SK Hynix Reports Record Quarterly Revenue Above 100 Trillion Won, Unveils 100 Trillion Won Shareholder Return Plan

SK hynix reported record third-quarter revenue and operating profit, with sales exceeding 100 trillion won for the first time in the company's history, according to the company's third-quarter earnings release. The South Korean memory chipmaker's Board of Directors also resolved to pursue total shareholder returns of approximately 100 trillion won for fiscal year 2026, a plan that includes a special dividend tied to gains from its investment in Kioxia.

Record Revenue, Profit and Margins

SK hynix recorded 104.6155 trillion won in revenue, 83.3338 trillion won in operating profit, reflecting an 80% operating margin, and 39.7756 trillion won in net profit, a 38% net margin, for the third quarter, the company said. Revenue and operating profit rose 32% and 38%, respectively, from the previous quarter, per SK hynix's official figures. CNBC calculated slightly more precise quarter-on-quarter gains of 31.9% for revenue and 37.6% for operating profit, and reported year-on-year increases of 327.9% for revenue and 632.1% for operating profit.

The results beat expectations compiled by LSEG SmartEstimates, which are weighted toward analysts who are more consistently accurate, according to CNBC. Those estimates had forecast revenue of 98.34 trillion won and operating profit of 76.72 trillion won, versus the 104.62 trillion won and 83.33 trillion won SK hynix actually reported, per CNBC's comparison table.

SK hynix noted that the reported third-quarter figures are preliminary, have not been finalized through audit review, and are subject to change during the independent auditing process.

100 Trillion Won Shareholder Return Plan

For fiscal year 2026, SK hynix said it will pursue shareholder returns totaling approximately 100 trillion won, comprising cash dividends of 30 trillion won or more and share repurchases and cancellations of 60 trillion won or more in total, including the 40 trillion won announced in August, the company said.

At its board meeting, SK hynix resolved on a third-quarter cash dividend of 14 trillion won and a share repurchase of 20 trillion won. The quarterly dividend amounts to 20,000 won per share, made up of a 10,000-won dividend reflecting improved earnings and a 10,000-won special dividend sharing gains from the company's Kioxia investment, according to SK hynix. The company said it has decided to return to shareholders most of the gains realized from its Kioxia investment this year.

Separately, SK hynix said it plans to raise its shareholder return target to more than 50% of cumulative free cash flow generated between 2025 and 2027, as it expects AI investment momentum to continue amid greater adoption of AI services and a more diverse investor base, per CNBC's reporting. SK hynix framed this as fulfilling its commitment to return 50% or more of free cash flow.

Market Reaction

SK Hynix shares closed 10.89% higher on the day the results were released, outpacing the benchmark Kospi index, which closed 6.63% higher the same day, according to CNBC. That puts the stock's one-day gain 4.26 percentage points ahead of the index (10.89 minus 6.63) — a calculation based on CNBC's reported closing figures, not an independent market assessment.

Balance Sheet and Capacity Commitments

At the end of the third quarter, cash and cash equivalents stood at 114.5 trillion won, up 26.5 trillion won from the previous quarter, while borrowings decreased by 2.8 trillion won to 15.8 trillion won, SK hynix said. As a result, net cash increased to 98.7 trillion won, according to the company.

SK hynix also said it has secured long-term agreements with 14 major customers covering more than 50% of its total production capacity for 2027 and 2028. The company said it expects memory demand to outpace supply through 2030, citing the technical difficulty of leading-edge processes and the long lead time required to build new production facilities, and plans to significantly increase investment next year, per CNBC's summary of the company's remarks.

HBM4 Ramp and Solidigm Decision

SK hynix said it expects its HBM4 memory product to surpass HBM3E in both shipment volume and revenue in the fourth quarter as it ramps up production at its M15X facility in Cheongju, South Korea, with the company aiming to establish HBM4 as a mainstream product.

The company also disclosed that it has discontinued its review of a potential initial public offering or pre-IPO fundraising for its U.S. subsidiary Solidigm, saying Solidigm concluded an IPO would not fully deliver the anticipated benefits at this time.

Analyst Commentary

Mehdi Hosseini, senior equity research analyst at Susquehanna International Group, reiterated a neutral rating on SK Hynix following the earnings release, telling CNBC he preferred Micron and Samsung Electronics over the South Korean chipmaker. Hosseini cited Micron's more diversified memory portfolio and Samsung's foundry business as offering a better risk-reward profile, according to CNBC.

Hosseini added that SK Hynix shares were undervalued and that he preferred the company's U.S.-traded American depositary receipts over its South Korean-listed shares, citing the larger pool of potential investors in the U.S., per CNBC's report. This view represents one analyst's opinion as reported by CNBC and is not a consensus forecast or price target.

Bottom Line

SK hynix's third quarter marked a milestone, with revenue crossing 100 trillion won for the first time and an 80% operating margin, according to the company's earnings release. The roughly 100 trillion won shareholder return plan for fiscal 2026, anchored by the regular and Kioxia-linked special dividends alongside share repurchases and cancellations, suggests the company is directing a sizable share of its AI-driven memory earnings back to investors — an interpretation drawn from the reported dividend, buyback and net cash figures — while it also says it plans to significantly increase investment next year and has secured long-term agreements covering more than half of its 2027 and 2028 production capacity. Whether the demand-above-supply conditions the company projects through 2030 materialize remains to be seen in subsequent quarters.