FIT EASY (212A) FY2026 Q1 Earnings Report

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Executive Summary

This was a higher-revenue, higher-income quarter, securing double-digit profit growth despite a decline in the operating margin accompanying 50.6% revenue growth. Revenue was ¥31.14B (+50.6% YoY), Operating Income was ¥7.20B (+31.7%), Ordinary Income was ¥7.25B (+32.6%), and Net Income was ¥4.93B (+35.5%). The Operating Income margin of 23.1% remains high, but declined by approximately 3.3pt from 26.4% in the same period of the previous year, as an increase in the cost-of-sales ratio and higher SG&A expenses caused profit growth to slow relative to revenue growth.

Factors Affecting Performance

【Revenue】Revenue was ¥31.14B, representing a 50.6% increase YoY and expanding at a pace exceeding the full-year company forecast of +40.0% YoY. While the business scale is rapidly expanding, accounts receivable of ¥16.92B accounted for 17.5% of total assets, making the collection of receivables accompanying growth a key area for monitoring. Inventories were ¥1.30B, down 41.4% YoY, indicating improved inventory efficiency.

【Profit and Loss】Operating Income was ¥7.20B (+31.7%), Ordinary Income was ¥7.25B (+32.6%), and Net Income was ¥4.93B (+35.5%); all secured double-digit growth, but the profit growth rates were below the revenue growth rate. The gross margin was 35.0%, down approximately 1.6pt from 36.6% in the same period of the previous year. SG&A expenses increased 76.7% YoY to ¥3.70B, and the SG&A ratio rose to 11.9% from 10.1% in the same period of the previous year. Net non-operating income was limited to ¥0.06B, and Ordinary Income was primarily supported by Operating Income. Against Profit Before Tax of ¥7.26B, corporate income taxes and other taxes of ¥2.32B were recorded, resulting in an effective tax rate of approximately 32.0%. In conclusion, although revenue and income increased, the profit growth rate slowed relative to revenue growth due to higher expenses.

Key Financial Indicators

【Profitability】The Operating Income margin was 23.1% and the Net Income margin was 15.8%; both remained high, but declined by approximately 3.3pt and 1.8pt, respectively, from 26.4% and 17.6% in the same period of the previous year. The gross margin also declined to 35.0% from 36.6% in the same period of the previous year, confirming an increase in the cost-of-sales ratio.【Cash Flow Quality】The differences between Operating Income of ¥7.20B, Ordinary Income of ¥7.25B, and Profit Before Tax of ¥7.26B were small, indicating limited reliance on non-recurring gains and losses or non-operating income.【Investment Efficiency】Annualized ROE was 33.1% and the Equity Ratio was 61.5%, indicating favorable levels in terms of both capital efficiency and financial soundness. Basic EPS was ¥29.89, up 30.0% from ¥22.99 in the same period of the previous year.【Financial Soundness】Current assets of ¥51.55B versus current liabilities of ¥22.40B resulted in a current ratio equivalent to 230.1%, while cash and deposits of ¥25.51B accounted for 26.3% of total assets. Long-term borrowings were limited to ¥0.66B and bonds to ¥1.18B, indicating limited reliance on interest-bearing debt.

Cash Flow Analysis

As the amounts for Operating CF, Investing CF, and Financing CF in the cash flow statement are not included in the disclosed data, funding trends are analyzed based on changes in the balance sheet. The differences between Operating Income of ¥7.20B, Ordinary Income of ¥7.25B, and Profit Before Tax of ¥7.26B were small, indicating that earnings quality is supported by operating activities. Accounts receivable were ¥16.92B, equivalent to 54.3% of quarterly revenue of ¥31.14B, and decreased by ¥2.04B YoY. The fact that receivables have not accumulated even during a period of rapid revenue expansion is positive from a cash efficiency perspective. Inventories also declined by ¥0.92B YoY to ¥1.30B, and no working capital pressure is currently evident. Contract liabilities of ¥3.80B are based on consideration received and constitute a factor supporting short-term liquidity. Cash and deposits were ¥25.51B, securing a level exceeding current liabilities of ¥22.40B.

Quality of Earnings

The differences among Operating Income of ¥7.20B, Ordinary Income of ¥7.25B, and Profit Before Tax of ¥7.26B were small, indicating limited dependence on non-operating income and expenses. Non-operating income was limited to ¥0.08B and non-operating expenses to ¥0.02B; as interest income of ¥0.03B and interest expense of ¥0.01B were the main components, the financial balance does not significantly influence earnings. Meanwhile, the decline in the gross margin from 36.6% in the same period of the previous year to 35.0%, together with SG&A expense growth of 76.7%, exceeding the 50.6% revenue growth rate, indicates that profit growth during the period was accompanied by changes in the expense structure. Both accounts receivable and inventories declined YoY, and from an accrual perspective, factors hindering the conversion of earnings into cash are limited. Overall, earnings are composed primarily of recurring business income, and reliance on non-recurring factors is considered low.

Earnings Forecast and Guidance

The full-year company forecast is Revenue of ¥136.20B (+40.0% YoY), Operating Income of ¥31.40B (+35.8%), Ordinary Income of ¥31.60B (+36.3%), and Net Income of ¥21.50B (+40.6%). The Q1 progress rate was approximately 22.9% for Revenue, Operating Income, Ordinary Income, and Net Income alike. Although this is slightly below the standard quarterly progress rate of 25%, it cannot be considered a significant deviation. While the Q1 revenue growth rate of 50.6% exceeded the full-year forecast of 40.0%, the Operating Income growth rate of 31.7% was slightly below the full-year forecast of 35.8%. Achieving the full-year plan will therefore depend on improvements in the gross margin and SG&A ratio during the second half of the fiscal year, or the absorption of expenses through further revenue-scale expansion. No revision to the earnings forecast had been made as of the end of the quarter.

Shareholder Returns

The full-year dividend forecast is ¥46.00 per share, and the full-year EPS forecast is ¥130.14, implying a forecast Payout Ratio of approximately 35.3%. The Q2-end dividend forecast is ¥26, consisting of an ordinary dividend of ¥20 plus ¥6 commemorating the change of listing market to the TSE Prime and Nagoya Stock Exchange Premier markets. The commemorative dividend is a non-recurring shareholder return and should be evaluated separately from the ordinary dividend of ¥20. The forecast Payout Ratio of 35.3% is below the general sustainability benchmark of 60%; given cash and deposits of ¥25.51B and an Equity Ratio of 61.5%, the company has secured financial capacity to maintain dividends. No disclosure regarding share buybacks has been made, and the Total Return Ratio has not been calculated.

Risk Factors

1. Risk of expense growth exceeding revenue growth: SG&A expenses increased 76.7% YoY, exceeding the revenue growth rate of +50.6%. If this condition continues, the Operating Income margin of 23.1% could decline further from 26.4% in the same period of the previous year.

2. Decline in the gross margin: The gross margin declined by approximately 1.6pt from 36.6% in the same period of the previous year to 35.0%. If the decline continues due to higher costs or changes in the business mix, achieving the full-year Operating Income plan (+35.8% YoY) will become more challenging.

3. Accounts receivable collection efficiency: Accounts receivable of ¥16.92B equaled 17.5% of total assets and 54.3% of quarterly revenue. If collection terms deteriorate as revenue expands rapidly, a divergence could arise between accounting earnings and the timing of cash conversion.

Industry Benchmark (Reference; Company Research)

Profitability and Returns

Profitability is significantly above the industry median and is positioned in the upper quantiles.

Growth and Capital Efficiency

The revenue growth rate is outstanding within the industry and significantly exceeds the upper bound of the IQR.

※Source: Company research

Key Takeaways from the Earnings Results

1. The company achieved both high growth and high profitability, with Revenue up +50.6%, Operating Income up +31.7%, and Net Income up +35.5%. However, the Operating Income margin declined by approximately 3.3pt YoY, indicating that profit growth has slowed relative to revenue growth.

2. Annualized ROE was 33.1%, the Equity Ratio was 61.5%, and the current ratio was equivalent to 230.1%, demonstrating high levels of both profitability and financial soundness. The full-year progress rate was 22.9%, slightly below the standard progress rate of 25%, but the deviation was limited.

3. The Payout Ratio was approximately 35.3% (including the commemorative dividend), indicating a conservative shareholder-return policy relative to earnings and cash levels. Determining whether the decline in the gross margin and the increase in SG&A expenses are temporary or structural will be a key focus in assessing future profit-margin trends.

Theoretical Share Price (Reference Value)

Sensitivity: ¥692–¥735 at Cost of Equity ±1%, and ¥703–¥729 at ω±0.1.

Notes:

• Net assets as of the end of the quarter are used (there is a timing difference from 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 values based solely on publicly disclosed data; these are not forecasts of the market share price or recommendations for specific investment actions, and do not forecast or guarantee future share prices.)

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This report is an earnings analysis document automatically generated by AI through analysis of 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 discretion and responsibility, after consulting professionals as necessary.

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