Kaori's first-quarter 2026 revenue figures tell a remarkable story. January revenue came in at NT$642 million (US$20.2 million), showing powerful year-over-year growth. February revenue rose to NT$933.8 million (US$29.3 million), up an extraordinary 205.7% year-over-year, and accumulated revenue for the first two months of 2026 surged 260.2% compared to the same period a year earlier.
March then delivered a new all-time monthly high. Revenue reached roughly US$40 million (approximately NT$1.27 billion), up about 35% sequentially and 216% year-over-year, making Kaori one of five Taiwan cooling suppliers to post record March revenue alongside AVC, Auras, Jentech, and Sunon. Kaori's own filing attributed a 205.35% year-over-year jump in March revenue to a 13.79% increase in plate heat exchanger sales and a 306.52% surge in thermal energy products, reflecting strong demand for both traditional heat exchange systems and newer energy-related and data center applications.
Taken together, Kaori's Q1 2026 revenue totals roughly NT$2.85 billion (around US$89.5 million), an exceptional result for a company of its size and a clear confirmation that its liquid cooling pivot is translating into real revenue momentum. Management has indicated that some orders, including fuel cell systems and liquid cooling-related deployments, are supported by long-term visibility extending into 2028.
While Kaori is smaller than thermal heavyweights like Delta Electronics or Asia Vital Components, its growth rate is among the highest in the entire sector. The company's thermal-related revenue doubled in 2025, and thermal products now account for roughly 50% of total sales, a large increase from just two years ago. For full-year 2026, management projects overall revenue growth of 80%, driven by the rapid expansion of its liquid cooling business, with production capacity set to increase by 30% to 50% over the course of the year.
Kaori's pivot draws on its core expertise in brazing and vacuum welding: precision techniques used to create leak-proof thermal components. The company has applied these capabilities to develop coolant distribution units (CDUs) and manifolds, the systems that circulate liquid coolant through AI server racks to extract heat from high-power chips.
Kaori's CDUs have been adopted by major U.S. cloud service providers. To sharpen its technology focus, the company has established a subsidiary, Kaori Thermal Technology, dedicated to liquid cooling systems for data centers with OEM and design-for-manufacturing services. Management has stated that while the legacy plate heat exchanger business remains strong, cooling systems are expected to become Kaori's primary revenue driver over the next three to five years.
The timing of this pivot is ideal. Nvidia's next-generation Vera Rubin platform mandates 100% liquid cooling, and industry-wide liquid cooling penetration in AI servers is forecast to jump from 18% in 2025 to 57% in 2026. As rack power densities climb toward 200 kilowatts or more, every AI data center needs CDUs, and Kaori's brazing heritage gives it a manufacturing advantage in producing the precise, reliable heat exchange components these systems require.
Beyond CDUs, Kaori is exploring immersion cooling, where server components are submerged directly in non-conductive liquid. While still a niche segment, immersion cooling is gaining traction for the highest-density AI deployments, and Kaori's decades of heat transfer expertise position it well for this market. The company also continues developing brazed plate heat exchangers optimized for data center applications, including fuel cell systems.
The outlook for Kaori through the rest of 2026 is strongly bullish. With liquid cooling projected to reach nearly 50% of revenue, overall growth guided at 80%, gross margins trending higher, and capacity expanding 30% to 50%, the company is in the middle of a structural transformation that is reshaping its financial profile. Q1's record performance, capped by March's all-time monthly high, suggests Kaori is entering that transformation with more momentum than management originally guided for.
Kaori remains a smaller player compared to AVC, but its growth rate and margin trajectory are drawing increasing attention from investors. In the AI infrastructure boom, niche specialists with the right technology and the right customers can find themselves on an extraordinary growth curve. Kaori Heat Treatment is proving exactly that.