UNITED,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥4.31B
• Operating Income: ¥-690M
• Net Income: ¥-686M
• EPS: ¥-16.48

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: Weak quarter with sharp top-line contraction and deeper operating losses, partially cushioned by a strong net cash balance. Revenue fell 31.8% YoY to 43.13, with gross profit of 14.18 and gross margin of 32.9%. SG&A of 21.08 exceeded gross profit, driving operating income to -6.90 (-52.1% YoY) and ordinary income to -7.20 (-53.1% YoY). Net income was -6.26 (-47.1% YoY), equating to a net margin of -14.5% and a calculated ROE of -3.3% via DuPont. Operating margin stands at roughly -16.0% (OI/Revenue), highlighting negative operating leverage on a lower revenue base. EBITDA was -5.91 with an EBITDA margin of -13.7%, underscoring that the cost base remains too heavy for current volumes. Operating cash flow deteriorated to -18.35, materially worse than the accounting loss, indicating cash burn that exceeds the P/L loss. Financing cash outflows of -21.00 included notable share repurchases of -11.29, accelerating net cash usage despite the loss profile. The balance sheet remains conservative with total assets of 210.34, equity of 190.63, and low financial leverage (D/E 0.10x; assets/equity 1.10x). Liquidity is ample: cash and deposits of 85.84, current assets of 179.55 vs current liabilities of 18.74 (current ratio 958%), implying no near-term funding stress. Interest burden is minimal (0.02), but interest coverage is negative due to operating losses. ROIC is -6.0%, pointing to value destruction at current profitability levels. Margin trends versus prior year cannot be quantified precisely from available data; however, the YoY declines in revenue and OI imply margin compression. Earnings quality is mixed: OCF/NI is 2.93x (formally above the 1.0 threshold) but both are negative, signaling that cash conversion is adverse. Forward-looking, profitability hinges on stabilizing revenue and re-cutting SG&A to restore operating leverage; the cash buffer buys time for restructuring but buybacks reduce that cushion. Near-term emphasis should be on cost discipline, mix improvement, and cautious capital return to preserve runway.

Profitability Analysis

ROE decomposition (DuPont): ROE = Net Profit Margin × Asset Turnover × Financial Leverage = (-14.5%) × (0.205) × (1.10) ≈ -3.3%. The dominant driver of the negative ROE is the net margin (-14.5%), as asset turnover is modest (0.205) and leverage is low (1.10x). The margin compression stems from revenue declining 31.8% YoY while SG&A (21.08) exceeded gross profit (14.18), resulting in an operating margin of about -16.0%. Business context suggests fixed cost intensity in SG&A and weaker topline drove negative operating leverage. Sustainability: absent a revenue recovery or SG&A rightsizing, current margins are not sustainable and will keep ROE negative; however, the low leverage limits downside amplification from financing. Concerning trend: SG&A growth vs revenue cannot be directly measured YoY from disclosed data, but in-period SG&A at 48.9% of revenue (21.08/43.13) indicates a structurally heavy overhead relative to current scale.

Growth Assessment

Revenue contracted 31.8% YoY to 43.13, indicating significant demand or client budget headwinds. Gross profit of 14.18 on a 32.9% margin implies limited pricing power or mix deterioration versus a compressed cost structure. Operating income declined 52.1% YoY to -6.90 as negative operating leverage magnified the revenue shortfall. Ordinary income and net income declines (-53.1% and -47.1% YoY, respectively) reflect limited offset from non-operating items (net -0.30). With EBITDA at -5.91, the core earnings engine is under pressure. Outlook hinges on stabilizing the topline (e.g., client activity recovery, product/solution ramp) and executing cost containment to realign SG&A with a lower revenue base. The absence of disclosed R&D and segment data limits visibility into growth investments versus maintenance spend. Near-term growth is likely constrained without a clear catalyst; watch for backlog/pipeline commentary, advertising demand trends, and any monetization improvements.

Financial Health

Liquidity is very strong: current assets 179.55 vs current liabilities 18.74 (current ratio 958.4%, quick ratio 956.6%). No warning on current ratio (<1.0) or leverage (D/E 0.10x); both are comfortably within conservative ranges. Cash and deposits of 85.84 substantially exceed short-term loans (1.00) and total interest-bearing loans (short-term 1.00, long-term 0.75), leaving the company in a net cash position. Maturity mismatch risk is low given abundant liquid assets relative to short-term obligations. Total equity of 190.63 supports low financial leverage (assets/equity 1.10x). No off-balance sheet obligations are disclosed in the provided data.

Cash Flow Quality

OCF of -18.35 versus net income of -6.26 yields an OCF/NI ratio of 2.93x; while numerically above the 0.8 threshold, both figures are negative, indicating cash burn exceeding accounting loss—an earnings quality concern. Working capital effects are not detailed, but the OCF shortfall suggests either receivable build, lower collections, or upfront cash costs not captured in accrual earnings. Capex is modest at -0.20, implying that free cash flow before financing is largely driven by the OCF deficit. With cash of 85.84, the company has runway; however, financing cash outflows of -21.00 (including -11.29 in buybacks) compound cash usage. No clear signs of working capital manipulation can be concluded from the limited breakdown, but monitoring AR turnover (10.52 AR) and payables (8.38) against revenue trajectory is important.

Dividend Sustainability

Dividend data is unreported; payout ratio shown as -309.9% is not meaningful given negative earnings and lack of disclosed dividend cash outflow. Capital returns appear focused on share repurchases, with -11.29 of buybacks in the period despite negative OCF. Sustainability depends on the pace of cash burn vs remaining cash (85.84) and future profitability. Given ROIC of -6.0% and negative EBITDA, continued buybacks would reduce financial flexibility without improving earnings capacity; a pause or reduction would enhance runway. Retained earnings remain substantial at 164.41, but cash flow generation, not accounting reserves, will dictate distribution capacity near term. Policy outlook likely cautious until operating profitability and OCF turn positive.

Risk Assessment

Business Risks:

• Demand cyclicality and client budget cuts driving a 31.8% YoY revenue decline
• Negative operating leverage with SG&A exceeding gross profit (21.08 vs 14.18)
• Execution risk in cost restructuring to match a lower revenue base
• Product/segment mix risk affecting gross margin (32.9%) and monetization
• Potential regulatory and platform changes in digital advertising/IDFA-type privacy headwinds (industry-specific)

Financial Risks:

• Sustained cash burn (OCF -18.35) despite significant buybacks (-11.29)
• ROIC at -6.0% indicating value destruction if maintained
• Interest coverage negative due to operating losses, albeit with minimal absolute interest expense
• Possible acceleration of cash outflows if working capital turns unfavorable

Key Concerns:

• Net margin -14.5% and operating margin ~-16.0% with limited non-operating offsets
• Revenue downshift without disclosed growth investments or pipeline visibility
• Capital allocation: buybacks during loss-making period reduce liquidity buffer
• Limited disclosures (R&D, segment, dividend details) constrain analysis and risk identification

Investment Implications

Key Takeaways:

• Top-line fell 31.8% YoY, pushing operating income to -6.90 and net income to -6.26
• OCF (-18.35) is weaker than accounting loss, highlighting cash conversion pressure
• Balance sheet is net cash with very high liquidity (current ratio ~9.6x; cash 85.84)
• ROE -3.3% driven by negative margins; leverage is low and not a driver
• ROIC -6.0% underscores the need for either margin repair or portfolio optimization
• Share repurchases of 11.29 amid losses accelerate cash depletion

Metrics to Watch:

• Quarterly revenue trajectory and client demand indicators
• Operating margin and SG&A/Revenue ratio (48.9% this period)
• OCF and working capital movements (AR 10.52; AP 8.38) versus sales
• Cash balance runway versus ongoing buybacks and potential debt changes
• ROIC progression and any portfolio/segment actions to lift returns

Relative Positioning: Within domestic digital advertising/adtech peers, the company currently sits on the conservative end of leverage (net cash) but weaker on growth and profitability, with negative EBITDA and ROIC below peer medians; liquidity is a differentiator, but operational metrics trail until revenue stabilizes and costs are right-sized.

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