Infomart Corporation FY2026 Q2 Earnings Report

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Executive Summary

This interim financial period was characterized by increased revenue and earnings, as well as a significant improvement in the operating margin, suggesting a qualitative enhancement in the earnings structure. Revenue amounted to ¥9.99B (+11.0% YoY), Operating Income was ¥2.12B (+49.1%), Ordinary Income was ¥2.00B (+41.3%), and consolidated Net Income was ¥1.17B (+36.1%). The primary reason that the earnings growth rate substantially exceeded the revenue growth rate was the exercise of operating leverage, as the gross profit margin increased to 74.9% (+2.0pt from 72.9% in the previous year) and the SG&A ratio declined to 53.7% (-3.4pt from 57.1% in the previous year). Meanwhile, progress against the full-year forecast was 46.8% for Revenue and 42.4% for Operating Income, slightly below the 50% midpoint benchmark, indicating progress against a plan weighted toward the second half.

Factors Affecting Results

【Revenue】The core BtoB-PF FOOD segment, which accounts for 62.3% of the revenue mix, grew +8.3% YoY, while the BtoB-PF ES segment, accounting for 37.7%, grew +15.8%. Both segments contributed to revenue growth, resulting in an overall increase of +11.0%. The ES Business is growing faster than the core business, indicating continued diversification of the business mix.

【Profit and Loss】Operating Income increased +49.1%, substantially exceeding the revenue growth rate. The primary factors were the expansion of the Operating Income margin to 21.2% (+5.4pt from 15.8% in the previous year), driven by an improvement in the gross profit margin (+2.0pt) and a decline in the SG&A ratio (-3.4pt). Ordinary Income decreased by approximately ¥0.12B from Operating Income and was limited to +41.3%, because non-operating expenses—including ¥0.02B in interest expenses and losses on equity-method investments—exceeded non-operating income of ¥0.01B. In addition, an impairment loss on investment securities of ¥0.11B was recorded as a one-time extraordinary loss, resulting in Profit Before Tax of ¥1.89B. Consolidated Net Income ended at +36.1%, representing growth in both revenue and earnings.

Segment Analysis

By segment, BtoB-PF FOOD maintained high profitability, with Revenue of ¥6.22B (+8.3%), Operating Income of ¥1.95B (+40.1%), and a 31.3% profit margin. It remains the earnings pillar, generating 91.9% of company-wide Operating Income. BtoB-PF ES reported Revenue of ¥3.77B (+15.8%), Operating Income of ¥0.17B (+446.6%), and a 4.5% profit margin, significantly expanding its profit level. Although the ES Business’s profit margin remains low compared with the FOOD Business, exceeding the break-even point as revenue increased was the primary reason for the sharp rise in earnings, indicating room for future margin improvement. During the previous interim period, goodwill increased by ¥1,162 million through the additional acquisition of Tanomu Co., Ltd. in the FOOD Business. The goodwill balance of ¥1.35B in the current period therefore includes this impact.

Key Financial Indicators

【Profitability】The Operating Income margin improved to 21.2%, up +5.4pt from 15.8% in the previous year, while the Net Income margin, on a consolidated basis, also rose to 11.7%, up +2.2pt from 9.6% in the previous year. ROE was 3.9%; the sharp increase in equity resulting from the public offering and disposal of treasury shares expanded the denominator and constrained the level.【Cash Quality】Operating CF was limited to ¥0.86B, resulting in a conversion ratio of approximately 0.73x relative to consolidated Net Income of ¥1.17B. The Operating CF-to-EBITDA ratio (OCF/EBITDA) was also approximately 0.30x, indicating that the pace of cash generation is somewhat lagging earnings growth.【Investment Efficiency】Total asset turnover was 0.295x and the EBITDA margin was 28.3%, reflecting a structure in which investment in intangible assets (¥6.22B, 18.4% of total assets) and goodwill (¥1.35B) is ahead of returns.【Financial Soundness】The Equity Ratio was 88.9%, up +22.1pt from 66.8% in the previous year. Cash and deposits increased to ¥18.30B (+197.4% from ¥6.16B in the previous year), while short-term borrowings declined to ¥0.68B (-70.0% from ¥2.27B in the previous year), substantially strengthening the financial foundation.

Cash Flow Analysis

Operating CF was ¥0.86B, down -51.1% YoY, warranting attention because the pace of cash generation has slowed relative to Net Income growth. Investing CF was -¥3.86B, primarily due to the acquisition of intangible assets of ¥1.15B, the acquisition of subsidiary shares of ¥1.93B, and the acquisition of investment securities of ¥0.53B. Capital expenditures were ¥0.02B, indicating restrained investment in tangible assets. As a result, Free CF (Operating CF + Investing CF) was -¥3.00B, meaning that current-period investment activities could not be funded solely by Operating CF. Financing CF resulted in a cash inflow of ¥15.15B. Capital raised through the disposal of treasury shares of approximately ¥13.97B and the issuance of new shares of ¥3.50B exceeded the net decrease in short-term borrowings of ¥1.59B and dividend payments of ¥0.73B, resulting in a substantial increase in cash and deposits to ¥18.30B. The Free CF shortfall has been supplemented by capital financing. Although there are no immediate liquidity concerns, investment recovery and improvement in Operating CF will be medium-term focal points.

Earnings Quality

The decrease from Operating Income of ¥2.12B to Ordinary Income of ¥2.00B, approximately ¥0.12B, was attributable to recurring factors, as non-operating expenses, including interest expenses and losses on equity-method investments, exceeded non-operating income. The ¥0.11B impairment loss on investment securities recorded as an extraordinary loss is distinguished as a one-time factor. Comprehensive Income was ¥1.13B, including ¥1.12B attributable to owners of the parent. The difference from consolidated Net Income of ¥1.17B was attributable to valuation differences on securities of -¥0.04B, and the divergence remained limited. From an accrual perspective, however, Operating CF of ¥0.86B was below consolidated Net Income of ¥1.17B, leaving the conversion ratio at approximately 0.73x. Trade receivables of ¥3.36B correspond to a collection period of approximately 61 days relative to interim-period Revenue, and the resulting working-capital funding requirements are a factor weighing on Operating CF. Goodwill amortization of ¥0.25B, compared with ¥0.42B in the previous year, is an expense recognition feature specific to JGAAP and should be noted as a factor that makes Net Income appear smaller than cash-based earnings power.

Earnings Forecast and Guidance

Progress against the full-year forecasts of Revenue of ¥21.35B, Operating Income of ¥5.00B, and Ordinary Income of ¥4.84B was 46.8% for Revenue, 42.4% for Operating Income, 41.3% for Ordinary Income, and 37.7% for Net Income (attributable to owners of the parent, against the forecast of ¥3.097B). All figures were below the 50% interim-period benchmark, indicating progress against a plan weighted toward the second half. There were no revisions to the earnings forecast or dividend forecast during the current quarter, and the Company has maintained its initial plan.

Shareholder Returns

The interim dividend was ¥3.29 per share, representing an increase of +47.5% from the previous year’s interim dividend of ¥2.23. The Payout Ratio relative to interim EPS of ¥4.62 was 71.2%, up from 59.5% in the same period of the previous year (dividend of ¥2.23/EPS of ¥3.75). Based on the full-year plan, the Payout Ratio calculated from the forecast dividend of ¥6.58 and forecast EPS of ¥11.92 is 55.2%. Although Free CF of -¥3.00B is below the funding requirements including dividend payments, the Company has sufficient capacity to continue paying dividends in the short term, given cash and deposits of ¥18.30B and low interest-bearing debt, including short-term borrowings of ¥0.68B.

Risk Factors

1. Segment concentration risk: The BtoB-PF FOOD segment accounts for 62.3% of Revenue and 91.9% of company-wide Operating Income, indicating a high degree of earnings dependence on a single segment. A slowdown in this segment would have a significant impact on company-wide results.

2. Divergence in cash-generation capacity: Operating CF of ¥0.86B is approximately 0.73x consolidated Net Income of ¥1.17B and approximately 0.30x EBITDA. The delay in cash conversion relative to earnings growth is a key monitoring point.

3. Intangible assets and goodwill balances: Goodwill of ¥1.35B and total intangible assets of ¥6.22B, equivalent to 18.4% of total assets, have been recorded, reflecting front-loaded investment in M&A and internally developed software. Depending on future business performance, the risk of impairment will require evaluation.

Industry Benchmark (Reference; Compiled by the Company)

Industry Benchmark (it_telecom)

Profitability and Returns

The Operating Income margin exceeds the industry median, while the Net Income margin is somewhat below the median due to the impact of goodwill amortization and non-operating expenses.

Growth and Capital Efficiency

The Revenue growth rate is below the industry median, placing the Company at a disadvantage relative to peers in terms of growth.

※Source: Compiled by the Company

Key Points from the Financial Results

1. The improvement in the Operating Income margin to 21.2% (+5.4pt YoY) was supported by an increase in the gross profit margin (+2.0pt) and a decline in the SG&A ratio (-3.4pt), indicating a qualitative change in the earnings structure beyond the effects of revenue growth alone.

2. The Equity Ratio surged to 88.9% (+22.1pt from 66.8% in the previous year), while cash and deposits also accumulated to ¥18.30B (+197.4%). Capital raised through the public offering and disposal of treasury shares substantially strengthened the financial foundation, while also contributing to the decline in total asset turnover.

3. Full-year progress was below the 50% interim-period benchmark, at 46.8% for Revenue and 42.4% for Operating Income. Revenue contributions from intangible-asset investments and M&A in the second half are prerequisites for achieving the full-year plan.

Theoretical Share Price (Reference Value)

This is a reference range mechanically calculated solely from publicly disclosed data using a residual income model (Ohlson model with an explicit five-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.

Sensitivity: ¥119–¥126 at ±1% for the Cost of Equity, and ¥122–¥123 at ±0.1 for ω.

Notes:

• Goodwill amortization of ¥1.8 per share is added back to earnings (to account for a non-cash expense and comparability with IFRS companies).
• Net assets as of the quarter-end 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 / Interest rate reference month: 2026-06 / This value does 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, and you should consult a professional as necessary.

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