MIXI,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥67.43B
• Operating Income: ¥7.21B
• Net Income: ¥5.45B
• EPS: ¥72.91

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

For FY2026 Q2 (cumulative), MIXI reported revenue of ¥67.4bn, down 2.0% YoY, indicating modest top-line softness. Gross profit of ¥45.6bn implies a robust gross margin of 67.6%, consistent with a high-margin digital/services mix. Operating income declined 17.5% YoY to ¥7.2bn, signaling margin compression and likely higher operating expenses or mix shifts. Net income fell 6.2% YoY to ¥4.9bn, a smaller decline than operating income, aided by minimal interest expense and stable non-operating items. The operating margin stands at roughly 10.7% and the EBITDA margin at 12.1%, reflecting positive but pressured profitability relative to last year. DuPont decomposition shows ROE of 2.78% driven by a 7.27% net margin, 0.273x asset turnover, and 1.40x financial leverage, highlighting low asset intensity but subdued returns. Liquidity remains very strong with a current ratio of 541% and working capital of ¥138.6bn, indicating ample short-term buffers. Solvency looks solid with total liabilities of ¥44.2bn versus equity of ¥176.1bn, yielding a low debt-to-equity ratio of 0.25x and interest coverage of 153.5x. Operating cash flow of ¥8.5bn exceeds net income by 1.74x, pointing to healthy earnings quality in the period. Ordinary income of ¥7.2bn against income tax of ¥3.8bn implies an effective tax burden near the low-50% range, which is higher than typical and may reflect discrete items; the provided “0.0%” effective tax rate is not consistent with the disclosed tax expense. Dividend data show DPS and payout as zero for the period, which likely reflects non-disclosure to date rather than a declared absence; cash & equivalents and investing cash flows are also unreported in XBRL. Despite the lack of investing cash flow disclosure, the combination of strong liquidity and low leverage suggests significant financial flexibility. The YoY decline in operating income relative to the milder revenue decline suggests unfavorable operating leverage or increased cost to acquire/retain users. Asset turnover remains modest at 0.273x, consistent with a sizeable balance sheet relative to current period revenues and weighing on ROE. Overall, MIXI’s financial profile shows resilient gross economics, conservative balance sheet strength, good cash conversion, but compressed operating profitability and subdued ROE in the half. Data limitations (notably cash, investing CF, and share count) constrain precision on FCF and per-share balance metrics, but the available figures support a view of sound financial health with mixed profitability trends.

Profitability Analysis

ROE of 2.78% decomposes into a 7.27% net margin, 0.273x asset turnover, and 1.40x financial leverage. The key headwind is operating margin compression: operating income of ¥7.2bn on ¥67.4bn revenue yields ~10.7% vs. a higher level implied last year given -17.5% YoY in OP vs. -2.0% in revenue. Gross margin is strong at 67.6%, indicating product/platform economics remain solid; the margin squeeze likely stems from higher SG&A (e.g., marketing, platform fees, personnel) rather than cost of sales. EBITDA margin at 12.1% provides limited buffer above operating margin, suggesting D&A burden is light (¥0.9bn), and operating expenses are the main pinch point. Operating leverage appears unfavorable this period: a small revenue decline led to a disproportionately larger operating income decline. Interest expense is negligible (¥47m), and ordinary income matches operating income, indicating minimal non-operating drag. The high apparent tax burden (~53% implied from ¥3.8bn tax on ~¥7.2bn pretax) further reduces net profitability. Overall profitability quality is mixed: structurally strong gross margin, but lower operating efficiency and elevated taxes weigh on ROE.

Growth Assessment

Revenue declined 2.0% YoY to ¥67.4bn, indicating near-flat to slightly negative growth in the period. The steeper decline in operating income (-17.5% YoY) suggests revenue mix shifts or increased expenses to sustain engagement that did not translate into proportional revenue. Net income fell 6.2% YoY, less than operating income, aided by stable financing costs. Sustainability of revenue hinges on stabilizing core services and improving monetization without escalating costs; current gross margins imply continued capacity to generate value if operating expenses are contained. Profit quality remains acceptable, with net margin at 7.27% and OCF/NI at 1.74x, but elevated taxes dilute bottom-line growth. Outlook depends on 2H execution: launching/refreshing content, marketing efficiency, and cost discipline to re-expand operating margin. Without visibility into pipeline catalysts or user metrics (not disclosed here), base-case momentum appears muted but stable.

Financial Health

Liquidity is very strong: current assets of ¥169.9bn vs. current liabilities of ¥31.4bn yield a current and quick ratio of ~5.4x, and working capital of ¥138.6bn. Solvency is conservative: total liabilities of ¥44.2bn against equity of ¥176.1bn results in a debt-to-equity ratio of 0.25x. Interest coverage is 153.5x (operating income/interest expense), indicating minimal refinancing risk. Asset base is large at ¥247.1bn; with asset turnover at 0.273x, capital efficiency is modest, but low leverage mitigates risk. Reported equity ratio of 0.0% reflects non-disclosure, not actual zero; based on totals, equity/asset ratio approximates 71.3%, underscoring balance sheet strength.

Cash Flow Quality

Operating cash flow of ¥8.5bn vs. net income of ¥4.9bn (OCF/NI 1.74x) indicates strong cash conversion, likely supported by favorable working capital movements and low non-cash charges (D&A ¥0.9bn). Free cash flow cannot be reliably computed as investing cash flow and capex are not disclosed (reported as zero in XBRL placeholders). EBITDA of ¥8.1bn vs. OCF of ¥8.5bn suggests limited accrual build and decent earnings quality for the period. Working capital appears supportive given high current assets relative to current liabilities; however, the composition (cash vs. receivables vs. other) is not disclosed, limiting deeper assessment. Overall, cash generation looks healthy, but the absence of investing CF and cash balance data constrains full FCF analysis.

Dividend Sustainability

DPS and payout are shown as 0.00, which likely reflects a lack of disclosure for this interim period rather than a definitive policy shift. With net income positive and OCF exceeding earnings, internal capacity to fund dividends appears adequate, subject to capital allocation priorities and capex/strategic investments (undisclosed). FCF coverage metrics are not assessable due to missing investing cash flow and capex data. Given strong liquidity (current ratio ~5.4x) and low leverage (D/E 0.25x), the balance sheet could support distributions if the company chooses, but sustainability depends on stabilizing operating margins and normalizing the effective tax burden. Policy outlook remains uncertain in the absence of guidance or historical policy detail within this dataset.

Risk Assessment

Business Risks:

• Revenue softness (-2.0% YoY) indicating potential demand or monetization headwinds
• Operating leverage risk as small revenue declines cause larger operating profit drops
• Dependence on maintaining user engagement and content pipeline (implied by business model margins)
• Platform fee dynamics and marketing cost inflation impacting margins
• Potential regulatory or ecosystem changes affecting digital distribution and payments

Financial Risks:

• High implied effective tax rate (~53%) reducing net profitability and adding volatility
• Modest asset turnover (0.273x) weighing on ROE despite low leverage
• Limited visibility into cash, investing cash flow, and capex due to non-disclosure
• Potential working capital swings given large current asset base

Key Concerns:

• Margin compression with operating income down 17.5% YoY on slight revenue decline
• Elevated tax burden dampening net margins
• Data gaps (cash, investing CF, share metrics) restricting FCF and per-share analysis

Investment Implications

Key Takeaways:

• Gross margin remains strong at 67.6%, but operating margin contracted to ~10.7%
• ROE at 2.78% reflects solid margins but low asset turnover and high taxes
• Liquidity and solvency are strong (current ratio ~5.4x; D/E 0.25x; interest cover 153.5x)
• Cash conversion is healthy (OCF/NI 1.74x), though FCF is not determinable
• Near-term performance hinges on expense control and revenue reacceleration in 2H

Metrics to Watch:

• Operating margin and SG&A ratio trajectory
• OCF/NI and working capital movements
• Effective tax rate normalization
• Asset turnover improvement and utilization of large current assets
• Disclosure of cash, capex, and investing cash flows to assess FCF
• Revenue growth reacceleration from new content or services

Relative Positioning: Within Japan-listed digital/service peers, MIXI exhibits stronger balance sheet conservatism and liquidity, average-to-strong gross margins, but currently weaker operating momentum and ROE due to margin compression and low asset turnover.

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