Reskill Corp. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥1.76B
• Operating Income: ¥730M
• Net Income: ¥482M
• EPS: ¥233.27

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: Solid Q2 with robust top-line growth and double-digit earnings, underpinned by strong margins and healthy cash conversion. Revenue rose 23.9% YoY to 17.64, while operating income increased 20.6% YoY to 7.30 and net income grew 22.2% YoY to 4.82. Gross margin stood at 48.1%, operating margin at 41.4%, and net margin at 27.3%, indicating a highly profitable model for a company of this scale. Operating margin compressed by roughly 110 bps YoY (from ~42.5% to 41.4%) as operating income grew slightly slower than revenue. Net margin compressed modestly by about 40 bps YoY (from ~27.7% to 27.3%). SG&A intensity was 13.8% of revenue, implying disciplined cost control given the still-elevated operating margin. Earnings quality is solid: operating cash flow of 4.97 slightly exceeded net income (OCF/NI 1.03x), suggesting underlying cash earnings are aligned with accounting profit. The balance sheet is very liquid with 14.62 in cash, current assets of 15.84, and current liabilities of 3.49, driving a current ratio of 453% and ample working capital of 12.34. Leverage is conservative with total liabilities/equity of 0.19x and no interest-bearing debt reported, reducing financial risk. ROE is strong at 26.1%, driven primarily by high net margins and decent asset turnover (0.761) rather than leverage (1.25x). Tax burden remains a headwind with an effective tax rate of 34.6%, which modestly caps net margin expansion. Ordinary income of 7.31 (+21.2% YoY) closely tracks operating income, indicating minimal reliance on non-operating items. Cash discipline is evident with limited depreciation (0.01) and no large capex disclosed, supporting a light-asset profile. Shareholder returns appear focused on buybacks with financing CF of -0.60 attributed to repurchases; dividends were not disclosed. Forward-looking, the combination of cash-rich balance sheet, high ROE, and robust margins provides capacity for continued investments and shareholder returns. Key watchpoints are sustaining growth without further margin compression and maintaining cash conversion as the business scales.

Profitability Analysis

ROE = Net Profit Margin × Asset Turnover × Financial Leverage = 27.3% × 0.761 × 1.25 ≈ 26.1%. The primary driver of high ROE is the exceptional net margin, with a supportive (but not aggressive) asset turnover and modest leverage. The component showing the most notable YoY change appears to be margin (operating and net margins both compressed slightly: ~110 bps and ~40 bps respectively), implying operating leverage benefited earnings but was partially offset by higher costs or mix effects. Business rationale likely includes investment in growth (higher variable costs or sales mix shifting) while retaining strong pricing power. Given still-low SG&A ratio (13.8%) and robust gross margin (48.1%), the slight margin compression seems manageable and potentially temporary as scale improves. Sustainability: high margins are supported by a light-asset model (very low D&A) and strong cash conversion; absent adverse mix or pricing pressure, margins should remain elevated though further expansion may be limited from current levels. No red flags on operating leverage, but note revenue growth (+23.9%) outpaced SG&A disclosure (not broken out), so we cannot confirm whether SG&A grew faster than revenue; the current SG&A ratio suggests cost discipline is intact.

Growth Assessment

Revenue growth of +23.9% YoY is robust and likely organic, given no goodwill or investment securities reported. Profit growth remains strong: operating income +20.6% and net income +22.2% YoY, though slightly lagging revenue at the operating level. Growth quality is high with OCF tracking NI (1.03x), indicating revenue is being monetized rather than booked through accruals. Asset turnover at 0.761 reflects efficient use of a cash-heavy balance sheet; low receivables (0.96) imply quick collection. Outlook: maintaining >20% growth may hinge on continued customer acquisition and retention; the key is avoiding further margin compression as the company scales. Mix/pricing dynamics will determine whether gross margin (~48%) can be sustained. With strong liquidity and minimal capex needs evident from low D&A, the company has capacity to invest in sales and product while supporting shareholder returns.

Financial Health

Liquidity is very strong: current ratio 453% and quick ratio 453%, with cash of 14.62 exceeding current liabilities of 3.49. There is no warning trigger (Current Ratio well above 1.0; D/E far below 2.0). Solvency risk is low as total liabilities/equity is 0.19x and no interest-bearing debt is reported. Maturity mismatch risk is minimal: current assets (15.84) comfortably cover current liabilities (3.49). Off-balance sheet obligations are not disclosed; we have no data on leases or guarantees. Equity base is solid at 18.49 with retained earnings of 9.07 supporting future distributions and investment.

Cash Flow Quality

OCF/Net Income = 1.03x (>0.8), indicating acceptable to good earnings quality. Free cash flow cannot be calculated due to unreported investing cash flows and capex; however, D&A is minimal (0.01), suggesting capital-light operations and likely modest capex, implying FCF should be positive if OCF persists. No signs of working capital manipulation are evident: receivables are low relative to revenue (implying short AR days), and the cash balance is high. Financing CF of -0.60 from share repurchases indicates discretionary use of cash rather than liquidity needs.

Dividend Sustainability

Dividend data were not disclosed, so payout ratio and FCF coverage cannot be calculated. Capacity perspective: with OCF of 4.97, strong net margins, and a substantial net cash position, the company has room to sustain dividends if initiated or increased. Current shareholder return appears via buybacks (-0.60), which are comfortably covered by OCF. Policy outlook is unclear under JGAAP single-entity reporting; absent explicit guidance, cash generation supports potential distributions while maintaining growth investments.

Risk Assessment

Business Risks:

• Margin compression risk as growth investments and mix shifts weigh on operating margin (current 41.4%, down ~110 bps YoY).
• Customer concentration or demand volatility risk given a small revenue base (17.64) where loss of key accounts would materially impact results.
• Pricing power sustainability risk affecting the high gross margin (48.1%).
• Execution risk in scaling while preserving cost discipline (SG&A ratio 13.8%).
• Potential regulatory or subsidy-related changes that could affect training/education-related demand if applicable to the business model.

Financial Risks:

• Tax rate risk with a relatively high effective tax rate (34.6%) that could fluctuate and impact net margin.
• Limited disclosure on leases or off-balance obligations; potential hidden commitments not visible in current data.
• Interest rate/cash yield risk on a large cash balance (14.62) impacting financial income though non-operating income is currently negligible.

Key Concerns:

• Slight YoY margin compression at both operating and net levels.
• Lack of disclosure on capex and investing cash flows limits FCF visibility.
• Absence of dividend policy details; shareholder return currently centered on buybacks.

Investment Implications

Key Takeaways:

• Strong growth and profitability: revenue +23.9% YoY, operating margin 41.4%, ROE 26.1%.
• Healthy earnings quality with OCF/NI at 1.03x and cash-rich balance sheet.
• Minor margin compression warrants monitoring but profitability remains high.
• Low leverage and ample liquidity reduce downside financial risk.
• Buybacks underway (-0.60 financing CF) with room for continued shareholder returns.

Metrics to Watch:

• Operating margin trajectory (bps change QoQ/YoY).
• OCF/NI ratio and working capital movements (AR and AP days).
• Gross margin stability and revenue mix.
• Effective tax rate volatility.
• Any disclosure on capex and investing CF to firm up FCF.
• Shareholder return policy (dividends vs buybacks).

Relative Positioning: Within small-cap, capital-light service/education-style peers, the company presents above-average margins, superior liquidity, and high ROE with low financial risk; sustainability hinges on maintaining growth without further margin erosion.

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