Toyota reported its Q2 FY2026 earnings for the six months ended September 30 2025, posting revenue of $79.45 billion and earnings per share of $5.36, both in line with consensus estimates. The company also raised its full‑year outlook, projecting sales revenue of JPY 49 trillion and operating income of JPY 3.4 trillion, up from the prior guidance of JPY 48 trillion and JPY 3.2 trillion, respectively.
Revenue growth was driven by a 5 % year‑over‑year increase in vehicle sales, with electrified models—particularly hybrids—accounting for 46.9 % of total sales. Strong demand in Japan and North America offset modest declines in legacy gasoline‑powered models, while the company’s diversified geographic mix helped cushion the impact of U.S. tariffs. The tariff cost is estimated at JPY 1.45 trillion for the full year, a headwind that the company has managed through cost‑control initiatives and pricing adjustments.
Operating income rose to JPY 3.4 trillion, reflecting tighter cost discipline and a favorable product mix. The company’s CFO, Kenta Kon, noted that earnings are now more diversified across regions and less dependent on North America than a decade ago, with gains from other markets helping to offset tariff impacts. Toyota also reiterated its commitment to invest in the U.S. to create jobs and expand its sales and services footprint.
Management highlighted that the company will continue to invest heavily in electrified vehicle technology and software‑defined vehicle platforms, positioning itself for long‑term growth. The new Software‑Defined Vehicle strategy, launched with the RAV4, signals a shift toward higher‑margin, technology‑rich products that can help offset raw‑material cost pressures.
Analysts and investors reacted with mixed sentiment. While the raised full‑year guidance signals confidence in demand and cost control, the ongoing U.S. tariff headwind and a recent recall of over one million vehicles for a rear‑view camera defect remain concerns. The company’s focus on hybrid sales and strategic investments in software and electrification is viewed as a positive long‑term driver, but short‑term headwinds continue to weigh on market perception.
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