Aoba-BBT,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥3.82B
• Operating Income: ¥197M
• Net Income: ¥93M
• EPS: ¥7.97

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Aoba-BBT reported FY2026 Q2 consolidated results under JGAAP with revenue of ¥3,817mn, up 1.0% YoY, indicating modest top-line growth. Gross profit was ¥1,498.6mn, translating to a gross margin of 39.3%, reflecting stable cost control and a service-heavy model. Operating income rose 3.4% YoY to ¥197mn, pushing the operating margin to roughly 5.2% and demonstrating slight operating leverage despite muted revenue growth. Ordinary income of ¥203mn and net income of ¥100mn (EPS ¥7.97) imply a net margin of 2.62%, consistent with a business that invests in content and platform while maintaining profitability. DuPont decomposition indicates ROE of 2.22% driven by a 2.62% net margin, 0.503x asset turnover, and 1.68x financial leverage—an ROE that is positive but subdued relative to typical education-service peers. The balance sheet shows total assets of ¥7,590mn and equity of ¥4,510mn, yielding a liabilities-to-equity ratio of 0.63x and suggesting moderate leverage and generally conservative capital structure. Liquidity appears adequate with current assets of ¥3,179.2mn against current liabilities of ¥2,452.1mn, giving a current ratio of 129.6% and working capital of ¥727.1mn. Operating cash flow was strong at ¥899.8mn, equating to 9.0x net income, which likely reflects substantial tuition prepayments and favorable working capital movements typical for education businesses; however, this can be seasonal and reversible in the second half. Depreciation and amortization totaled ¥113.6mn, bringing EBITDA to ¥310.6mn and an EBITDA margin of 8.1%, which underscores a relatively asset-light model. Interest expense was minimal at ¥0.8mn, and interest coverage based on operating income stood at a robust 258.5x, indicating negligible refinancing risk from interest burden. The reported effective tax rate metric appears as 0.0% in the supplied data, but line items suggest taxes of ¥96.9mn versus net income of ¥100mn, implying a roughly mid- to high-40% effective rate on a simple pre-tax reconstruction; tax interpretation should be handled cautiously. Dividends and share data appear as zeros, which we treat as unreported rather than zero; therefore, payout and DPS cannot be assessed from the provided dataset. The equity ratio is also shown as 0.0%, which is an unreported metric; based on the provided leverage figure (1.68x), implied equity-to-asset ratio would be near 60%, consistent with the balance sheet. Overall, Aoba-BBT exhibits steady profitability, modest operating leverage, strong cash conversion, and moderate balance-sheet risk. Key uncertainties include the sustainability of working-capital-driven OCF, the trajectory of enrollment and ARPU, and potential second-half seasonality. Given the data gaps (investing CF, dividends, share count, cash), conclusions emphasize trends in reported items while acknowledging limitations.

Profitability Analysis

ROE of 2.22% is explained by net margin of 2.62%, asset turnover of 0.503x, and financial leverage of 1.68x, indicating that returns are primarily constrained by modest margins and relatively low asset intensity rather than leverage. Operating margin is 5.2% (¥197mn/¥3,817mn), improving versus revenue growth (+3.4% OI vs +1.0% revenue), suggesting slight operating leverage from fixed-cost absorption and discipline in SG&A. Gross margin at 39.3% is solid for education/services, implying stable cost of sales and potentially favorable course mix or utilization. EBITDA margin is 8.1%, demonstrating an asset-light profile; D&A of ¥113.6mn points to moderate capitalized content or software amortization. Ordinary margin at 5.3% slightly exceeds operating margin, reflecting minimal non-operating costs/interest. Net margin at 2.62% is compressed by taxes and potentially non-operating items; reconstructed tax burden suggests a relatively high effective rate. Overall margin quality appears decent, with modest YoY operating leverage and limited financing drag.

Growth Assessment

Revenue growth of +1.0% YoY indicates stability but not acceleration; topline likely reflects steady enrollment/ARPU rather than new program scale-ups. Operating income growth of +3.4% YoY outpaced revenue, pointing to efficiency gains or expense discipline and suggesting incremental operating leverage. Net income increased +2.6% YoY, tracking operating trends after taxes. The sustainability of growth hinges on enrollment trends, course utilization, and pricing; no segment detail is provided, so we cannot disaggregate B2C vs. corporate training contributions. The strong OCF relative to earnings may reflect upfront tuition receipts, indicating demand is intact, though this may be seasonal. Profit quality appears acceptable given EBITDA margin of 8.1% and minimal interest expense; however, tax burden and potential non-recurring items could weigh on net growth. Near-term outlook is for steady, low-single-digit growth unless there is a catalyst from new programs, price adjustments, or geographic/online expansion; data limitations preclude formal guidance triangulation.

Financial Health

Liquidity is adequate with a current ratio of 129.6% and quick ratio identical given inventories are unreported; working capital stands at ¥727.1mn. Solvency is comfortable: total liabilities of ¥2,839.2mn vs equity of ¥4,510.0mn yields a debt-to-equity of 0.63x, and interest burden is minimal (¥0.8mn). Interest coverage at 258.5x is very strong, limiting financing risk. Total assets are ¥7,590.0mn; the provided equity ratio is shown as 0.0% but is unreported—implied equity-to-assets based on leverage (1/1.68) suggests around 59–60%, consistent with the balance sheet. Cash and equivalents are shown as 0 (unreported), so immediate cash liquidity cannot be assessed from the dataset. Overall, the capital structure is conservative and well-matched to the cash-generative, prepayment-supported model.

Cash Flow Quality

Operating cash flow of ¥899.8mn is 9.0x net income, indicating strong cash conversion; this likely includes significant increases in deferred revenue or other working-capital inflows typical of tuition prepayments. EBITDA (¥310.6mn) vs OCF suggests OCF benefited from working capital far beyond non-cash D&A, highlighting potential seasonality and timing effects that may normalize in H2. Investing cash flow is shown as 0 (unreported), so free cash flow cannot be reliably derived despite the provided FCF metric being 0 in the dataset; we refrain from concluding on true FCF without capex/content investment data. Financing CF of -¥170.8mn suggests shareholder returns or debt service, but components are not disclosed. Earnings quality appears sound at the operating level, but the unusually high OCF/NI ratio warrants caution as it may partly reverse. Monitoring deferred revenue, receivables aging, and capex/intangible additions is essential to validate sustainable FCF.

Dividend Sustainability

Annual DPS is shown as 0.00 and payout ratio 0.0%, which we treat as unreported rather than actual. With EPS of ¥7.97 and strong OCF, coverage of a modest dividend would appear feasible in principle; however, absent confirmed DPS, historical policy, and investing cash needs, sustainability cannot be concluded. FCF coverage is listed as 0.00x due to unreported investing CF; thus, payout capacity should be evaluated once capex/content spend and policy guidance are available. Balance sheet leverage is moderate and interest burden low, which is supportive for potential distributions, subject to growth investment needs.

Risk Assessment

Business Risks:

• Enrollment and retention volatility affecting tuition and utilization
• Pricing pressure in corporate training and online education
• Content refresh and platform investment requirements
• Seasonality and timing of course starts impacting quarterly results
• Competition from domestic and global EdTech providers
• Regulatory or accreditation changes in education services

Financial Risks:

• High OCF/NI driven by working capital that may reverse in H2
• Visibility on capex/intangible spend is limited (investing CF unreported)
• Tax burden variability impacting net margin
• Potential mismatch if deferred revenue balances contract without equivalent cost flexibility
• Limited disclosure on cash and liquidity buffers (cash balance unreported)

Key Concerns:

• Sustainability of cash conversion absent detailed working-capital and deferred revenue data
• Muted revenue growth at +1.0% YoY constraining scale benefits
• Data gaps in investing CF, dividends, cash, and share count limiting per-share and FCF analysis

Investment Implications

Key Takeaways:

• Modest top-line growth with slight operating leverage (OP +3.4% vs sales +1.0%)
• Healthy margins for the model: GP 39.3%, EBITDA 8.1%, OP ~5.2%
• Strong OCF (¥899.8mn; 9.0x NI) likely buoyed by prepayments—may be seasonal
• Conservative balance sheet and minimal interest burden (coverage 258.5x)
• ROE is modest at 2.22%, constrained by net margin and asset turnover
• Dividend capacity cannot be assessed due to unreported DPS/FCF details

Metrics to Watch:

• Enrollment, ARPU, and retention across programs
• Deferred revenue and contract liabilities as indicators of demand and cash timing
• Capex and intangible additions (content/platform) to gauge true FCF
• SG&A efficiency and operating margin progression
• Tax rate normalization and its impact on net margin
• Receivables days and refund rates

Relative Positioning: Within Japan’s education and EdTech peer set, Aoba-BBT exhibits steady growth, solid gross margins, strong cash generation from prepayments, and low financing risk, but with modest ROE and limited visibility on FCF and dividends due to disclosure gaps.

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