Net profit surged 1,299.9%, Samsung Q2 records strongest earnings quarter ever

Original Author: Zhao Ying

Original Source: Wall Street Insights

In the second quarter of 2026, Samsung Electronics posted its most profitable single quarter in history.

Here are the specifics:

• Revenue reached 171.5 trillion Korean Won, surging 130% year-on-year (YoY) and growing 28% quarter-on-quarter (QoQ);
• Operating profit soared to 89.49 trillion Korean Won, a massive increase of 1813.8% YoY compared to 4.68 trillion Korean Won in the same period last year, also up 56.4% QoQ; the operating profit margin reached 52.2%, a YoY increase of 1814%.
• Net profit hit 71.62 trillion Korean Won, exceeding the estimated 68.36 trillion Korean Won, skyrocketing 1299.9% YoY, with a net profit margin of 41.8%.
• Earnings per share were 10,849 Korean Won, a dramatic leap from 737 Korean Won a year ago, and an increase of 3,726 Korean Won QoQ.
• Looking at cumulative data for the first half, total revenue for the first two quarters reached 305.37 trillion Korean Won, with operating profit at 146.73 trillion Korean Won, representing increases of 98.7% and 1191.5%, respectively, compared to the same period last year.

The undisputed core engine driving this explosive performance was the semiconductor business. Driven by AI server demand, Samsung's Memory division achieved sales of 120.8 trillion Korean Won, setting an all-time record. The DS (Device Solutions) division alone posted an operating profit of 89.2 trillion Korean Won in the quarter, accounting for over 99% of the company's total operating profit. Meanwhile, R&D investment also climbed to 16 trillion Korean Won, up 41% QoQ, highlighting Samsung's continued bet on maintaining technological leadership.

However, the divergence in the performance structure was equally clear. The DX (Device eXperience) division—covering mobile phones, TVs, and home appliances—saw its operating profit turn negative at -0.8 trillion Korean Won, as rising component costs eroded the profitability of the consumer-facing business. The stellar overall performance largely relied on the high-speed rotation of the single semiconductor engine.

Following the announcement, Samsung's stock initially rose 4.1% in Seoul on Thursday before reversing to a 1.9% decline. It is currently up 7.91%.

Memory and HBM: A Super Cycle Fueled by the AI Wave, Profits Soar 250x

The memory business was the brightest highlight of the quarter.

DS division sales jumped from 81.7 trillion Korean Won in the previous quarter to 127.5 trillion Korean Won, a 56% QoQ increase; operating profit rose from 53.7 trillion Korean Won to 89.2 trillion Korean Won, representing a YoY increase of over 250 times and a 66% QoQ increase. Both DRAM and NAND achieved their highest-ever shipment volumes, with server revenue share reaching a new record.

In terms of HBM (High Bandwidth Memory), Samsung has commenced mass production of HBM4 and started delivering in volume to key customers, while also completing the shipment of the industry's first HBM4E samples. This positions Samsung as a frontrunner in the competition for next-generation AI accelerator platforms. The continued volume ramp-up of high-value products like DDR5 and SOCAMM2, coupled with strong demand for enterprise SSDs, keeps the overall memory market in a state of tight supply.

Samsung's semiconductor division significantly outperformed expectations, primarily driven by the explosive growth in demand for high-bandwidth memory from AI servers. Mr. Huang, Research Director at Counterpoint, stated that Samsung's DRAM business is continuously expanding its market share lead. "Samsung is leveraging its strong position in the memory sector to actively expand market share across most of its business divisions."

Looking ahead to the second half of the year, Samsung expects AI infrastructure capital expenditure to remain strong, and the widespread adoption of Agentic AI will further stimulate demand for server DRAM and enterprise SSDs. Although demand from the mobile and PC sectors may show some temporary softening, Samsung believes the overall market will continue to face supply shortages and plans to solidify its technological leadership around HBM4, Gen6, and UFS 5.0.

S.LSI and Foundry: Dual Breakthroughs, Advancing into High-End Nodes

The System LSI (S.LSI) division achieved a record first-half revenue this quarter, driven primarily by strong sales of SoCs and image sensors. The company has successfully secured orders for the next-generation flagship SoC and new Custom SoC design contracts, continuously expanding its share of the high-end mobile market. Future focus areas include promoting sales of the next-generation flagship SoC, expanding the Custom SoC business, and entering more high-value fields, including diversifying image sensor applications and the Power IC business.

The Foundry business also showed a positive trend: HBM B-Die demand drove revenue growth, supported by robust orders from US clients, and design contracts for the 2nm HPC project are progressing. Moving into the second half of the year, Samsung plans to ramp up production of the 2nm Gen 2 mobile chip, increase output of the 4nm LPU, and expand shipments of Base-Die. The target is to achieve double-digit revenue growth, driven by advanced nodes and winning designs for AI/HPC applications to fuel medium-to-long-term growth.

DX Division: Consumer Side Under Pressure, Costs Erode Profits

In stark contrast to the semiconductor success, the DX division recorded an operating loss of -0.8 trillion Korean Won this quarter.

For the Mobile business (MX/NW), smartphone revenue was 32.3 trillion Korean Won, up 14% YoY. Sales of both flagship models and the A-series were robust, and the launch of the Galaxy Z Fold8 series provided a new growth driver. However, operating profit turned negative to -0.7 trillion Korean Won, with industry-wide component cost increases being the core source of pressure. The company is actively pursuing efficiency optimization measures and plans to expand its AI experience ecosystem through new form factors like "smart glasses."

Revenue for the VD/DA (Visual Display & Digital Appliances) division was 14.5 trillion Korean Won, slightly up YoY, but operating profit was near breakeven (-0.01 trillion Korean Won). Air conditioner demand boosted DA division revenue, but cost pressures remained a drag. In the second half, Samsung plans to use "Vision AI" as a differentiator, combined with the expansion of TV Plus content and advertising, to enhance overall profitability.

SDC and Harman: Improved Profit Flexibility

Samsung Display (SDC) showed notable marginal improvement this quarter. Revenue reached 7.5 trillion Korean Won, up 17% YoY; operating profit recovered from 0.4 trillion Korean Won in the previous quarter to 0.7 trillion Korean Won.

Robust demand for high-end smartphone OLED panels was the primary driver, and expansion in the gaming monitor market also benefited the large-panel business. In the second half, Samsung plans to commence timely mass production at its 8.6G IT OLED line and further expand differentiated product offerings into the tablet, gaming, and automotive markets.

VD/DA sales were 14.5 trillion Korean Won, up 2% QoQ and 3% YoY; operating profit was -0.01 trillion Korean Won. VD saw QoQ profitability decline due to cost increases, but revenue and profit grew YoY, helped by capturing demand related to sports events. DA revenue grew driven by air conditioner demand, but cost pressures hurt profitability. In the second half, VD will leverage "Vision AI" to lead the AI TV market and enhance profitability through diversified TV Plus content and advertising expansion. DA will expand AI product sales and strengthen channel diversification and product competitiveness.

Harman (the acquired high-end audio and automotive solutions brand) recorded revenue of 4.6 trillion Korean Won, up 19% YoY; operating profit recovered to 0.4 trillion Korean Won. Strong sales of in-vehicle central computing units and portable audio products drove the overall performance improvement. The company will focus on maintaining steady growth in the high-growth automotive sub-segments and brand-driven audio business.

Balance Sheet and Cash Flow: Financial Strength Significantly Enhanced

Samsung Electronics' financial position has improved markedly alongside its performance surge. As of the end of June 2026, total assets reached 759.5 trillion Korean Won, an increase of over 12 trillion Korean Won from three months earlier; cash and cash equivalents reached 190 trillion Korean Won, with a net cash position as high as 167.6 trillion Korean Won, nearly double the 86.7 trillion Korean Won recorded in the same period last year.

Operating cash flow for the quarter stood at a whopping 105.1 trillion Korean Won, also an all-time high, with net profit contributions to cash flow surpassing depreciation and amortization. ROE jumped from 5% a year ago to 56%, and the EBITDA margin reached 59%.

On the investment front, capital expenditure for the quarter was 14.1 trillion Korean Won. Samsung also spent 5.6 trillion Korean Won on share buybacks and 6.2 trillion Korean Won on dividend payments, demonstrating sustained focus on shareholder returns supported by strong earnings. The debt ratio remained low at 31%, while the net debt-to-equity ratio was -29%, indicating a robust financial structure.