Dive Inc. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥4.06B
• Operating Income: ¥418M
• Net Income: ¥277M
• EPS: ¥33.29

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Verdict: A solid Q1 with modest margin expansion and double-digit bottom-line growth, supported by healthy liquidity but limited by lack of cash flow disclosures. Revenue grew 6.9% YoY to 40.62, while operating income rose 8.9% YoY to 4.18, indicating positive operating leverage. Net income increased 13.3% YoY to 2.77, outpacing revenue and operating profit growth. Gross margin printed at 26.1%, and operating margin was 10.3% (4.18/40.62). Using YoY back-solved priors, operating margin expanded by roughly 18 bps YoY (from ~10.1% to ~10.3%). Net margin improved by an estimated 37 bps YoY to 6.8% (from ~6.5%), aided by stronger operating performance and controlled non-operating expenses. SG&A ratio stands at ~16.7% (6.76/40.62); breakdown is unreported, limiting insight into cost drivers. Ordinary income was 4.19 (+8.0% YoY), and non-operating items were small (income 0.05, expense 0.01), implying earnings were primarily operational. The effective tax rate was high at about 37.0%, moderating net profit conversion. Balance sheet quality appears sound with a current ratio of 178% and cash of 20.66 against current liabilities of 18.97, indicating low near-term refinancing risk. Leverage is moderate (D/E 0.88x) with excellent interest coverage (329x), suggesting ample debt-servicing capacity. ROE is 11.2% per DuPont (NPM 6.8% × AT 0.836 × leverage 1.97x), a decent level for a single-entity JGAAP filer. Reported ROIC (framework metric) is 35.6%, signaling efficient capital use, though methodology is not disclosed here. Earnings quality cannot be fully assessed due to unreported cash flows (OCF/NI N/A), which is a key limitation. Forward-looking, sustaining margin gains will hinge on SG&A discipline and preserving asset turnover while managing a relatively high tax rate. Overall, results reflect steady execution with a strong balance sheet foundation, pending confirmation from cash flow data.

Profitability Analysis

ROE decomposition (DuPont): ROE 11.2% = Net Profit Margin 6.8% × Asset Turnover 0.836 × Financial Leverage 1.97x. The most material YoY change appears in the margin component: operating income growth (+8.9%) exceeded revenue growth (+6.9%), implying modest operating margin expansion (~+18 bps to 10.3%). Asset turnover at 0.836 suggests moderate efficiency; without YoY asset data, directional change is unclear, but rising revenue with a similar asset base would support stable-to-improving turnover. Financial leverage at 1.97x is moderate and likely stable given debt of 3.39 (short 1.32, long 2.07) against equity of 24.66. Business driver: better operating discipline (SG&A held to 16.7% of sales) and minimal non-operating noise (net +0.04) supported net margin improvement (+37 bps). Sustainability: Incremental margin expansion appears achievable if cost control persists; however, a 37% tax rate caps net margin upside absent tax optimization. Watchpoints: If SG&A grows faster than revenue, the thin ~10% operating margin could compress quickly. No evidence of unusual gains; performance seems recurring and operations-driven.

Growth Assessment

Top-line grew 6.9% YoY to 40.62, indicating steady demand. Operating profit grew 8.9% YoY to 4.18, reflecting positive operating leverage. Net income up 13.3% YoY to 2.77, benefiting from operating improvements and low non-operating drag. Back-solved priors suggest operating margin expanded ~18 bps and net margin ~37 bps, implying quality-led growth rather than one-off items. Non-operating contributions were small (income 0.05; expense 0.01), reducing the risk of growth being driven by transitory factors. The high effective tax rate (37%) constrains net growth scalability unless mitigated. With cash at 20.66 and working capital of 14.74, the company has capacity to invest to sustain growth, but capex/OCF data are unreported, limiting visibility. Outlook: Near-term growth sustainability depends on maintaining SG&A discipline and collection efficiency (AR 11.62) to support asset turnover. Given moderate leverage and strong interest coverage, financing is not a near-term constraint.

Financial Health

Liquidity is strong: current ratio 177.7% and quick ratio 177.7%, with cash 20.66 and AR 11.62 versus current liabilities 18.97. No warning triggers (Current Ratio well above 1.0). Solvency is comfortable: D/E 0.88x is conservative to moderate, and interest coverage at 329x is excellent. Maturity profile: short-term loans 1.32 are well covered by cash; minimal accounts payable (0.09) suggests limited supplier financing reliance but reduces natural working capital float. Total liabilities 21.67 vs cash 20.66 and current assets 33.71 imply low maturity mismatch risk. No off-balance sheet obligations are reported in the provided data.

Cash Flow Quality

OCF, capex, and FCF are unreported, so OCF/Net Income and FCF coverage cannot be assessed. This is a material limitation for earnings quality analysis. With net income at 2.77 and strong cash holdings (20.66), short-term liquidity is adequate, but sustainability of earnings requires confirmation that profit translates to cash (target OCF/NI > 1.0). Working capital indicators: AR at 11.62 is sizable relative to sales; absent DSO data, we cannot confirm collection trends. No signs of deliberate working capital manipulation are evident from the limited dataset, but the lack of cash flow disclosure warrants caution.

Dividend Sustainability

Dividend data (DPS, total dividends, payout) are unreported, preventing a payout and FCF coverage assessment. Balance sheet capacity appears sound with retained earnings of 17.29 and cash of 20.66, suggesting room to fund dividends if policy targets a conservative payout. However, without OCF and capex data, sustainability beyond the short term cannot be judged. Policy outlook: pending official guidance, a prudent payout (benchmark <60%) would be consistent with current leverage and liquidity.

Risk Assessment

Business Risks:

• Margin sensitivity: operating margin ~10% leaves limited buffer against cost inflation or pricing pressure.
• Execution risk in SG&A control given lack of breakdown; wage or rent inflation could pressure margins.
• High effective tax rate (~37%) suppresses net margin and ROE versus peers with better tax efficiency.
• Revenue concentration risk cannot be assessed due to data limitations; potential exposure remains unknown.

Financial Risks:

• Refinancing/interest rate risk on short-term loans (1.32), though currently well covered by cash.
• Working capital collection risk given sizable accounts receivable (11.62) without DSO visibility.
• Limited information on capex and cash generation increases uncertainty around future funding needs.

Key Concerns:

• Absence of operating and free cash flow data obscures earnings quality (OCF/NI N/A).
• Non-consolidated statements may omit affiliate-related risks or obligations if any.
• Potential seasonality could distort Q1 asset turnover (0.836) and margins; no guidance provided.

Investment Implications

Key Takeaways:

• Steady top-line growth (+6.9% YoY) with stronger bottom-line growth (+13.3% YoY).
• Modest margin expansion: OM up ~18 bps to 10.3%, NPM up ~37 bps to 6.8%.
• ROE at 11.2% is healthy for a single-entity filer; leverage moderate at 1.97x financial leverage and D/E 0.88x.
• Liquidity robust: current ratio 178%, cash 20.66; interest coverage exceptionally strong (329x).
• Cash flow disclosure missing, a key gap before upgrading confidence in earnings quality.
• Reported ROIC metric at 35.6% suggests efficient capital use, but methodology not disclosed here.

Metrics to Watch:

• Operating cash flow and OCF/NI (target >1.0).
• Free cash flow after capex to assess dividend capacity.
• SG&A ratio trend and any breakdown of personnel costs.
• Accounts receivable days and collection trends.
• Effective tax rate trajectory and any tax planning measures.
• Asset turnover progression and inventory dynamics (if applicable).
• Leverage and debt maturity schedule, especially short-term loans.

Relative Positioning: Within small-to-mid cap JGAAP single-entity peers, the company shows above-average ROE with conservative liquidity and very strong interest coverage. The main differentiator is operationally driven profit growth rather than non-operating gains, but the absence of cash flow data tempers comparative confidence.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis