All About,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥7.89B
• Operating Income: ¥-23M
• Net Income: ¥-55M
• EPS: ¥-4.40

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

Verdict: FY2026 Q2 was a mixed quarter with modest top-line growth but a small operating loss and a deeper net loss, offset by strong operating cash flow generation. Revenue grew 5.9% YoY to 78.95, while gross profit reached 50.43, implying a robust gross margin of 63.9%. SG&A of 50.66 slightly exceeded gross profit, resulting in operating income of -0.23 (operating margin roughly -0.3%). Ordinary income was -0.25 and net income was -0.61 (net margin -0.8%), with EPS at -4.40 yen. Non-operating items were small (income 0.12, expenses 0.14), and depreciation and amortization were 2.00, yielding EBITDA of 1.77 (2.2% margin). Margin comparison in basis points versus prior periods cannot be precisely quantified due to limited prior-period disclosures, but the operating loss narrowed YoY (company-reported +825.9% YoY), indicating operational improvement from a larger loss base. Earnings quality headline is mixed: operating cash flow was a healthy 5.87 despite the net loss, driving an OCF/NI ratio of -9.63x (negative by formula but signifying cash resilience rather than weakness). Liquidity is adequate with a current ratio of 136% and quick ratio of 130%; working capital stands at 16.09. Leverage appears manageable with a reported D/E of 1.03x and equity of 43.91 against total assets of 88.97. ROE is -1.4% on a DuPont basis (net margin -0.8%, asset turnover 0.887x, leverage 2.03x), with ROIC at -0.8%, below the 5% warning threshold. Tax expense of 0.29 despite a loss implies an abnormal effective tax rate (-113%), likely due to non-deductible items or valuation allowance effects. Given OCF strength and light capex (-0.26), proxy FCF appears positive (~5.6), but full investing/financing flows are partially unreported. Forward-looking, the key to restoring profitability is SG&A discipline and sustaining gross margins; if revenue growth continues in the mid-single digits and SG&A growth is contained, a return to positive operating margin is plausible. Monitoring the durability of cash generation (receivables/payables movements) and any impairment risks around goodwill/intangibles (3.09/13.48) is important. Overall, the quarter shows operational stabilization with cash support but profitability remains fragile.

Profitability Analysis

ROE decomposition (DuPont): ROE = Net Profit Margin × Asset Turnover × Financial Leverage = (-0.8%) × 0.887 × 2.03 ≈ -1.4%. The dominant drag is the negative net profit margin, as asset turnover is moderate for a digital/media-centric business and leverage is not excessive. Business driver: SG&A (50.66) marginally exceeded gross profit (50.43), tipping operating income to -0.23 despite a solid gross margin (63.9%), indicating insufficient operating leverage at current scale. Sustainability: gross margin appears structurally strong, but margin recovery requires SG&A containment or higher revenue scale; absent restructuring or operating leverage, improvement may be slow. Warning signs: SG&A is effectively 64% of revenue (50.66/78.95), roughly matching gross profit, leaving no room for operating profit; if SG&A growth outpaces revenue, profitability will remain negative. Non-operating items are net slight expense; tax burden was unusually high relative to losses (effective tax -113%), which is likely non-recurring but depresses net margin in the period.

Growth Assessment

Revenue grew 5.9% YoY to 78.95, indicating steady top-line momentum. Gross profit of 50.43 reflects healthy value capture (63.9% GPM), but operating profit remained negative due to SG&A intensity. The reported YoY improvement in operating income (+825.9%) suggests progress from a larger loss base; however, exact basis-point margin expansion cannot be quantified due to missing prior-period detail. Profit quality is mixed: EBITDA positive at 1.77 but net income negative (-0.61) with an abnormal tax expense. Outlook hinges on cost discipline and mix: maintaining gross margin while curbing SG&A could flip operating margin positive with continued mid-single-digit growth. Non-operating contributions were small and unlikely to alter the trajectory. Without segment data, sustainability of revenue growth (e.g., recurring vs project-based) cannot be assessed; caution is warranted on potential cyclicality in advertising/content-related demand.

Financial Health

Liquidity is adequate: current ratio 136% and quick ratio 130% exceed the 1.0 threshold though below the 1.5 benchmark; working capital is positive at 16.09. Cash and deposits of 15.20 provide a buffer, but cover only ~34% of current liabilities (44.20), so cash management remains important. Solvency appears acceptable with a reported D/E of 1.03x (well below the 2.0 warning). Maturity mismatch risk is contained: current assets (60.29) exceed current liabilities (44.20). Interest-bearing debt details are unreported, and interest coverage is N/A, limiting our ability to assess financing risk granularity. Noncurrent liabilities are minimal (0.86), suggesting limited long-term debt burden. No off-balance sheet obligations were disclosed in the data provided.

Cash Flow Quality

OCF was strong at 5.87 despite a net loss of -0.61, yielding an OCF/NI ratio of -9.63x (mechanically a red flag threshold but practically indicates cash generation outpaced accrual losses). This divergence likely stems from favorable working capital movements (e.g., receivables collection or payables timing), though detailed components are not disclosed. Capex was modest at -0.26, implying a proxy FCF of approximately 5.61 (OCF - Capex); however, full investing CF is unreported, so this FCF is indicative only. Cash generation appears sufficient to fund routine investments and a modest dividend, if any, but visibility is limited by missing investing/financing details. No obvious working capital manipulation can be confirmed or ruled out given the absence of cash flow detail by line; monitoring receivables days and payables days is advised.

Dividend Sustainability

Dividend disclosures are unreported; calculated payout ratio shows -70.0% (not meaningful due to negative earnings). With positive OCF (5.87) and low capex (-0.26), proxy FCF is positive, suggesting capacity to support a small dividend if policy mandates—but without reported dividend data, we cannot assess actual coverage. Given negative net income and ROIC (-0.8%), a conservative stance on distributions would be prudent until operating margins normalize. Policy outlook cannot be inferred from the provided data; watch for guidance on shareholder returns and any shift toward performance-linked distributions.

Risk Assessment

Business Risks:

• Operating leverage risk: SG&A (50.66) effectively absorbs gross profit (50.43), keeping operating margin negative.
• Demand cyclicality in advertising/content-related businesses, potentially impacting revenue growth and pricing.
• Execution risk in cost control and scaling initiatives required to restore operating profitability.
• Intangible asset and goodwill risk (intangible 13.48, goodwill 3.09) creating potential impairment exposure if performance weakens.
• Tax volatility: abnormal tax expense (0.29) despite a loss (effective tax rate -113%).
• Competitive pressure in digital media/commerce platforms potentially compressing margins.

Financial Risks:

• Profitability risk: negative net income (-0.61) and ROIC (-0.8%) below the 5% threshold.
• Liquidity concentration: cash (15.20) covers only ~34% of current liabilities (44.20), though overall current assets are adequate.
• Data gap on interest-bearing debt and interest coverage (N/A), limiting assessment of refinancing risk.
• Equity cushion is moderate (equity 43.91 vs assets 88.97); sustained losses could erode capital.

Key Concerns:

• Sustaining gross margin while bringing SG&A below gross profit to restore operating income.
• Reliance on working capital movements to support OCF; durability of cash generation uncertain without detail.
• Potential impairment triggers if growth slows, given material intangibles.
• Tax normalization risk, as unusual tax charges can swing net results.

Investment Implications

Key Takeaways:

• Top-line grew 5.9% YoY to 78.95; gross margin strong at 63.9%.
• Operating loss narrowed to -0.23, but SG&A still exceeds gross profit.
• OCF robust at 5.87; proxy FCF ~5.61 after modest capex, despite a net loss.
• Balance sheet liquidity adequate (current ratio 136%); leverage moderate (D/E 1.03x).
• ROE -1.4% and ROIC -0.8% highlight subpar capital efficiency that must improve.
• Abnormal tax expense depressed net income; non-operating impact otherwise minor.

Metrics to Watch:

• SG&A growth vs revenue growth (aim for SG&A/revenue to decline below ~60%).
• Operating margin progression toward sustained positive territory.
• Working capital metrics (DSO, DPO, inventory turns) to validate cash flow durability.
• ROIC trend toward >5% first, then toward 7–8%.
• Cash and deposits relative to current liabilities (liquidity headroom).
• Any signs of impairment on goodwill/intangibles; tax rate normalization.

Relative Positioning: Within small-cap digital/media peers, the company shows better-than-average gross margins but lags on operating leverage and capital efficiency; cash generation this quarter is a relative positive, but sustained profitability improvements are required to improve its standing.

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