, one of the key areas in the Group’s “3+3+3” strategy, humanoid robots and collaborative robots have already been introduced in US manufacturing sites in the second quarter. Operational data will be collected to support subsequent model optimization and large-scale deployment. In Smart City, the Group continues to deepen collaboration with local governments and partners, while promoting the export of integrated solutions, aiming to replicate successful experiences across more countries and cities.

Lastly, in next-generation communications, the second-generation “PEARL” – Foxconn’s low Earth orbit (LEO) satellites – successfully launched on May 3 aboard a SpaceX Falcon 9 rocket, entering their designated orbit.

While the first-generation satellites focused on satellite-to-ground communication experiments and system validation, the latest in orbit are equipped with Ka-band inter-satellite link (ISL) payloads. The two satellites will not only enable broadband communication between satellites and ground stations, but also validate inter-satellite communication between each other.

Following the successful launch of the second-generation satellites, the Group will continue to accelerate its expansion in the space sector, focusing on diverse application scenarios such as mobile communication supplements, direct-to-device satellite connectivity, and connectivity in remote areas, further expanding opportunities in LEO satellite technology and smart communications integration.