AMBITION DX HOLDINGS Co.,Ltd. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥10.94B
• Operating Income: ¥460M
• Net Income: ¥948M
• EPS: ¥29.67

Income Statement

Balance Sheet

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

Ambition DX Holdings reported FY2026 Q1 consolidated results under JGAAP showing a sharp slowdown across top- and bottom-line metrics, with revenue at ¥10,941 million (-27.2% YoY), operating income at ¥460 million (-71.1% YoY), and net income at ¥211 million (-77.7% YoY). Profit contraction outpaced the decline in sales, indicating negative operating leverage and likely pressure from fixed costs and/or a weaker mix. Gross profit is disclosed at ¥3,172.6 million, implying a gross margin of roughly 29.0%, which remains respectable but was insufficient to prevent a steep drop in operating profit. The DuPont framework points to a modest quarterly ROE of 2.70%, driven by a slim net margin (1.93%), low asset turnover (0.263x), and high financial leverage (5.32x). Interest expense of ¥62.3 million was covered 7.4x by operating income, indicating near-term debt service capacity remains adequate despite earnings pressure. Liquidity appears solid with a current ratio of 181.6% and working capital of approximately ¥13.59 billion, suggesting flexibility to manage short-term obligations. The balance sheet shows total assets of ¥41.58 billion and total equity of ¥7.82 billion; by calculation this implies an equity ratio around 18.8% despite a reported equity ratio of 0.0% (likely an undisclosed figure rather than an actual value). The debt-to-equity ratio of 3.96x highlights a relatively leveraged capital structure, which increases sensitivity to earnings volatility and interest rates. Cash flow statements were not disclosed in the provided XBRL items (all zeros), limiting assessment of operating cash conversion and free cash flow. Dividend per share is undisclosed/zero for the period, consistent with a payout ratio of 0.0%, and FCF coverage cannot be assessed without cash flow data. EPS was ¥29.67 for the quarter, though the share count and book value per share were not reported in the extract, which constrains per-share trend analysis. The company’s revenue decline suggests cyclical or timing effects in its core operations, and the magnitude of the operating income contraction implies either reduced gross profit leverage or higher SG&A intensity. The ordinary income of ¥332 million, below operating income, indicates non-operating headwinds (e.g., interest and other items). The disclosed income tax figure appears inconsistent with the earnings bridge; we rely on the reported net income as the anchor. Overall, the quarter reflects compressed profitability against a still-leveraged balance sheet but with adequate liquidity and interest coverage. Near-term focus should remain on revenue stabilization, margin defense, and visibility on operating cash flow. Data gaps (notably cash flow and certain equity/share metrics) warrant caution in interpreting cash conversion and dividend capacity.

Profitability Analysis

ROE_decomposition: DuPont indicates: Net Profit Margin 1.93% x Asset Turnover 0.263 x Financial Leverage 5.32 = ROE 2.70%. The low margin and low turnover were partially offset by high leverage, keeping ROE positive but modest. margin_quality: Gross margin stands at 29.0% (gross profit ¥3,172.6m on revenue ¥10,941m). Operating margin is approximately 4.2% (¥460m/¥10,941m), a sharp YoY contraction consistent with the -71.1% decline in operating income versus -27.2% in revenue. Net margin at 1.93% reflects additional pressure from non-operating items (interest and others). operating_leverage: The disproportionate decline in operating income relative to revenue (-71.1% vs. -27.2%) signals negative operating leverage; fixed cost absorption weakened as volumes fell or mix deteriorated. SG&A intensity likely rose against a smaller revenue base.

Growth Assessment

revenue_sustainability: Revenue declined 27.2% YoY to ¥10.94bn, pointing to a weaker demand environment or timing effects in core businesses. Sustainability hinges on recovering transaction volumes and stabilization in key revenue drivers. profit_quality: Operating income of ¥460m and ordinary income of ¥332m indicate non-operating drag (notably interest), while the net margin of 1.93% is thin. Without OCF data, earnings cash conversion cannot be verified. outlook: Key determinants include volume/mix normalization, cost discipline to restore operating leverage, and moderation of non-operating headwinds. A return to mid-to-high single-digit operating margins would require either revenue recovery or structural cost actions.

Financial Health

liquidity: Current assets ¥30.26bn vs. current liabilities ¥16.66bn implies a current ratio of 181.6% and working capital of ¥13.59bn, indicating solid near-term liquidity. Quick ratio is reported at 181.6%, with inventories not disclosed. solvency: Total assets ¥41.58bn, total equity ¥7.82bn. Calculated equity ratio is approximately 18.8% (despite a reported 0.0% disclosure), indicating a leveraged but not overly thin equity base. capital_structure: Debt-to-equity ratio of 3.96x underscores high leverage. Interest coverage at 7.4x (operating income/interest expense) is adequate currently but could tighten if earnings remain depressed or rates rise.

Cash Flow Quality

earnings_quality: OCF was not disclosed (0 indicates unreported), preventing assessment of cash conversion from earnings. The gap between operating income (¥460m) and net income (¥211m) reflects non-operating charges and tax effects, but the cash impact is unclear. FCF_analysis: Free cash flow cannot be computed due to missing operating and investing cash flows. Capex and working capital movements are not available. working_capital: Working capital is sizable at ¥13.59bn, supporting operations; however, without cash flow details, the direction and efficiency of working capital deployment cannot be evaluated.

Dividend Sustainability

payout_ratio_assessment: DPS is undisclosed/zero and payout ratio is 0.0%. With limited visibility on OCF/FCF, assessing sustainable payout capacity is not possible solely from earnings. FCF_coverage: FCF coverage cannot be evaluated as FCF is undisclosed. Earnings alone (¥211m net income) would support only a modest payout if cash conversion were healthy. policy_outlook: Given earnings volatility and leverage, management may prioritize reinvestment and balance sheet resilience over distributions until profit stability and cash flow visibility improve. Confirmation requires company guidance.

Risk Assessment

Business Risks:

• Revenue volatility and timing risk in core operations leading to negative operating leverage
• Margin pressure from fixed cost base and potential mix deterioration
• Competitive intensity affecting pricing and occupancy/throughput (industry-specific dynamics)
• Execution risk on cost controls and productivity initiatives

Financial Risks:

• High leverage (D/E 3.96x) increasing sensitivity to earnings shocks
• Interest rate risk affecting financing costs despite current 7.4x coverage
• Cash flow visibility risk due to undisclosed OCF/FCF in the period
• Potential covenant headroom pressures if profitability weakens further

Key Concerns:

• Steep YoY declines in operating and net income (-71.1% and -77.7%, respectively)
• Thin net margin (1.93%) with non-operating drag
• Low asset turnover (0.263x) indicating subdued utilization
• Data limitations on cash flows and certain balance sheet details (inventories, share metrics)

Investment Implications

Key Takeaways:

• Revenue contraction of 27.2% drove disproportionately large profit declines, evidencing negative operating leverage
• Gross margin remains near 29%, but SG&A and non-operating items compressed overall margins
• Liquidity is solid (current ratio 181.6%), but leverage is high (D/E 3.96x)
• Interest coverage at 7.4x is adequate for now, but sustained earnings weakness would erode cushion
• Cash flow data gaps limit assessment of earnings quality and dividend capacity

Metrics to Watch:

• Top-line trajectory and order/booking indicators
• Operating margin and SG&A-to-sales ratio
• Interest expense trends and coverage ratio
• Operating cash flow and free cash flow once disclosed
• Asset turnover and working capital efficiency
• Equity ratio and net debt metrics

Relative Positioning: Within Japan mid-cap, operations appear more cyclical and leverage is above average, with liquidity supportive but profitability under pressure; improved cost discipline and clearer cash flow disclosure would be needed to strengthen the quality profile.

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