FIT EASY (212A) FY2026 Q3 Earnings Report

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Executive Summary

Revenue and profits both increased substantially, resulting in earnings that achieved both growth and profitability. Revenue was ¥106.2B (+54.4% YoY), Operating Income was ¥25.1B (+41.3%), Ordinary Income was ¥25.4B (+42.7%), and Net Income was ¥17.2B (+45.7%). Although the Revenue growth rate exceeded the Operating Income growth rate and the Operating Income margin declined from the same period of the previous year due to the front-loaded increase in SG&A expenses, the growth in absolute profit was strong. Progress against the full-year company forecast was 74.2% for Revenue, 71.5% for Operating Income, and 69.8% for Net Income, slightly below the standard 75% level. Profitability in Q4 will therefore be the key to achieving the full-year plan.

Factors Affecting Earnings

【Revenue】Revenue was ¥106.2B, representing a substantial increase of +54.4% YoY. This was an increase of ¥37.4B from ¥68.8B in the same period of the previous year, indicating that business expansion is continuing. Progress against the full-year forecast of ¥143.2B was 74.2%, remaining slightly below the standard 75% progress level.

【Income and Loss】Operating Income was ¥25.1B (+41.3%), Ordinary Income was ¥25.4B (+42.7%), and Net Income was ¥17.2B (+45.7%), all representing substantial increases. Meanwhile, the gross profit margin was 35.4%, down approximately 1.1pt from 36.5% in the same period of the previous year, while the Operating Income margin was 23.6%, down approximately 2.2pt from 25.8%. The primary reason was that SG&A expenses increased to ¥12.5B, up +69.0% YoY, exceeding the Revenue growth rate. The difference between Ordinary Income and Net Income was attributable to income taxes and other taxes of ¥8.1B (effective tax rate: 31.9%); no impact from one-time gains or losses was identified. Although the Company achieved higher Revenue and profits and profitability remains at a high level, a decline in margins due to accelerating expenses can be observed.

Key Financial Indicators

【Profitability】The Operating Income margin of 23.6% and Net Income margin of 16.2% both declined from the same period of the previous year (25.8%, 17.2%), but remain high in absolute terms. The gross margin was 35.4%, down approximately 1.1pt from 36.5% in the same period of the previous year. While the cost ratio was almost unchanged, the SG&A ratio increased to 11.8% from 10.8%, making it the primary factor behind the decline in profitability.【Cash Quality】Interest income of ¥0.2B exceeded interest expense of ¥0.04B, resulting in positive net financial income and indicating that financial costs do not structurally erode earnings.【Investment Efficiency】Annualized ROE was high at 34.0%. Supported by the Net Income margin and an almost unchanged total asset turnover ratio, dependence on financial leverage is limited. Basic EPS was ¥103.79 (¥74.63 in the previous year), while diluted EPS was ¥101.56.【Financial Soundness】The Equity Ratio was 58.4%, maintained at the same level as the previous year. Total assets increased to ¥115.8B, and net assets expanded to ¥67.6B. Long-term borrowings were reduced to ¥0.4B, indicating progress in restraining financial leverage.

Cash Flow Analysis

Although the cash flow statement has not been disclosed, certain aspects of fund movements can be inferred from the balance sheet. Cash and deposits decreased to ¥26.4B from ¥32.7B in the same period of the previous year, while accounts receivable were ¥21.1B and retained earnings were ¥41.0B, an increase of ¥8.8B from the previous year, indicating continued accumulation of retained earnings accompanying profit growth. Contract liabilities increased by ¥3.0B to ¥6.4B from ¥3.4B in the same period of the previous year, suggesting that the accumulation of deferred revenue may be supporting part of working capital. Long-term borrowings decreased by ¥0.4B YoY, indicating that the Company is pursuing business expansion while limiting its dependence on borrowings.

Quality of Earnings

No one-time factors such as extraordinary gains or losses were identified in current-period earnings. The progression from Operating Income to Ordinary Income and Net Income reflects recurring non-operating income and expenses and tax expenses. Non-operating income was ¥0.3B and non-operating expenses were ¥0.1B, both small in scale, indicating that Ordinary Income is primarily supported by Operating Income from the core business. The ¥8.1B difference between Ordinary Income and Net Income was attributable to income taxes and other taxes (effective tax rate: 31.9%), and no qualitative concerns regarding accruals were identified. However, the sharp increase in contract liabilities (+88.6% YoY) entails future service obligations; therefore, continued monitoring of the timing of revenue recognition and the status of fulfillment is advisable.

Earnings Forecasts and Guidance

The full-year company forecast is Revenue of ¥143.2B (+47.2% YoY), Operating Income of ¥35.1B (+51.7%), Ordinary Income of ¥35.6B (+53.5%), and Net Income of ¥24.7B (+61.8%). Progress through Q3 was 74.2% for Revenue, 71.5% for Operating Income, 71.2% for Ordinary Income, and 69.8% for Net Income, all slightly below the standard 75% level. To achieve the forecast, Q4 must generate Revenue of ¥37.0B and Operating Income of ¥10.0B, requiring an Operating Income margin of 27.0%, which exceeds the cumulative actual margin of 23.6%. No revision to the earnings forecast was made during the current quarter.

Shareholder Returns

The Q2 dividend was ¥26.00 per share, consisting of a regular dividend of ¥20.00 and a commemorative dividend of ¥6.00 to mark the transfer to the TSE Prime and Nagoya Stock Exchange Premier markets. The full-year dividend forecast is ¥51.00, and the expected Payout Ratio based on full-year forecast EPS of ¥148.58 is approximately 34.3%. Based on the Q2 dividend paid, the Payout Ratio against cumulative Q3 Net Income of ¥17.2B is 25.2%. Since the commemorative dividend is temporary in nature, it should be distinguished from the regular dividend when assessing the sustainable level of shareholder returns. No data regarding share repurchases has been disclosed.

Risk Factors

1. Profitability trends: SG&A expenses increased +69.0% YoY, exceeding the Revenue growth rate, and the Operating Income margin declined by approximately 2.2pt from the same period of the previous year. The key issue going forward will be determining whether the increase in expenses represents temporary growth investment or a structural rise in costs.

2. Profitability required to achieve the full-year plan: The progress rate for full-year forecast Operating Income was only 71.5%, and an Operating Income margin of 27.0% will be required in Q4, above the cumulative actual margin of 23.6%.

3. Store and contract-related exposure: Security deposits received of ¥19.7B, asset retirement obligations of ¥1.3B, and contract liabilities of ¥6.4B indicate increasing capital tied up in store expansion and future service obligations. Considerable financial capacity, including a current ratio of 197.4% and a Debt/Capital ratio of 0.6%, provides a buffer.

Industry Benchmark (Reference; Company Analysis)

Industry Benchmark (it_telecom)

Profitability and Returns

The Company is substantially above the industry median, with profitability at the upper end of the industry.

Growth and Capital Efficiency

The Revenue growth rate also substantially exceeds the industry median, indicating an outstanding pace of growth within the industry.

※Source: Company analysis

Key Earnings Highlights

1. The Company maintained high growth rates, with Revenue up +54.4%, Operating Income up +41.3%, and Net Income up +45.7%. The Operating Income margin of 23.6% and annualized ROE of 34.0% are also at the upper end compared with the industry.

2. Due to the increase in the SG&A ratio (10.8% in the same period of the previous year → 11.8%), the Operating Income margin declined by approximately 2.2pt YoY. Determining whether the growth investment is temporary or structural will be a key focus going forward.

3. The progress rate for full-year forecast Operating Income was 71.5%, slightly below the standard progress level. The achievement of the 27.0% Operating Income margin required in Q4 will be the key earnings focus.

Theoretical Share Price (Reference Value)

Sensitivity: ¥787–¥836 at a cost of equity of ±1%; ¥799–¥829 at ω of ±0.1.

Notes:

• Net assets as of the quarter-end are used (there is a timing gap relative to the full-year forecast).
• Since net assets include non-controlling interests, the theoretical values may be calculated somewhat higher.

(Calculation model: Residual Income Model (Ohlson-type, explicit 5-year fade) / Interest rate reference month: 2026-08 / 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 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, after consulting with a professional as necessary.

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