Globe-ing Inc. FY2026 FY Earnings Report

Quick View

Executive Summary

The company delivered a highly profitable earnings performance, with revenue and earnings growth driven by the expansion of the Consulting Business and the AI Business turning profitable, while profit growth outpaced revenue growth. Revenue was ¥11.51B (+39.4% YoY), Operating Income was ¥4.00B (+53.6%), and Net Income attributable to owners of the parent was ¥2.88B (+81.7%). The Operating Margin improved to 34.8% from 31.6% in the previous year, reflecting operating leverage as SG&A expense growth was limited to 28.2%, compared with revenue growth of 39.4%.

Factors Affecting Business Performance

【Revenue】Revenue was ¥11.51B, up +39.4% YoY. The core A0Consulting business generated ¥11.11B (+35.2%), accounting for 96.5% of consolidated revenue. Although A0Ai remained small in scale at ¥0.41B, it expanded rapidly by +856.8% YoY, supported by the deployment of AI agents leveraging know-how developed through the consulting business. Revenue from Toyota Motor Corporation was ¥2.31B, accounting for approximately 20.1% of consolidated revenue, indicating a high degree of customer concentration.

【Profit and Loss】Operating Income was ¥4.00B (+53.6%), and the Operating Margin improved by +320bp to 34.8% from 31.6% in the previous year. Although the gross margin declined slightly to 66.6%, the decrease in other operating expenses (¥0.13B → ¥0.02B) and controlled SG&A expense growth contributed to the improvement. Net Income increased by +81.7% to ¥2.88B, outpacing Operating Income growth, partly due to a lower tax burden ratio. Revenue and earnings increased.

Segment Analysis

A0Consulting generated revenue of ¥11.11B (96.5% of total, YoY +35.2%), Operating Income of ¥4.94B, and a profit margin of 44.5%, making it the core of consolidated earnings. A0Ai generated revenue of ¥0.41B (3.5% of total, YoY +856.8%) and Operating Income of ¥0.23B, turning profitable from an Operating Loss in the previous year. Its profit margin of 57.6% exceeded that of the Consulting Business. However, the AI Business remains small in scale, and further expansion of external revenue is required before it can make a substantially larger contribution to consolidated performance.

Key Financial Indicators

【Profitability】The Operating Margin of 34.8% (31.6% in the previous year) and Net Profit Margin of 25.0% (19.4% in the previous year) both improved, while ROE remained high at 43.2% (43.9% in the previous year). 【Cash Flow Quality】Operating Cash Flow (OCF) was ¥3.33B, approximately 1.16 times Net Income of ¥2.88B, confirming cash-generation capacity in excess of accounting earnings. Capital expenditures of ¥0.22B were below depreciation and amortization of ¥0.41B, reflecting an asset-light business structure. 【Investment Efficiency】Although total assets expanded to ¥12.02B, revenue growth outpaced this increase, indicating an improving trend in asset efficiency. 【Financial Soundness】The Equity Ratio was 63.5%, while the Current Ratio was approximately 286%, based on current assets of ¥9.13B versus current liabilities of ¥3.19B, indicating strong short-term solvency.

Cash Flow Analysis

Operating Cash Flow was ¥3.33B, up only +2.4% YoY, mainly because income taxes paid increased substantially from ¥0.10B to ¥1.55B. On a profit-before-tax or subtotal basis (¥4.87B), cash-generation capacity expanded. Contract assets increased by ¥0.43B, putting pressure on working capital, while an increase in accounts payable of ¥0.31B and a decrease in accounts receivable of ¥0.22B partially offset this impact. Investing Cash Flow represented an outflow of ¥2.55B, primarily due to ¥2.00B in time-deposit placements, indicating that the funds were more oriented toward managing surplus cash than toward business investment. Financing Cash Flow represented an outflow of ¥1.71B, mainly consisting of ¥0.90B in share repurchases and ¥0.41B in additional acquisitions of subsidiary shares. Free Cash Flow was ¥0.78B, and cash and cash equivalents at the end of the period remained ample at ¥5.69B.

Earnings Quality

Current-period earnings benefited not only from recurring business improvements but also from the reversal of temporary factors, including impairment losses of ¥0.105B recorded in the previous year falling to zero in the current period and other operating expenses declining from ¥0.127B to ¥0.019B. With OCF at 1.16 times Net Income, the accrual ratio was negative, indicating sound cash generation supporting earnings. However, contract assets—representing the balance of services performed but not yet billed—increased by ¥0.43B to ¥1.099B. Attention is warranted because the progress of billing and collection related to revenue recognition will affect working capital and earnings quality going forward. Comprehensive Income was ¥2.90B, nearly equal to Net Income of ¥2.88B, indicating limited divergence arising from other comprehensive income items such as foreign currency translation adjustments.

Earnings Forecast and Guidance

The company’s forecast for the next fiscal year (fiscal year ending May 2027) is revenue of ¥16.10B (+39.9% YoY), Operating Income of ¥4.83B (+20.6%), and Net Income of ¥3.38B (+17.6%). The forecast Operating Margin is 30.0%, approximately 480bp below the current-period actual result of 34.8%. The plan incorporates a decline in margins resulting from upfront investments, including personnel recruitment and sales expansion expenses for the AI Business, while continuing to pursue revenue growth. Forecast EPS is ¥118.55, and the forecast dividend is ¥35.60.

Shareholder Returns

The annual dividend for the current period was ¥16.10 per share (interim dividend of ¥0 and year-end dividend only), resulting in a low Payout Ratio of 15.9% relative to current-period Net Income. The company conducted ¥0.90B in share repurchases. Combined with dividends of ¥0.46B, total shareholder returns were approximately ¥1.36B, resulting in a Total Return Ratio of approximately 47.3%. Although total shareholder returns exceeded Free Cash Flow of ¥0.78B, the company held ¥5.69B in cash and cash equivalents, providing financial flexibility. The forecast dividend for the next fiscal year is ¥35.60, implying a forecast Payout Ratio of approximately 30.0% against forecast EPS of ¥118.55.

Risk Factors

1. Customer concentration risk: Revenue from Toyota Motor Corporation was ¥2.31B, accounting for approximately 20.1% of consolidated revenue. If a major customer changes its ordering policy or increases in-house production, the utilization rate and profitability of the core Consulting Business could be affected.

2. Contract asset growth and collection risk: Contract assets amounted to ¥1.099B, an increase of ¥0.43B from the previous year. This represents the accumulation of unbilled balances as projects progress, and delays in billing or collection could place pressure on OCF and working capital.

3. Business segment concentration risk: A0Consulting accounts for 96.5% of consolidated revenue, while the AI Business, despite becoming profitable, accounts for only 3.5%. Business diversification remains limited relative to the high level of profitability, and the company has a high degree of dependence on personnel supply capacity in the core business and customer budgets.

Industry Benchmark (For Reference; Company Analysis)

Industry Benchmark (it_telecom)

Profitability and Returns

Return on Equity, Operating Margin, and Net Profit Margin all significantly exceeded the industry median, placing the company among the high-profitability group within the industry.

Growth and Capital Efficiency

The revenue growth rate also significantly exceeded the industry median, placing the company among the group combining profitability and growth.

※Source: Company analysis

Key Earnings Highlights

1. Revenue increased by +39.4%, Operating Income by +53.6%, and Net Income by +81.7%, achieving profit growth above revenue growth. The impact of operating leverage enhanced the quality of the earnings performance.

2. The AI Business (A0Ai) turned profitable from an Operating Loss in the previous period and demonstrated profitability exceeding that of the core Consulting Business, with a profit margin of 57.6% versus 44.5%. However, its share of consolidated revenue remained limited at 3.5%, making future scale expansion the key to increasing its contribution to consolidated performance.

3. The company’s forecast for the next fiscal year calls for the Operating Margin to decline from 34.8% to 30.0%. Together with the trend of increasing contract assets, the evolution of profitability and working capital during the growth investment phase will be key monitoring points.

Theoretical Share Price (Reference Value)

Sensitivity: ¥623–¥663 at Cost of Equity ±1%; ¥631–¥661 at ω ±0.1.

(Calculation model: Residual Income Model (Ohlson-type, explicit 5-year fade) / Interest rate reference month: 2026-07 / Mechanically calculated values based solely on publicly disclosed data; these are not forecasts of the market share price or recommendations of any specific investment action, and do not predict or guarantee future share prices.)

---

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, after consulting with professionals as necessary.

---End of Report---