| Metrics | Current Period | Prior-year Period | YoY |
|---|---|---|---|
| Revenue | ¥145.5B | ¥129.4B | +12.5% |
| Operating Income | ¥18.3B | ¥8.1B | +124.7% |
| Ordinary Income | ¥19.4B | ¥8.4B | +129.7% |
| Net Income | ¥13.5B | ¥8.3B | +61.8% |
| ROE | 6.0% | 3.9% | - |
FY2026 Q2 results were: Revenue ¥145.5B (YoY +¥16.1B +12.5%), Operating Income ¥18.3B (YoY +¥10.2B +124.7%), Ordinary Income ¥19.4B (YoY +¥11.0B +129.7%), and Net Income ¥13.5B (YoY +¥5.2B +61.8%). The operating margin was 12.6%, expanding by 6.3pp from 6.3% in the prior-year period, reflecting a pronounced operating leverage effect from sales growth and a lower fixed cost ratio. Operating Cash Flow was ¥22.8B, 1.69x Net Income, indicating strong cash backing of earnings. Although Net Income includes a one-time gain of ¥3.7B from the sale of investment securities, the substantial improvement in Operating Income indicates a fundamental enhancement of the earnings structure. Progress toward full-year guidance (Revenue ¥287.0B, Operating Income ¥27.0B, Net Income ¥20.0B) is solid, and the year-end dividend policy of ¥112.5 per share is maintained.
[Profitability] ROE 6.0% (DuPont: Net Profit Margin 9.3% × Total Asset Turnover 0.553 × Financial Leverage 1.17x), Operating Margin 12.6% (up +6.3pp from 6.3% in the prior-year period), Net Profit Margin 9.3%. The improvement in the operating margin stems from SG&A discipline and a lower fixed cost ratio against 12.5% sales growth, evidencing operating leverage. [Cash Quality] Cash and Deposits ¥84.8B, Operating CF/Net Income 1.69x, Cash Conversion Ratio (Operating CF/EBITDA) 0.85x, indicating healthy cash realization of profits. Short-term Debt Coverage 2.52x (Cash and Deposits ¥84.8B / Current Liabilities ¥33.6B) shows ample liquidity. [Investment Efficiency] Total Asset Turnover 0.553x; Capital Expenditures ¥9.2B exceeded Depreciation ¥8.7B by 1.06x, balancing growth and maintenance capex. [Financial Soundness] Equity ¥224.2B, Current Ratio 427%, Debt-to-Equity Ratio 0.17x; the capital structure is highly sound. Dependence on interest-bearing debt is low, limiting interest rate risk.
Operating CF was ¥22.8B, 1.69x Net Income of ¥13.5B, confirming cash backing of earnings. Investing CF was an outflow of ¥9.0B, mainly due to ¥9.2B in capex, but net outflow was contained by ¥5.1B proceeds from sales of securities. Free CF was ¥13.9B, reflecting strong cash generation; FCF coverage of the annual dividend, including the year-end dividend of ¥112.5, reached 2.19x. Cash and Deposits increased to ¥84.8B, with cash coverage of short-term liabilities of ¥33.6B at 2.52x, indicating ample liquidity. In working capital efficiency, Accounts Receivable increased to ¥30.8B (up +¥5.2B from ¥25.6B in the prior-year period), but collections improved as reflected in stronger Operating CF. Accounts Payable rose to ¥6.0B (up +¥1.2B +25.4% from ¥4.8B in the prior-year period), suggesting changes in procurement terms or supply chain efficiencies.
Against Ordinary Income of ¥19.4B, Operating Income was ¥18.3B, with a net non-operating gain of approximately ¥1.1B. The breakdown is non-operating income of ¥1.6B less non-operating expenses of ¥0.5B, mainly financial income and foreign exchange gains. Extraordinary gains of ¥4.5B (including a ¥3.7B gain on sale of investment securities) were recorded, boosting Net Income of ¥13.5B by about ¥3.7B. Non-operating income accounted for 1.1% of Revenue and extraordinary gains 3.1%, with a combined contribution of roughly 4.2% from non-recurring items beyond recurring Operating Income. Operating CF exceeded Net Income (Operating CF/Net Income 1.69x), indicating good cash-based earnings quality. As the gain on sale of investment securities is a one-time item, its sustainability is uncertain; however, Operating Income itself improved significantly by +124.7% YoY, supporting the view that the primary driver is a fundamental improvement in the earnings structure.
[Industry Positioning] (Reference information, our research) Profitability: The operating margin of 12.6% improved significantly from 6.3% in the prior-year period, reaching the level of the company’s past results (FY2026 12.6%). The net profit margin of 9.3% likewise stands at a favorable level within the company’s historical trend. Growth: The sales growth rate of 12.5% aligns with the company’s historical trend (FY2026 12.5%) and shows progress exceeding the full-year forecast of +8.6% YoY. Soundness: Equity Ratio 85.2% (Equity ¥224.2B / Total Assets ¥263.3B) and Debt-to-Equity Ratio 0.17x are extremely sound levels, with limited financial risk. Industry: Due to non-disclosure of detailed industry classification, comparisons are limited. Source: Our aggregation of public financial statements.
This report is an automatically generated earnings analysis created by AI using XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. The industry benchmark is reference information compiled by our firm based on publicly available financial statements. Investment decisions are your own responsibility; consult a professional as needed before making any decisions.