Foxconn posts record Q3 profit of NT$57.7B on AI server demand

Foxconn reported Q3 net profit of NT$57.7 billion, up 17% year-on-year, as AI server demand drove record quarterly earnings across gross, operating, and net lines.

"The AI industry continues to expand at a rapid pace, driven by strong computing power demand and the mass production of new AI server racks," James Wu, Foxconn spokesperson, said.

Revenue reached NT$2.06 trillion, up 11% from a year earlier and 15% from the second quarter. Gross profit rose 14% to NT$130.8 billion, operating profit climbed 29% to NT$70.5 billion, and net profit gained 17% to NT$57.7 billion. Compared with the second quarter, gross profit, operating profit, and net profit rose 15%, 25%, and 30%, respectively. EPS of NT$4.15 compared with NT$3.55 in the same period last year and NT$3.19 in the second quarter. Gross margin, operating margin, and net margin reached 6.35%, 3.43%, and 2.80%, respectively, all improving year-on-year.

Q3 AI server rack shipments grew 300% quarter-on-quarter, pushing cumulative AI server revenue to the NT$1 trillion scale ahead of schedule. Chairman Young Liu maintained the significant growth view for the full year and offered an optimistic outlook for 2026, citing AI industry development as the most positive factor.

For the first nine months, revenue totaled NT$5.5 trillion, up 16% year-on-year. Net profit rose 35% to NT$144.1 billion, with EPS of NT$10.38 versus NT$7.67 a year earlier. Operating profit jumped 28% to NT$173.6 billion, while gross margin, operating margin, and net margin reached 6.27%, 3.16%, and 2.62%, respectively.

Cloud and networking products remained the largest revenue contributor at 42% of total, up from 41% in the prior quarter, driven by strong AI server growth. Smart consumer electronics rose to 37% from 35% as the business entered peak season. Liu revised the full-year outlook for smart consumer electronics to flat from a previous view for a slight decline.

Wu said fourth-quarter shipments of new AI server racks are expected to sustain double-digit sequential growth. According to market projections, the top five U.S. cloud service providers are expected to invest nearly US$600 billion in capital expenditure in 2026. Foxconn anticipates its AI server market share to rise above the current 40% level in 2026. The company, collaborating with Nvidia to build a supercomputing center, has become the first Nvidia Cloud Partner in Taiwan.

In electric vehicles, Foxconn brought in Mitsubishi Fuso as its second Japanese automaker customer, jointly developing zero-emission buses based on the MODEL T and MODEL U platforms. The company is also collaborating with Stellantis, Nvidia, and Uber on Level 4 autonomous driving technologies. Subsidiary FIT's joint venture with Saudi Arabia, Smart Mobility, is expected to start construction on an EV charging station manufacturing base in the Middle East before year-end, with production starting as early as 2026.

The results point to management's expectation that AI demand will accelerate through 2026. Investors will watch the HHTD25 technology conference on November 21-22 for further details on the group's AI strategy across its three smart platforms.

This article is for informational purposes only and does not constitute investment advice.