KDDI Corp Reports 9‑Month Profit Upswing Amid Investigation
KDDI Corp. (ticker 9433.T) disclosed its financial results for the first nine months of the fiscal year ending March 31, 2026, on Friday. The Japanese telecom operator posted a 5.3 % increase in profit attributable to owners of the parent, rising to ¥554 billion from ¥525.9 billion a year earlier. Operating income followed suit, climbing 2 % to ¥871.3 billion versus ¥853.9 billion previously. Revenue for the period grew 3.8 % to ¥4.47 trillion, up from ¥4.31 trillion in the comparable 2025 timeframe.
Investigation into Fictitious Transactions
The earnings lift comes after the company accounted for adjustments related to fictitious transactions uncovered in the advertising‑agency arm of its subsidiaries, KDDI BIGLOBE Inc. and G‑PLAN Inc.. The Special Investigation Committee, convened by the board, has identified suspicious transactions conducted by employees of the subsidiaries. KDDI’s management has taken steps to provision for externally flowed amounts linked to the fictitious dealings, resulting in a post‑adjustment profit of ¥536.9 billion and an operating income of ¥854.3 billion. The company maintains that the adjustments do not materially alter its underlying business performance and that remedial controls are being implemented.
Market Reaction and Outlook
The market has responded cautiously. KDDI shares closed at ¥2,785 on February 4, 2026, comfortably within the 52‑week high of ¥2,827. With a price‑to‑earnings ratio of 15.3, the stock remains reasonably valued relative to its peers in the wireless telecommunications sector. Analysts expect the company to continue benefiting from Japan’s robust demand for mobile services and broadband connectivity, while the regulatory scrutiny surrounding the subsidiaries may exert short‑term pressure on earnings.
Strategic Implications
- Revenue Growth – A 3.8 % rise in operating revenue signals steady demand for KDDI’s mobile and broadband offerings amid a competitive market that includes SoftBank and NTT.
- Profit Resilience – Despite the investigation, the company’s operating margin improved marginally, indicating operational resilience.
- Risk Management – The board’s proactive disclosure and provision for the fictitious transactions demonstrate a commitment to governance, potentially restoring investor confidence.
Forward‑Looking Perspective
KDDI’s focus on expanding its mobile ecosystem, coupled with ongoing investment in network infrastructure, positions the company to capture incremental market share. The firm’s substantial market capitalization of ¥10.85 trillion underlines its scale and capacity for strategic initiatives. While the investigation introduces a degree of uncertainty, the company’s financial fundamentals remain solid, and its trajectory of moderate revenue growth and disciplined cost management suggests continued shareholder value creation in the medium term.
