IX — ORIX Corporation

Summary of ORIX Q3 2026 Earnings Call

1. Key Financial Results and Metrics

• Net Income: JPY 389.7 billion for the nine-month period, up JPY 117.9 billion year-over-year, marking the highest third-quarter cumulative net profit.
• Pretax Profits: JPY 567.7 billion, an increase of JPY 184.3 billion year-over-year, with growth across finance, operations, and investments.
• Segment Performance:
  • Finance: Profits increased 8% to JPY 145.5 billion.
  • Operations: Profits grew 17% to JPY 189.5 billion, aided by gains from Canara Robeco's IPO and strong auto segment performance.
  • Investments: Profits surged 100% to JPY 261.4 billion, driven by significant gains from Greenko and Ormat sales.
• Share Buyback Program: Expanded from JPY 100 billion to JPY 150 billion, with JPY 128.1 billion completed by the end of January.

2. Strategic Updates and Business Highlights

• Capital Recycling: JPY 196.6 billion in capital gains with cash inflows from divestments totaling JPY 790 billion against JPY 700 billion in new investments.
• New Investments: Focus on operations and investments, including the acquisition of Hilco Global and expansion in aircraft investments.
• Organizational Restructuring: Announced reforms to consolidate 10 segments into 3 business divisions, although current results are still reported under the existing framework.

3. Forward Guidance and Outlook

• Full-Year Forecast: No changes to the full-year net income forecast of JPY 440 billion, with expectations for continued growth in the fourth quarter.
• Market Conditions: Anticipation of stronger domestic economic growth and ongoing scrutiny of investment opportunities to enhance capital efficiency.

4. Bad News, Challenges, or Points of Concern

• Impact of Chinese Tourism: A 40% decline in Chinese passenger numbers at Kansai International Airport is expected to exert downward pressure on earnings.
• Credit Costs: Rising interest rates and credit losses, particularly in ORIX USA, are areas of concern, with ongoing evaluations to manage risks.
• Market Volatility: Uncertainty in the semiconductor market and potential impacts from geopolitical factors may affect future performance.

5. Notable Q&A Insights

• ORIX USA Performance: Analysts sought clarification on the impact of closed funds and the integration of Hilco Global, with management indicating a focus on improving collaboration and business plans.
• Investment Strategy: Management emphasized a cautious approach to new investments, particularly in the U.S. and China, while remaining open to high-quality opportunities.
• Future Planning: There is a commitment to enhancing ROE and capital efficiency, with discussions ongoing about the strategic direction for the next fiscal year.

Overall, ORIX reported strong financial results for Q3 2026, driven by robust performance across its segments, while also addressing challenges related to market conditions and tourism impacts. The company remains focused on strategic investments and maintaining a solid growth outlook despite potential headwinds.