TSUBURAYA FIELDS HOLDINGS (2767) FY2026 Q3 Earnings Report

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Executive Summary

The Company posted a high-growth performance characterized by increases in both revenue and profit, as well as improved profit margins, driven by substantial revenue and profit growth in its core Amusement Equipment Business. Revenue was ¥1,546.2B (+58.2% YoY), Operating Income was ¥185.3B (+97.3%), Ordinary Income was ¥189.4B (+76.0%), and Net Income was ¥135.8B (+74.7%). The Operating Margin improved to 12.0% from approximately 9.6% in the same period of the previous year, reflecting not only the impact of higher revenue but also improved profitability in the core business.

Factors Affecting Performance

【Revenue】Revenue was ¥1,546.2B, representing a 58.2% YoY increase. External revenue from the Amusement Equipment Business was ¥1,428.4B (+70.1% YoY), accounting for approximately 92% of consolidated revenue and contributing more than the ¥568.5B increase in consolidated revenue. In contrast, the Content & Digital Business generated ¥104.3B (▲16.9% YoY), representing a decline, indicating that growth within the business portfolio is concentrated in the Amusement Equipment Business.

【Profit and Loss】Operating Income was ¥185.3B, increasing 97.3% YoY, exceeding the rate of revenue growth and demonstrating operating leverage. The primary factor was the increase in segment profit of the Amusement Equipment Business to ¥201.5B (+135.2% YoY), with its margin rising to 14.1% from 10.2% in the previous year. The Content & Digital Business recorded segment profit of ¥9.2B (▲67.0% YoY), while its margin declined from 22.3% to 8.8%, weighing on consolidated profit growth. Ordinary Income finished at a level close to Operating Income, as non-operating income and expenses resulted in a modest net gain of ¥4.1B. Net Income was ¥135.8B after deducting net extraordinary losses of ¥1.2B, including impairment losses of ¥1.6B. The Company therefore posted increases in both revenue and profit.

Segment Analysis

The Amusement Equipment Business achieved substantial increases in both revenue and profit, with external revenue of ¥1,428.4B (+70.1% YoY) and segment profit of ¥201.5B (+135.2%), while its margin rose to 14.1%. The Content & Digital Business experienced declines in both revenue and profit, with external revenue of ¥104.3B (▲16.9% YoY) and segment profit of ¥9.2B (▲67.0%), while its margin declined from 22.3% to 8.8%. Company-wide expenses (adjustments) increased 29.6% to ¥25.7B from ¥19.9B in the previous year, but the increase was below the 58.2% revenue growth rate and did not result in deterioration in the fixed-cost burden. Consolidated profit growth resulted from a further increase in the Company’s dependence on the Amusement Equipment Business.

Key Financial Metrics

【Profitability】The Operating Margin improved to 12.0% from approximately 9.6% in the previous year, while the Net Profit Margin improved to 8.8% from approximately 6.6%. The Gross Margin was 22.2%, with the relative decline in the cost ratio, in addition to revenue growth, supporting the improvement in profitability.【Cash Flow Quality】Accounts receivable and notes receivable were ¥367.4B, accounting for 25.9% of total assets. Inventories, including work in process, are expanding, indicating an increase in working capital accompanying revenue growth.【Investment Efficiency】ROE was high at 20.2%, with improved profitability serving as the primary driver.【Financial Soundness】The Equity Ratio was 47.3%, down from approximately 52.0% in the previous year. Current assets of ¥1,121.1B versus current liabilities of ¥610.2B resulted in a current ratio of 183.7%, indicating sound short-term payment capacity. Interest-bearing debt remained limited to ¥74.7B, and financial leverage was restrained.

Cash Flow Analysis

Although detailed data from the cash flow statement were not provided, trends in funding can be inferred from changes in the balance sheet. Cash and deposits increased to ¥365.1B from ¥309.5B in the previous year, suggesting that profit generation accompanying business expansion contributed to the accumulation of cash. Meanwhile, accounts receivable and notes receivable were ¥367.4B, and inventories including work in process also expanded, indicating the possibility that funds are being invested in working capital during a period of revenue growth. Accounts payable also increased substantially from the previous year to ¥431.1B, with the expansion of purchasing and outsourcing transactions supporting working capital on the liabilities side as well. Interest-bearing debt remained low, centered on long-term borrowings of ¥65.7B, and dependence on external financing was limited.

Quality of Earnings

Non-operating income amounted to ¥5.6B, including dividends received of ¥2.9B and other items, while non-operating expenses were ¥1.5B, including interest expenses of ¥1.1B, resulting in net non-operating income of ¥4.1B. Accordingly, the composition of earnings was primarily recurring and centered on Operating Income. Extraordinary income was ¥0.6B, including gains on sales of fixed assets of ¥0.5B, while extraordinary losses were ¥1.7B, including impairment losses of ¥1.6B, resulting in a net temporary loss factor of ¥1.1B. The impact of extraordinary gains and losses was minor relative to Operating Income of ¥185.3B, and the vast majority of current-period profit was recurring income generated by operating activities. However, the trend of increases in accounts receivable and work in process warrants attention from an accrual perspective, and whether revenue growth is accompanied by cash collection will require monitoring going forward.

Earnings Forecast and Guidance

The full-year Company forecast calls for revenue of ¥1,700.0B (+20.9% YoY), Operating Income of ¥180.0B (+17.7%), and Ordinary Income of ¥183.0B (+11.2%). As of the cumulative Q3 period, progress rates were 90.9% for revenue, 102.9% for Operating Income, 103.5% for Ordinary Income, and 105.0% for Net Income attributable to owners of the parent (cumulative Q3 EPS of ¥215.97 versus forecast EPS of ¥205.69). All substantially exceeded the standard progress benchmark of 75%. Operating Income, Ordinary Income, and Net Income have already exceeded the full-year plan; if the plan remains unchanged at this level, Q4 would mathematically represent a decline in profit. Whether the plan is revised, as well as the nature of sales and expense recognition in Q4, will be key points to monitor.

Shareholder Returns

The full-year Company forecast for annual dividends is ¥50 per share. As no dividend is planned for Q2, the dividend is expected to be concentrated in the year-end dividend. Based on forecast full-year EPS of ¥205.69, the forecast Payout Ratio is 24.3%, below the general benchmark for sustainability. Cumulative Q3 EPS has already reached ¥215.97, exceeding forecast full-year EPS, and the dividend burden appears light relative to earnings. Retained earnings were substantial at ¥478.5B, indicating a significant accumulation of funds available for dividends.

Risk Factors

1. Business concentration risk: The Amusement Equipment Business accounts for approximately 92% of external revenue and the majority of consolidated profit, creating a structure in which fluctuations in the number and timing of units sold in this business directly affect consolidated performance.

2. Declining profitability of the Content & Digital Business: Revenue in this business declined 16.9% YoY, segment profit declined 67.0%, and its margin fell from 22.3% to 8.8%. The profitability of individual projects and the recovery of IP investments are areas of focus.

3. Expansion of working capital: Accounts receivable and notes receivable stood at ¥367.4B, and inventories including work in process are expanding. The collection of receivables and monetization of production-related assets during a period of revenue growth represent financial points of attention.

Industry Benchmark (For Reference; Compiled by the Company)

Industry Benchmark (trading)

Profitability and Returns

Both the Operating Margin and Net Profit Margin are substantially above the industry median.

Growth and Capital Efficiency

The Revenue Growth Rate is substantially above the industry median, demonstrating exceptional growth within the industry.

※Source: Compiled by the Company

Key Takeaways from the Earnings Results

1. The most notable point in these earnings results is that Operating Income increased 97.3% YoY to ¥185.3B, the Operating Margin improved to 12.0%, and progress against the full-year plan had already reached 102.9%.

2. Dependence on the Amusement Equipment Business has increased further for both growth and profit, while the Content & Digital Business experienced declines in both revenue and profit, accompanied by a lower margin. The change in balance among the business segments represents a structural characteristic.

3. Although financial soundness is favorable, with a current ratio of 183.7% and interest-bearing debt of ¥74.7B, working capital including accounts receivable and work in process has expanded. The movement of funds tied up in working capital accompanying revenue growth will be an important area for future monitoring.

Theoretical Share Price (Reference Value)

Sensitivity: ¥1,419–¥1,505 at ±1% for the Cost of Equity, and ¥1,451–¥1,476 at ±0.1 for ω.

Notes:

• As progress of Net Income against the full-year forecast (105%) exceeds the standard benchmark (75%), forecast EPS has been adjusted upward within a maximum range of +10% (because companies with progress ahead of plan tend to exceed their forecasts. The adjustment may be excessive for businesses with strong seasonality).
• Net assets as of the quarter-end have been used (there is a timing gap relative to the full-year forecast).
• As net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual Income Model (Ohlson type; explicit 5-year fade) / Interest rate reference month: 2026-07 / Mechanically calculated value based solely on publicly disclosed data; this is not a forecast of the market share price, a recommendation of any specific investment action, or a prediction or guarantee of the future share price.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary 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, after consulting a professional as necessary.

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AI Financial Analysis

Executive Summary

FY2026 Q3 was a strong earnings period, with revenue growth translating into substantially faster operating and attributable-profit growth. Revenue rose 58.2% year on year to ¥154.62bn. Operating income increased 97.3% to ¥18.53bn, exceeding the full-year company forecast of ¥18.00bn by ¥0.53bn. Ordinary income grew 76.0% to ¥18.94bn. Profit attributable to owners of parent more than doubled, rising 109.2% to ¥13.44bn. The operating margin expanded by approximately 240bp to 12.0% from 9.6% a year earlier. The net margin improved by approximately 210bp to 8.7% from 6.6%, despite a 27.8% effective tax rate. Gross margin declined by approximately 210bp to 22.2%, indicating that the profit improvement was driven primarily by SG&A leverage and segment mix rather than purchasing-margin expansion. SG&A expenses grew only 9.3%, well below revenue growth, demonstrating strong operating leverage. The Amusement Equipment business was the core earnings engine, generating ¥20.15bn of segment profit, up 135.2% year on year. In contrast, Content & Digital revenue declined 16.9% and segment profit fell 67.0%, creating a clear divergence in the group’s earnings drivers. The balance sheet remains liquid, with a current ratio of 183.7% and cash of ¥36.51bn. Interest-bearing debt of ¥7.47bn is modest relative to equity and is more than covered by cash. However, trade receivables increased 186.8% year on year and DSO reached 65 days, requiring attention to collection quality as sales expand. Work in process represents 74.5% of manufacturing inventory, increasing exposure to production timing, demand forecasting and potential inventory valuation pressure. Q3 cumulative revenue reached 91.0% of the full-year forecast, while operating income reached 103.0%, implying that the current full-year plan has already been surpassed at the operating level. The FY2026 forecast therefore appears conservative relative to the cumulative result, although the sustainability of the pace depends heavily on Amusement Equipment deliveries and on stabilization in Content & Digital.

Profitability Analysis

The reported DuPont ROE is 26.7%, comprising an 8.7% net profit margin, 1.454x asset turnover and 2.11x financial leverage. The strongest contributor to profitability is the combination of a solid net margin and efficient sales generation from the asset base, while the 2.11x leverage factor also enhances equity returns. Operating margin expanded to 12.0% from approximately 9.6%, an improvement of about 240bp, and net margin rose to 8.7% from approximately 6.6%. Gross margin, however, contracted to 22.2% from approximately 24.3%, showing that revenue growth carried a lower gross-profit rate. SG&A grew 9.3% year on year, versus 58.2% revenue growth, producing substantial operating leverage and more than offsetting gross-margin dilution. The Amusement Equipment business generated a 14.1% segment margin, up from 10.2%, supported by revenue growth of 70.1% and segment-profit growth of 135.2%. Content & Digital’s segment margin contracted to 8.8% from 22.3%, as revenue declined 16.9% and segment profit decreased 67.0%. The sharp change in segment mix toward the higher-margin Amusement Equipment business was therefore central to consolidated operating-margin expansion. The tax burden was 0.714, consistent with the reported 27.8% effective tax rate and within a normal range. The interest burden was 1.016, reflecting net non-operating financial income rather than debt-servicing pressure; dividend income of ¥0.29bn and interest income of ¥0.03bn exceeded interest expense of ¥0.11bn. Extraordinary items were modest overall: ¥0.57bn of extraordinary income was more than offset by ¥1.74bn of extraordinary loss, including a ¥1.61bn impairment loss. The small net extraordinary loss of ¥0.12bn does not materially alter the underlying operating-profit picture. Annualized ROA calculated using annualized Q3 attributable profit and the average of current and prior-year total assets is approximately 14.9%, indicating strong capital productivity, although the reported DuPont ROE is the primary disclosed return measure.

Growth Assessment

Revenue growth of 58.2% was led by the Amusement Equipment business, where external sales rose ¥58.89bn to ¥142.84bn. This segment accounted for approximately 92.4% of consolidated revenue and approximately 95.6% of aggregate segment profit before corporate-cost allocation, making it the core business. Its profit growth outpaced sales growth materially, which supports the quality of the group-level operating-income increase. Content & Digital external sales declined ¥2.12bn to ¥10.43bn, while segment profit decreased ¥1.87bn to ¥0.92bn. The earnings profile has consequently become more concentrated in Amusement Equipment. Other businesses, including fitness operations, recorded external sales of ¥1.35bn, up 6.7%, and segment profit of ¥0.03bn, up from ¥0.01bn. Unallocated corporate costs increased to ¥2.44bn from ¥1.99bn, but this 22.5% increase remained below consolidated revenue growth. Against the FY2026 plan, cumulative Q3 revenue progress is 91.0%, above the standard 75% pace by 16.0 percentage points. Operating-income progress is 103.0%, 28.0 percentage points above the standard pace. Ordinary-income progress is 103.5%, 28.5 percentage points above the standard pace. Attributable-profit progress is 105.0%, 30.0 percentage points above the standard pace. The company’s full-year forecast implies a substantial deceleration or a low-profit Q4 because cumulative Q3 revenue is already close to the annual target while operating, ordinary and attributable profit already exceed their respective forecasts. The outlook should therefore be assessed through the timing and recurrence of Amusement Equipment sales, gross-margin normalization, and the ability of Content & Digital to restore profitability.

Financial Health

Liquidity is sound, with current assets of ¥112.11bn exceeding current liabilities of ¥61.02bn and producing a current ratio of 183.7%. The quick ratio of 181.5% confirms that the liquidity position is not dependent on inventory realization. Working capital was ¥51.09bn, and cash and deposits totaled ¥36.51bn. Interest-bearing debt was ¥7.47bn, consisting principally of ¥6.57bn of long-term loans and ¥0.91bn of short-term loans. Cash was 40.17x short-term debt, and only 12.2% of interest-bearing debt was short term, limiting maturity-mismatch risk. Debt/capital was a conservative 10.0%, while interest coverage was exceptionally strong at 171.58x. The reported D/E ratio of 1.11x reflects total liabilities relative to equity; interest-bearing debt alone equals only approximately 0.11x total equity. Total equity rose ¥10.87bn year on year to ¥67.12bn, supported by retained earnings, which increased ¥10.33bn to ¥47.85bn. Trade receivables increased ¥23.93bn, or 186.8%, to ¥36.74bn, broadly reflecting rapid revenue expansion but also increasing the capital tied up in customer collections. Trade payables increased ¥29.39bn, or 214.3%, to ¥43.11bn, providing meaningful supplier financing for the larger operating scale. The larger increase in payables than receivables supports near-term liquidity, but it also makes timely inventory conversion and customer collection important. Goodwill is only ¥0.90bn, equal to 1.3% of equity and 0.6% of total assets, so the balance sheet has limited dependence on acquired goodwill values. Intangible assets are also modest at 1.6% of total assets. Defined-benefit obligations of ¥2.38bn and asset-retirement obligations of ¥1.32bn are identifiable long-term obligations to monitor within non-current liabilities.

Notable B/S Changes

Accounts payable: +¥29.39bn (+214.3%) to ¥43.11bn — supplier financing expanded faster than sales and supports liquidity, but increases sensitivity to payment-term normalization. Accounts receivable: +¥23.93bn (+186.8%) to ¥36.74bn — consistent with rapid revenue expansion, but DSO of 65 days elevates collection and working-capital risk. Work in process: +¥3.42bn (+31.2%) to ¥14.71bn — the production pipeline expanded and represents 74.5% of manufacturing inventory, increasing delivery-timing and inventory-valuation exposure. Finished goods inventories: +¥0.68bn (+97.0%) to ¥1.37bn — inventory increased from a low base alongside higher operating scale. Retained earnings: +¥10.33bn (+27.5%) to ¥47.85bn — profit retention strengthened internal funding capacity and supports the equity base.

Cash Flow Quality

Dividend Sustainability

The FY2026 forecast calls for a ¥50.0 per-share annual dividend. Based on forecast EPS of ¥205.69, the implied dividend-only payout ratio is approximately 24.3%, which is conservative relative to the 60% sustainability benchmark. The forecast dividend would require approximately ¥3.11bn based on the reported average share count of 62.23 million shares. This amount is modest relative to Q3 attributable profit of ¥13.44bn and retained earnings of ¥47.85bn. The balance sheet also contains ¥36.51bn of cash against ¥7.47bn of interest-bearing debt, providing substantial financial capacity. No interim dividend was reported at Q2, indicating that shareholder distributions may be weighted toward the year-end payment. The low forecast payout leaves flexibility to fund working-capital requirements associated with higher Amusement Equipment sales and manufacturing activity. Dividend sustainability is supported by the forecast payout ratio and retained earnings, while the pace of receivable collection and the durability of current segment earnings remain important determinants of distributable cash generation.

Risk Assessment

Business risks include Amusement Equipment concentration is high: the segment represented approximately 92.4% of revenue and 95.6% of aggregate segment profit before corporate-cost allocation. A change in product cycle, machine demand, regulatory conditions or customer orders could have an outsized effect on consolidated earnings., Content & Digital weakened materially, with revenue down 16.9% year on year and segment profit down 67.0%. Its segment margin fell to 8.8% from 22.3%, indicating lower earnings diversification and possible volatility in content monetization or project timing., HIGH_WIP_RATIO alert: work in process is 74.5% of manufacturing inventory, above the 40% benchmark. This reflects a production-heavy inventory profile and raises risk around delivery timing, demand forecasting, production disruptions and valuation if expected sales do not materialize., Gross margin declined approximately 210bp to 22.2%. Continued mix changes, component costs, pricing pressure or product-level profitability changes could reduce the benefit currently being generated by SG&A leverage..

Financial risks include HIGH_RECEIVABLE_DAYS alert: DSO is 65 days, above the 60-day threshold. Receivables rose 186.8% to ¥36.74bn, increasing exposure to collection timing and customer credit quality as the business scales., Accounts payable rose 214.3% to ¥43.11bn. Although this supports working capital, a sustained dependence on supplier credit could increase liquidity sensitivity if payment terms normalize faster than receivables are collected., The capital adequacy ratio declined to 43.6% from 51.6% a year earlier as liabilities expanded faster than equity. Absolute leverage remains manageable, but the direction of change should be monitored., The ¥1.61bn impairment loss demonstrates that certain assets remain subject to impairment risk, though goodwill exposure itself is low at 1.3% of equity..

Key concerns include The primary risk to earnings sustainability is whether the exceptional Amusement Equipment revenue and profit level can recur after the current delivery cycle., Receivable growth and DSO should be assessed alongside future operating cash conversion, particularly because receivables constitute 25.9% of total assets., The divergence between robust Amusement Equipment performance and deteriorating Content & Digital profitability reduces the breadth of the earnings base., FY2026 cumulative operating income already exceeds full-year guidance, so subsequent disclosures should clarify whether the variance reflects conservative planning, favorable shipment timing, or a change in underlying demand..

Investment Implications

Key takeaways include Revenue increased 58.2% and operating income increased 97.3%, with operating margin expanding approximately 240bp to 12.0%., Amusement Equipment is the core earnings driver, with ¥142.84bn of revenue and ¥20.15bn of segment profit., Cumulative Q3 operating income of ¥18.53bn is already 103.0% of the ¥18.00bn full-year forecast., Balance-sheet liquidity is robust: current ratio is 183.7%, cash is ¥36.51bn and debt/capital is 10.0%., Receivables, payables and work in process expanded sharply, making working-capital execution a central monitoring item..

Metrics to watch include Amusement Equipment revenue, segment margin and order/delivery cadence, Content & Digital revenue recovery and segment-margin stabilization, DSO, trade receivables and customer collection performance, Work-in-process balance, inventory turnover and impairment charges, Gross margin versus SG&A growth, Any revision to FY2026 revenue, operating-income, ordinary-income and attributable-profit guidance, Year-end dividend confirmation versus the ¥50.0 per-share forecast.

Regarding relative positioning, The company combines high reported ROE of 26.7%, a good 12.0% operating margin, very strong interest coverage and low interest-bearing-debt intensity. Its relative financial strength is offset by a concentrated Amusement Equipment earnings base, a weaker Content & Digital contribution, and elevated receivable days and work-in-process exposure.