MAMEZO CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥5.81B
• Operating Income: ¥1.11B
• Net Income: ¥621M
• EPS: ¥49.03

Income Statement

Balance Sheet

Cash Flow Statement

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

Mamezou Co., Ltd. (consolidated, JGAAP) delivered solid FY2026 Q2 results, with revenue of ¥5,809 million, up 10.3% year over year. Operating income grew faster than sales at ¥1,113 million (+14.7% YoY), indicating positive operating leverage. Net income rose 26.7% YoY to ¥786 million, implying additional tailwinds such as improved non-operating balance and/or a normalized tax rate. Gross profit reached ¥1,731 million, translating to a gross margin of 29.8%, consistent with a high value-added, asset-light IT services/consulting model. Operating margin was a robust 19.2% (¥1,113m/¥5,809m), and net margin stood at 13.53%, highlighting disciplined cost control and favorable mix. EBITDA was ¥1,154 million, reflecting modest depreciation of ¥41 million and a light asset base. Interest expense was negligible at ¥0.3 million, with an exceptionally high interest coverage ratio of over 3,300x, underscoring minimal financial risk. On the balance sheet, total assets were ¥4,491 million and equity ¥3,233 million, implying an equity ratio of roughly 72% (calculated), despite the reported equity ratio being listed as 0.0% (unreported). Asset turnover was 1.293x and financial leverage 1.39x, leading to a strong DuPont ROE of 24.31%, consistent with the reported figure. Operating cash flow was ¥757 million, equating to a healthy OCF/Net Income of 0.96, which supports earnings quality. Working capital remained ample, with a current ratio of 285% and working capital of ¥2,389 million, suitable for project-based IT services. Free cash flow was not derivable due to unreported investing cash flows (shown as 0), so FCF should be interpreted with caution this quarter. Dividend data (DPS and payout) were unreported; EPS was ¥49.03, but shares outstanding and treasury shares were not disclosed in this dataset. The effective tax rate is shown as 0.0% in the calculated metrics, but using disclosed taxes (¥319m) and ordinary income (¥1,112m) implies an estimated effective tax rate around 28–29%, suggesting the 0.0% is an unreported field. Overall, profitability, liquidity, and solvency appear strong, with solid cash conversion and low leverage. Data gaps (notably equity ratio, cash balance, investing cash flows, DPS, and share counts) limit precision on FCF and per-share capital allocation assessments.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 13.53%
• asset_turnover: 1.293
• financial_leverage: 1.39
• calculated_ROE: 24.31%
• commentary: ROE is driven by healthy margins and decent asset turnover, with modest leverage (A/E ~1.39) amplifying returns. Margin expansion versus sales growth is evident from operating income outpacing revenue. margin_quality:
• gross_margin: 29.8% (¥1,731m/¥5,809m)
• operating_margin: 19.2% (¥1,113m/¥5,809m)
• net_margin: 13.53% (per DuPont)
• notes: Margins reflect an asset-light, higher value-added service mix; negligible interest burden and ordinary income closely tracking operating income indicate limited non-operating noise. operating_leverage: Operating income growth (+14.7% YoY) exceeded revenue growth (+10.3% YoY), indicating positive operating leverage likely from utilization improvements, pricing, and SG&A discipline. Low D&A (~¥41m) underscores limited fixed cost drag.

Growth Assessment

revenue_sustainability: 10.3% YoY top-line growth suggests resilient demand for IT consulting/system development. Sustainability hinges on backlog, customer diversification, and pricing power amid wage inflation. profit_quality: Net income rose 26.7% YoY, outpacing sales due to margin expansion and potentially normalized tax/non-operating items. Ordinary income aligned with operating income implies core-driven growth. outlook: With strong utilization and cost control, mid-teens profit growth appears achievable if demand holds. Watch for headcount growth, billing rate improvements, and book-to-bill to gauge momentum into 2H.

Financial Health

liquidity:

• current_ratio: 285.0%
• quick_ratio: 285.0% (inventories unreported)
• working_capital: ¥2,389,037,000
• commentary: Ample liquidity provides buffer for project timing and receivables cycles typical in IT services. solvency:
• debt_to_equity: 0.40x (Total liabilities ¥1,303m / Equity ¥3,233m)
• interest_coverage: 3342.3x
• equity_ratio_estimate: Approximately 72% (calculated as ¥3,233m/¥4,491m), while the reported 0.0% is an unreported field. capital_structure: Low leverage and minimal interest expense indicate conservative funding; capacity exists for inorganic growth or shareholder returns subject to policy.

Cash Flow Quality

earnings_quality: OCF/Net Income at 0.96 (¥757m/¥786m) indicates largely cash-backed earnings with manageable working capital swings. FCF_analysis: Free cash flow cannot be reliably assessed this quarter because investing cash flows are unreported (shown as 0). Given low D&A, maintenance capex is likely modest, but M&A or software investments could be material and episodic. working_capital: Strong working capital position; monitor DSO and contract assets as revenue scales to ensure continued cash conversion.

Dividend Sustainability

payout_ratio_assessment: Payout ratio is shown as 0.0% due to unreported DPS. With EPS at ¥49.03 and strong ROE, capacity exists, but explicit policy and DPS data are unavailable here. FCF_coverage: FCF coverage cannot be evaluated this period because investing cash flows (and thus FCF) are unreported. policy_outlook: Given low leverage and strong cash generation, the balance sheet could support dividends or buybacks; however, actual policy remains unclear in the provided data.

Risk Assessment

Business Risks:

• Utilization risk and pricing pressure in system integration/consulting projects.
• Wage inflation for engineers potentially outpacing bill rate increases.
• Project execution risk on fixed-price contracts affecting margins.
• Customer concentration and IT budget cyclicality among key clients.
• Talent hiring and retention in a competitive labor market.
• Potential delays in client decision-making tied to macro uncertainty.

Financial Risks:

• Working capital timing leading to OCF volatility despite overall strength.
• Event-driven cash needs for M&A or investment, with investing CF unreported this period.
• Limited interest rate sensitivity today, but future leverage for growth could raise exposure.

Key Concerns:

• Data gaps: equity ratio, cash balance, investing cash flows, DPS, and share data are unreported.
• Sustainability of operating leverage as growth normalizes.
• Ability to pass through wage inflation to maintain margins.

Investment Implications

Key Takeaways:

• Double-digit revenue growth with faster operating profit growth indicates healthy operating leverage.
• ROE at 24.31% is strong, supported by solid margins and modest leverage.
• Cash conversion is robust (OCF/NI 0.96), consistent with an asset-light model.
• Balance sheet is conservative with D/E ~0.40x and estimated equity ratio ~72%.
• Limited visibility on FCF and capital allocation due to unreported investing CF and dividends.

Metrics to Watch:

• Backlog/book-to-bill and large deal pipeline.
• Utilization rate, billing rates, and headcount growth.
• SG&A ratio and wage inflation vs. unit price increases.
• DSO/working capital trends and OCF/NI conversion.
• Investing cash flows (capex/M&A) and any updates to dividend/buyback policy.

Relative Positioning: Relative to domestic IT services peers, profitability (operating margin ~19%) and ROE (~24%) appear above average, supported by low leverage and solid cash conversion; sustained growth and capital allocation clarity would further enhance positioning.

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