Temairazu,Inc. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥580M
• Operating Income: ¥395M
• Net Income: ¥267M
• EPS: ¥42.85

Income Statement

Balance Sheet

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

Temairazu Co., Ltd. reported FY2026 Q1 single-entity results with steady top-line growth but signs of margin normalization. Revenue rose 9.3% year over year to ¥580 million, while operating income increased 2.7% to ¥395 million, indicating modest negative operating leverage this quarter. Gross profit was ¥465.9 million, implying an 80.3% gross margin consistent with a capital-light, software/service-heavy model. Operating margin stood at a robust 68.1%, though the slower growth in operating income versus revenue suggests higher operating costs (or increased strategic spend) versus the prior year. Ordinary income of ¥401 million includes about ¥6 million in net non-operating gains. Net income was ¥267 million, translating to a 46.0% net margin; the implied tax burden is about 30% when compared to ordinary income (income taxes of ¥120.5 million divided by ¥401 million). DuPont metrics show a calculated ROE of 4.02% based on net margin of 46.03%, asset turnover of 0.083x, and financial leverage of 1.05x. The ROE level appears constrained primarily by very low asset turnover and low leverage, despite exceptional margins. The balance sheet is conservative: total liabilities were ¥449.7 million against total equity of ¥6,644 million, implying an estimated equity ratio of roughly 95.4% (equity/total assets) despite the disclosed equity ratio being 0.0% (likely not reported). Liquidity is very strong with a current ratio of 1,588.8% and working capital of ¥6,694.8 million, although cash detail was not disclosed this quarter. Cash flow figures were not reported in this release (OCF, FCF, and C&Equivalents all show as zero because they are undisclosed), limiting assessment of earnings-to-cash conversion. Dividend information was also not provided (DPS and payout ratio recorded as zero due to non-disclosure), so policy and coverage cannot be evaluated from this dataset. EPS was ¥42.85; the implied average share count is roughly 6.2 million based on net income, though exact shares outstanding were not disclosed here. Overall, the company remains highly profitable and financially conservative, but the quarter exhibits softer operating leverage and limited disclosure on cash flows and dividends. Key watchpoints are the trajectory of operating expenses relative to revenue, the sustainability of very high margins, and forthcoming disclosures on cash flows and shareholder returns. Given the single-quarter snapshot and missing items, conclusions should be viewed in light of data limitations. The core fundamentals still point to a high-margin, low-capital-intensity model with strong balance sheet resilience.

Profitability Analysis

ROE decomposition (DuPont): Net margin 46.03% × Asset turnover 0.083 × Financial leverage 1.05 = ROE 4.02%. Margin quality: Gross margin 80.3% (¥465.9m GP on ¥580.0m sales) underscores a software/service model with minimal cost of sales (¥64.7m). Operating margin 68.1% (¥395.0m OI) remains exceptional; SG&A is inferred at ~¥70.9m (GP − OI), or ~12.2% of revenue. Ordinary margin 69.1% (¥401.0m/¥580.0m) reflects modest non-operating gains (¥6m). Net margin 46.0% (¥267.0m/¥580.0m) is robust after an implied ~30% tax on ordinary income (¥120.5m/¥401.0m). Operating leverage: Revenue grew 9.3% YoY vs. operating income +2.7% YoY, indicating cost growth outpaced revenue, compressing incremental margins in the quarter. Efficiency: Very low asset turnover (0.083x) and low leverage (1.05x) are the principal drags on ROE despite top-tier margins. Interest expense was not disclosed (listed as zero), consistent with a low-debt profile; interest coverage therefore cannot be meaningfully assessed this quarter from disclosed data.

Growth Assessment

Revenue growth of 9.3% YoY to ¥580.0m suggests steady demand in core services. Profit growth was more modest: operating income +2.7% YoY and net income +0.5% YoY, indicating mix and/or cost pressures. The widening gap between revenue and operating income growth points to lower incremental operating margin this quarter, possibly from higher personnel, development, or marketing costs to support growth. Gross margin at 80.3% remains strong, implying no significant pricing or direct cost pressure at the cost-of-sales level. The small uplift in ordinary income relative to operating income (¥401.0m vs. ¥395.0m) adds modest support from non-operating items, but the core driver remains operations. EPS of ¥42.85 reflects the earnings level; with no share count disclosed here, potential dilution or buybacks cannot be assessed. With cash flow data unavailable, assessing sustainability via cash conversion is not possible from this release. Near-term outlook hinges on the company’s ability to balance growth investments with margin preservation; if SG&A growth normalizes below revenue growth, operating leverage can re-accelerate. Given the business model’s capital-light nature, longer-term growth should continue to translate to high margins if churn remains low and ARPU is stable or rising. However, quarterly variability in expense timing can cause temporary divergence between revenue and profit growth.

Financial Health

Liquidity appears very strong: current assets ¥7,144.5m vs. current liabilities ¥449.7m yields a current ratio of 1,588.8% and working capital of ¥6,694.8m. Quick ratio mirrors the current ratio given no inventories reported (inventories undisclosed). Solvency: total liabilities ¥449.7m vs. total equity ¥6,644.0m implies a conservative capital structure; estimated equity ratio is ~95.4% (¥6,644.0m/¥6,962.0m) despite the reported equity ratio field showing 0.0% (not disclosed). Debt-to-equity of 0.07x indicates minimal leverage. The discrepancy where current assets exceed total assets suggests classification/reporting timing differences in this dataset; nonetheless, the directionality indicates strong liquidity. Cash and equivalents were not disclosed; however, historically this model tends to be cash-rich—confirmation awaits cash flow statement detail. There are no signs of near-term balance sheet stress.

Cash Flow Quality

OCF, investing CF, financing CF, and cash balances were not disclosed this quarter (zeros in the dataset indicate non-disclosure). As such, OCF/Net Income and free cash flow cannot be evaluated from reported figures (the 0.00 ratios presented are placeholders). Earnings quality from an accruals perspective cannot be quantified without working capital and OCF detail. The income statement’s high margins and low interest burden suggest an inherently cash-generative profile, but verification requires actual OCF and cash balances. Working capital appears ample (¥6,694.8m), but the composition (cash vs. receivables vs. other) is undisclosed, limiting insight into collections and deferred revenue movements. Capex and software development capitalization (if any under JGAAP) were not provided, preventing an assessment of maintenance vs. growth investment needs. Overall, cash flow quality is indeterminable this quarter from the provided data; future filings with OCF and C/F detail will be key.

Dividend Sustainability

Dividend per share and payout ratio were not disclosed (zeros indicate non-disclosure). Without DPS and OCF/FCF details, payout coverage analysis cannot be performed. Given net income of ¥267.0m and an apparently net-cash balance sheet, the capacity for distributions could be strong in principle, but policy and actual distributions remain unknown from this release. EPS was ¥42.85; absent share count and retained earnings movement disclosures, we cannot derive total dividend outflow. Monitor upcoming disclosures for DPS guidance, payout policy updates, and cash flow coverage.

Risk Assessment

Business Risks:

• Exposure to lodging and travel activity; demand cyclicality tied to domestic and inbound tourism.
• Customer concentration within hospitality verticals increases sensitivity to industry shocks.
• Competitive pressure from alternative software/aggregators and platform dependencies (e.g., OTA connectivity).
• Pricing power and churn risk in a subscription-like revenue model.
• Cybersecurity, data privacy, and service uptime risks for mission-critical connectivity.
• Talent retention and wage inflation impacting SG&A and development costs.
• Potential regulatory changes affecting online travel distribution and data handling.

Financial Risks:

• Low asset turnover constrains ROE despite high margins.
• Limited disclosure this quarter on cash, OCF, and capex impairs cash conversion assessment.
• Single-entity reporting may omit risks or buffers present at a consolidated level (if any in other periods).
• Interest rate environment has limited direct impact given low leverage, but deposit income variability may affect non-operating results.

Key Concerns:

• Negative operating leverage this quarter: revenue +9.3% vs. operating income +2.7%.
• Absence of cash flow disclosure prevents validation of earnings quality and FCF.
• Dividend policy and distributions not disclosed; shareholder returns unclear.
• Data fields such as equity ratio and cash appear unreported, reducing analytical precision.

Investment Implications

Key Takeaways:

• High-margin, capital-light model with gross margin 80.3% and operating margin 68.1%.
• Growth remains positive (revenue +9.3% YoY) but operating leverage softened (OI +2.7%).
• Balance sheet conservatism: estimated equity ratio ~95% and D/E 0.07x.
• ROE of 4.02% is held back by very low asset turnover (0.083x) and low leverage.
• Cash flow and dividend disclosure gaps are the main analytical limitations this quarter.

Metrics to Watch:

• Operating expense growth vs. revenue (SG&A as % of sales).
• Customer metrics: churn, ARPU, number of contracted facilities, upsell/cross-sell.
• Deferred revenue/contract liabilities and OCF to gauge cash conversion.
• Cash and equivalents, interest income, and any capex or software capitalization.
• Operating margin trajectory and non-operating items.
• Dividend policy updates (DPS, payout ratio) and capital allocation.

Relative Positioning: Within Japan-listed software/service providers to hospitality, Temairazu appears differentiated by very high margins and a cash-lean balance sheet, positioning it as a high-quality, capital-light operator; however, ROE trails some peers due to low asset turnover and minimal leverage.

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