SK hynix Q3 2026 Beat: ₩83.3T Operating Profit Tops ₩77T Consensus at an 80% Margin, Plus a ₩100T Return Plan
SK hynix Q3 2026 Beat: ₩83.3T Operating Profit Tops ₩77T Consensus at an 80% Margin, Plus a ₩100T Return Plan
📌 SK hynix 3Q26 at a Glance
All three cards are company-disclosed. Results are preliminary K-IFRS consolidated figures and have not been audited. Consensus = FnGuide, as reported by Maeil Business and Hankyung.
Yesterday we argued the market would care more about the slope of the cycle than the Q3 level. The print delivered on both. SK hynix reported Q3 2026 revenue of ₩104.62 trillion and operating profit of ₩83.33 trillion on Wednesday, Oct 28. Both figures are well above consensus. The company also said long-term agreements now cover more than half of its 2027–2028 capacity, and it set out a roughly ₩100 trillion shareholder-return plan for 2026. The weak spot was net profit, and the reason matters.
1. What Happened: The Reported Facts
Reported FactsAccording to SK hynix's 3Q26 release, revenue rose 32% QoQ and 328% YoY to ₩104.6155T, operating profit rose 38% QoQ and 632% YoY to ₩83.3338T, and the operating margin was 80% (76% in Q2). Net profit was ₩39.7756T, down 58% from Q2's ₩93.92T. The KRX filing (08:27 KST, via Seoul Economic Daily) puts nine-month operating profit at ₩181.49T, versus ₩47.21T for all of FY2025.
- Drivers (company): server DDR5 sales rose sharply, HBM4 shipments "began in earnest" and 321-layer TLC eSSD sales expanded. Per investingLive, DRAM average selling prices rose by a high-20% rate QoQ and NAND prices by a mid-20% rate.
- Balance sheet: Cash and equivalents reached ₩114.5T (+₩26.5T QoQ) and borrowings fell to ₩15.8T, giving net cash of ₩98.7T.
- Contracts: LTAs with 14 major customers, including global cloud providers, cover more than 50% of 2027 and 2028 capacity. Pricing floats within an agreed range; terms typically run five years.
- Outlook (company view): HBM4 should overtake HBM3E in both shipments and revenue in Q4 as the M15X fab ramps to full capacity by year-end. The company sees demand exceeding supply through 2030 and investment rising "significantly" next year with Yongin Phase 1.
Chart: SK hynix quarterly revenue and operating profit (KRW trillion). Dashed lines = Q3'26 FnGuide consensus; Q1'26 derived by us from the nine-month filing. Sources: SK hynix releases (Jan 28, Oct 28); KRX filing.
2. Actual vs. Consensus: The Matrix
Two consensus sets circulated: FnGuide (cited yesterday) and LSEG SmartEstimates (CNBC). "Derived" rows are our arithmetic.
| Metric (KRW) | Q3'26 actual | FnGuide consensus | LSEG SmartEstimate | Q2'26 actual |
|---|---|---|---|---|
| Revenue | ₩104.62T | ₩98.23T | ₩98.34T | ₩79.32T |
| Operating profit | ₩83.33T | ₩76.96T | ₩76.72T | ₩60.54T |
| OP beat (derived) | — | +₩6.37T / +8.3% | +₩6.61T / +8.6% | — |
| Revenue beat (derived) | — | +₩6.39T / +6.5% | +₩6.28T / +6.4% | — |
| Operating margin | 80% | ~78.4% (derived) | — | 76% |
| Net profit | ₩39.78T | — | ~₩55T (per investingLive) | ₩93.92T |
Sources: SK hynix 3Q26 release (Oct 28); FnGuide via Maeil Business/Hankyung (Oct 28); LSEG via CNBC (Oct 28); net-profit estimate via investingLive (Oct 28), which did not name the provider. Beats and the consensus-implied margin are our calculations.
Reported FactsPre-tax profit from continuing operations was ₩50.71T (KRX filing), about ₩32.6T below operating profit (our arithmetic). The release does not break out that non-operating line. In August, BNK Investment & Securities noted that SK hynix had booked ₩63.3T of valuation gains on investment assets such as its Kioxia stake in Q2. BNK warned those gains were "highly likely" to reverse into valuation losses in Q3 (ChosunBiz, Aug 18). Separately, the company said it realized gains on the Kioxia investment this year and will pay most of them out as special dividends.
Reported FactsFor FY2026 the company targets cash dividends of ₩30T or more and buybacks and cancellations of ₩60T or more, including August's ₩40T, which it says fulfils its pledge to return at least 50% of FCF. The Q3 dividend totals ₩14.1034T, a 1.56% yield on the board's reference price (Seoul Economic Daily). The Kioxia special dividend will be paid in two instalments, in Q3 and at year-end (Herald Business). Buybacks will continue every quarter. Only the ₩10T cancellation tranche of the new buyback counts toward the return total.
💡 Market Analyst Takeaway
AnalysisThe operating beat matters less than the contract coverage. Before the print, Korean brokers framed the stock as a referendum on 2027–2028 demand (Kiwoom, via Newspim). More than half of 2027–28 capacity under range-priced LTAs, plus the company's call for a shortage through 2030, speaks directly to that worry. A price band also limits upside if spot prices keep rising, so it works as visibility rather than a free option.
AnalysisOn returns, ₩40T plus the new ₩10T cancellation tranche comes to ₩50T against a "₩60T or more" target. By our arithmetic, at least ₩10T of cancellable buybacks remain for the rest of FY2026. For scale, the ~₩100T headline compares with ₩98.7T of end-Q3 net cash, so delivering the rest depends on Q4 cash flow and next year's larger capex, which the company has not quantified. We would treat the net-profit gap as mostly non-operating, pending the audited breakdown. That is an inference, not a company statement.
3. Market Reaction and What Comes Next
- Pre-market tone: At 08:30 KST on the Nextrade venue, SK hynix traded at ₩1,397,000 (+4.18%) after touching ₩1,415,000, and Samsung Electronics was up 3.83% (Money Today). The stock closed Oct 27 at ₩1,341,000 (+5.18%), when the KOSPI rose 3.09% (Yonhap). Regular-session moves after 09:00 KST were not available at the time of writing.
- Samsung, Oct 29 at 10:00 KST: Samsung's full results and call follow tomorrow, after its Oct 8 guidance of about ₩107.4T in operating profit. SK hynix's LTA disclosure gives investors a benchmark for Samsung's commentary on 2027 contracts and HBM4.
- 2027 demand: SK hynix expects DRAM demand to grow by a mid-20% rate and NAND demand by a high-teens rate in 2027 (investingLive). These are company projections.
- Open items: audited non-operating detail, the 2027 capex number, and the timing of the ₩40T cancellation. Yesterday's filings reported Nov 5 for 23.69M shares.
Related coverage: our Q3 earnings-week preview (₩77T consensus), the ₩40T buyback and FCF return floor, and SK hynix and the Kioxia stake.
Read the 3Q26 Release at the Source
Release, presentation and call materials are on the official IR sites.
🔍 SK hynix Official IR: 3Q26 Earnings Release 🔍 Samsung Electronics Official IR: 3Q26 Call (Oct 29)
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