MAMEZO (202A) FY2026 Q3 Earnings Report

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Executive Summary

The most notable feature of the current period was the substantial increase in net income resulting from the recognition of extraordinary income, making it necessary to distinguish between the high profitability of the core business and the impact of temporary factors. Revenue was ¥4.53B, operating income was ¥1.94B (operating margin of 42.9%), ordinary income was ¥1.96B, and net income was ¥2.94B. Net income exceeded ordinary income due to the recognition of extraordinary income of ¥1.18B. Against pretax income of ¥3.13B, income taxes and other taxes amounted to ¥0.19B, resulting in an effective tax rate of approximately 6.1%.

Factors Affecting Performance

【Revenue】Revenue was ¥4.53B, and gross profit after deducting cost of sales of ¥1.89B was ¥2.64B, representing a high gross margin of 58.2%. As segment information has not been disclosed, the analysis is limited to a company-wide basis.

【Profit and Loss】After absorbing SG&A expenses of ¥0.70B (SG&A ratio of 15.3%), the Company secured high profitability, with operating income of ¥1.94B and an operating margin of 42.9%. Against ordinary income of ¥1.96B, the recognition of extraordinary income of ¥1.18B expanded pretax income to ¥3.13B. Combined with the low effective tax rate of 6.1%, net income reached ¥2.94B. Extraordinary income is a temporary factor, and the Company’s underlying earnings power excluding this item should be evaluated on an operating income basis. Overall, the results can be characterized as an earnings increase driven by the addition of temporary extraordinary income to the core business’s high profitability.

Key Financial Metrics

【Profitability】The operating margin of 42.9% and net margin of 65.0% are both extremely high. However, the high net margin was significantly boosted on a temporary basis by extraordinary income of ¥1.18B and the low effective tax rate of 6.1%. 【Cash Quality】The statement of cash flows has not been disclosed, and the Company’s cash-generation capacity from operating activities cannot be confirmed. Accounts receivable amounted to ¥1.32B, representing an increasing share of total assets, and the extent to which earnings have been converted into cash will need to be confirmed through future disclosures. 【Investment Efficiency】Annualized ROE was extremely high at 124.6%; however, extraordinary income and a sharp expansion in net assets (¥1.65B in the previous year → ¥3.15B in the current period) occurred simultaneously, suggesting that underlying capital efficiency excluding temporary factors is lower than this figure. 【Financial Soundness】With an equity ratio of 71.1%, cash and deposits of ¥1.78B, and short-term borrowings of ¥0.30B, the Company’s liquidity and capital structure are conservative.

Cash Flow Analysis

As cash flow statement data has not been disclosed, funding trends are assessed based on changes in the balance sheet. Cash and deposits increased substantially from ¥0.35B in the previous year to ¥1.78B in the current period, indicating that the Company has accumulated sufficient funds. Meanwhile, accounts receivable and notes receivable also increased significantly to ¥1.32B. Since this increase is notable relative to the scale of revenue, some of the increase in cash may have resulted from other factors, including possible capital increases and sales of shares, rather than solely from the collection of operating receivables. Property, plant and equipment and intangible assets also increased substantially year on year, suggesting an expansion in investment activity. Overall, the Company has ample funds, but its cash-generation capacity from operating activities itself cannot be verified based on the available data.

Quality of Earnings

Of the current-period net income of ¥2.94B, the portion exceeding ordinary income of ¥1.96B was primarily attributable to the recognition of extraordinary income of ¥1.18B. Recurring earnings power and temporary factors therefore need to be evaluated separately. Non-operating income was ¥0.02B and non-operating expenses were ¥0.01B, both small in scale, and the difference between ordinary income and operating income was minimal. Against pretax income of ¥3.13B, income taxes and other taxes were ¥0.19B, resulting in a low effective tax rate of approximately 6.1%; this also contributed to the increase in net income. Accounts receivable increased sharply year on year, raising the possibility that some revenue was recognized as profit while remaining uncollected. From an accrual perspective, the extent to which earnings have been converted into cash should continue to be monitored.

Earnings Forecast and Guidance

The full-year forecast is revenue of ¥7.44B, operating income of ¥2.39B, ordinary income of ¥2.39B, and net income of ¥3.21B. For the current period (Q3 cumulative), revenue was ¥4.53B, representing 60.9% of the full-year forecast, while net income was ¥2.94B, representing 91.7% of the full-year forecast. Net income is progressing significantly ahead of revenue and operating income because of the recognition of extraordinary income of ¥1.18B. During the remaining period, the pace of progress may moderate as the contribution from extraordinary items diminishes.

Shareholder Returns

The dividend forecast is ¥30.00 per share at fiscal year-end. Based on current-period net income of ¥2.94B and 16,050 thousand shares outstanding, the payout ratio is approximately 16.4% (¥30.00 × 16,050 thousand shares ÷ ¥2.94B), which is a conservative level. With cash and deposits of ¥1.78B, the Company appears to have sufficient capacity to pay dividends.

Risk Factors

1. Risk of temporary earnings: Extraordinary income of ¥1.18B made a significant contribution to net income of ¥2.94B. If this item falls away, the net margin and ROE could decline substantially.

2. Risk of delayed cash conversion due to an increase in accounts receivable: Accounts receivable and notes receivable increased sharply from ¥0.06B in the previous year to ¥1.32B in the current period, potentially indicating a lengthening collection cycle relative to the scale of revenue.

3. Risk of a short-term funding structure: Short-term borrowings increased from ¥0.10B in the previous year to ¥0.30B in the current period, and liabilities are concentrated in the short term, with current liabilities of ¥1.27B compared with non-current liabilities of ¥0.01B. Cash of ¥1.78B is well above these liabilities, but changes in the funding structure require monitoring.

Industry Benchmark (Reference; Compiled by the Company)

Industry Benchmark (it_telecom)

Profitability and Returns

Both the operating margin and net margin substantially exceed the industry median. However, because the difference in net margin includes the impact of extraordinary income, the operating margin provides a comparison that more closely reflects the underlying business.

※Source: Compiled by the Company

Key Takeaways from the Financial Results

1. The high profitability indicated by an operating margin of 42.9% and gross margin of 58.2% demonstrates the strong profitability of the core business. However, the net margin of 65.0% includes a temporary boost from extraordinary income and the low effective tax rate, and therefore needs to be viewed separately from recurring earnings power.

2. Total assets doubled from ¥1.82B in the previous year to ¥4.42B in the current period, while cash, accounts receivable, and retained earnings all increased substantially. Although the financial base has expanded, the sharp increase in accounts receivable requires ongoing monitoring from a working capital management perspective.

3. Net income has reached 91.7% of the full-year forecast, primarily due to the recognition of extraordinary income. The pace of progress during the remaining period may vary depending on whether extraordinary items are recognized.

Theoretical Share Price (Reference Value)

Sensitivity: ¥502–¥535 at ±1% for the cost of equity, and ¥507–¥535 at ±0.1 for ω.

Notes:

• Since net income progress against the full-year forecast (92%) exceeds the standard level (75%), forecast EPS has been adjusted upward within a maximum range of +10% (because companies progressing ahead of forecasts tend to outperform them. In businesses with strong seasonality, the adjustment may be excessive).
• Since forecast ROE is high, ROE is capped at 50% for calculation purposes (the differences between scenarios may therefore appear small).
• Net assets as of the quarter-end are used (there is a timing difference relative to the full-year forecast).
• As net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual income model (Ohlson type; explicit 5-year fade) / Interest rate reference month: 2026-07 / Mechanically calculated solely from publicly disclosed data; this is not a forecast of the market share price or a recommendation of any specific investment action, and does not predict or guarantee future share prices.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, and you should consult a professional as necessary.