Orix Corp Ads Q3 Earnings Call Highlights

Key Points

• Net income of JPY 389.7 billion for the nine months to Dec. 31, 2025 was up JPY 117.9 billion year‑over‑year, marking ORIX’s highest-ever third‑quarter cumulative profit and equal to 89% of its maintained full‑year forecast of JPY 440 billion.
• ORIX expanded its share buyback to JPY 150 billion and had repurchased JPY 128.1 billion (85%) by end‑January, while aiming to keep a full‑year payout ratio around 39% (roughly JPY 153 per share).
• Investment-segment profit doubled to JPY 261.4 billion driven by sales including Greenko and Ormat plus property disposals; ORIX reported JPY 196.6 billion in capital gains from divestments of JPY 790 billion and new investments of JPY 700 billion, with total assets up JPY 1.2594 trillion largely from Hilco consolidation.

Orix Corp Ads NYSE: IX reported net income of JPY 389.7 billion for the nine months ended December 31, 2025, an increase of JPY 117.9 billion from the same period a year earlier, according to management on the company’s third-quarter earnings call for the fiscal year ending March 2026. Operating officer Kazuki Yamamoto said the result marked the company’s highest-ever third-quarter cumulative net profit and represented 89% of ORIX’s revised full-year forecast of JPY 440 billion, which was raised at the time of the first-half results.

Pre-tax profit for the nine-month period came in at JPY 567.7 billion, up JPY 184.3 billion year-over-year. Yamamoto said profits increased across ORIX’s three categories—finance, operation, and investments—with particularly strong growth in the investments category. He added that pre-tax profit increased even excluding the large gain on the sale of Greenko shares and valuation gains on the remaining stake.

Shareholder returns and buyback progress

Yamamoto reiterated that ORIX expanded its share buyback program to JPY 150 billion (from JPY 100 billion) when it announced first-half results. By the end of January, the company had completed JPY 128.1 billion of repurchases, an 85% progress rate against the expanded program. He said ORIX planned to “make steady progress” toward completing the program.

Management also referenced a full-year payout ratio of 39% of net income per share, and Yamamoto said ORIX wanted to maintain that level. He noted the figure of roughly JPY 153 per share based on the JPY 440 billion net income forecast, with further details to be provided at fiscal year-end.

Segment and category performance highlights

Across the three categories described by ORIX, finance segment profit increased 8% year-over-year to JPY 145.5 billion (81% progress against the full-year forecast). Yamamoto attributed the rise to ORIX Life’s growth in investment income and higher finance revenues in Australia and Asia excluding Greater China.

Operation segment profit rose 17% to JPY 189.5 billion (79% progress). ORIX recorded a gain on partial sales of shares in Canara Robeco during the company’s IPO process, while airport concessions and real estate operations improved in the third quarter. The auto segment benefited from a robust used car market, and the ships business posted earnings aided by asset efficiency and synergies with Santoku Shipbuilding, acquired in the fiscal year ended March 2024.

Investment segment profit doubled to JPY 261.4 billion. Drivers cited included the sale of Greenko in the second quarter, the sale of Ormat (a geothermal power business) and property dispositions including Hotel Universal Port Vita, plus office buildings and rental condominiums. ORIX also cited improved profit contributions from domestic private equity investees.

Within ORIX’s 10-segment framework, management highlighted several areas:

• Corporate financial services and maintenance leasing: Segment profit increased 21% to JPY 80.2 billion, supported by a second-quarter profit on the sale of ORIX Asset Management and Loan Services Corporation and Nissay Leasing, as well as fee income from activities including operating lease investments. The automobile unit posted its highest-ever third-quarter profit, aided by pricing to offset higher costs and continued strong used-car sales.
• Real estate: Segment profit was JPY 56.9 billion. ORIX cited revenue growth from Hotel Universal Port Vita sales and inns/hotels operations, but profit declined year-over-year due to the absence of a prior-year large gain from the sale of Hundred Stay. Segment assets rose to JPY 1.2025 trillion, driven in part by investment progress in the Osaka Integrated Resort project and completion of logistics facilities.
• PE investment and concession: Segment profit rose 42% to JPY 94.0 billion. ORIX cited robust performance at domestic PE investees such as Toshiba and DHC, with equity earnings from Toshiba contributing significantly. Kansai International Airport benefited from higher passenger numbers, especially international flights, though management warned of potential downside next fiscal year due to China-related trends.
• Environment and energy: Segment profit rose by JPY 109.1 billion to JPY 122.2 billion, mainly reflecting gains from the sale of Greenko and valuation gains on the remaining stake, plus gains from selling Zeeklite and Ormat (ORIX said it fully divested Ormat in the third quarter). Management noted seasonal softness in domestic solar sales revenue in the third quarter, while retail electricity volumes and prices remained strong.
• Banking and credit: Segment profit slipped to JPY 19.9 billion as deposit funding costs rose ahead of asset yield improvements. ORIX said it booked losses from selling long-term bonds through the third quarter to improve the bond portfolio, emphasizing flexibility and financial soundness.

Capital recycling, new investments, and balance sheet changes

On capital recycling, ORIX reported JPY 196.6 billion in capital gains with divestment-related cash inflows, based on divestments totaling JPY 790 billion and new investments totaling JPY 700 billion during the nine-month period. Management highlighted new investments including the acquisition of Hilco Global (asset valuation), expanded investment in aircraft amid strong passenger demand, a first-quarter PE investment in capsule-toy store operator Luluarq, and a third-quarter tender offer for I-NET tied to ORIX’s “Pathways” strategic area focused on AI infrastructure and DX-related fields. ORIX also cited investments in AM Green convertible bonds and logistics facilities, and noted the announced formation of a domestic PE fund with the Qatar Investment Authority (with Luluarq and I-NET occurring before the fund launch).

ORIX said total assets increased by JPY 1.2594 trillion versus the prior year-end, with Yamamoto attributing the largest factor to consolidation of Hilco Global. Shareholders’ equity increased by JPY 495.2 billion, which included JPY 234.2 billion attributable to a reduction in insurance contract liabilities tied to a higher discount rate used in measurement, with the remainder primarily reflecting retained earnings accumulation. The shareholders’ equity ratio was 25.3%.

Management also discussed an update to the employed capital ratio model in the third quarter, saying risk ratios are now defined at more precise business and unit levels. ORIX said the employed capital ratio remained around 90% and that a roughly 10% buffer was present.

Management commentary on inbound tourism and risks

In discussing inbound trends, ORIX said Kansai Airports earnings are reflected in ORIX’s consolidated results with a three-month lag. Management said Chinese passenger numbers had declined about 40% year-over-year since December (as referenced in the call), and noted that major Chinese airlines had extended deadlines allowing free cancellations for Japan-bound tickets. ORIX said it expected downward pressure on earnings “for the time being,” though it characterized its inbound-related businesses as “well-balanced” overall, citing steady passenger traffic from Europe and the U.S. in aviation.

During Q&A, management addressed ORIX USA credit costs and valuation gains, noting that valuation gains in ORIX Capital Partners were driven by EBITDA growth at investees and that the company was considering exits. ORIX also said it was executing a “100-day plan” following the Hilco Global acquisition and intended to explain its broader U.S. business rebuild and plan at a future earnings call.

ORIX maintained its full-year net income forecast at JPY 440 billion, with Yamamoto saying the company would continue “timely and appropriate actions as needed” while formulating its business plan and evaluating outlook and capital efficiency going into the fourth quarter and beyond.

About Orix Corp Ads NYSE: IX

ORIX Corporation ADS NYSE: IX is the American depositary share listing of ORIX Corporation, a diversified financial services group headquartered in Tokyo, Japan. The company operates across multiple business lines that include leasing and lending, real estate, investment and asset management, and a range of retail and corporate financial services. ORIX's ADS program allows U.S. investors to access ownership in the Tokyo-based group through shares traded on the New York Stock Exchange.

Core activities include equipment leasing and installment financing for corporate customers, corporate lending and structured finance, and real estate development and property management.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.