MEEQ Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥3.45B
• Operating Income: ¥664M
• Net Income: ¥432M
• EPS: ¥37.78

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

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

FY2026 Q2 was a strong profitability and cash generation quarter for ミーク株式会社, with solid operating margins and healthy cash conversion. Revenue was 34.54 (100M JPY), generating gross profit of 12.93 and operating income of 6.64, implying a robust operating margin of 19.2%. Net income reached 4.32, translating into a net margin of 12.5% and EPS (basic) of 37.78 JPY on 11.44 million average shares. Cash flow quality was sound with operating cash flow of 5.18 exceeding net income (OCF/NI = 1.20x), indicating earnings were backed by cash. Free cash flow, approximated as OCF less capex, was positive at about 3.69 (capex of 1.49), supporting balance sheet strength. The balance sheet is conservative: cash and deposits of 42.20 cover 2.6x current liabilities of 16.49, and total equity is a high 55.80, yielding low financial leverage (assets/equity 1.31x). Reported DuPont ROE is 7.7%, driven primarily by solid net margins and moderate asset turnover (0.473x), with low leverage contribution. Gross margin stood at 37.4% and EBITDA margin at 22.2%, consistent with efficient cost control and limited reliance on non-operating items (non-operating income 0.03). The effective tax rate was 35.3%, dampening net profitability versus operating performance. Working capital appears well managed with accounts receivable of 11.82 (AR days roughly ~62 on a half-year base) and no notable strain visible; inventory data was not disclosed. Liquidity is ample: current ratio 372% and quick ratio 372%, aided by large cash holdings. Debt metrics are benign; interest expense was unreported and interest coverage reported at 3,495x, consistent with minimal debt service burden. Margin trend analysis is constrained by a lack of YoY or sequential disclosures, so basis-point expansion/compression cannot be quantified this quarter. Earnings quality screens favorable given positive OCF conversion and limited non-operating contribution; no signs of working capital-driven earnings were observed. Forward-looking, the company has flexibility to fund capex and potentially shareholder returns from internal cash generation, but the absence of dividend disclosure limits payout visibility. Key monitoring items are revenue growth durability, sustainability of the ~19% operating margin, and the trajectory of the effective tax rate.

Profitability Analysis

ROE decomposition: ROE = Net Profit Margin × Asset Turnover × Financial Leverage = 12.5% × 0.473 × 1.31 ≈ 7.7%. The dominant driver of current-period ROE is profitability (12.5% net margin), with moderate asset turnover and low leverage. Net margin quality appears high given low non-operating income (0.03) and negligible interest expense, indicating operating earnings are the core contributor. Without prior-period data, the change attribution among components cannot be quantified; however, current leverage is conservative, suggesting limited ROE boost from gearing. Operating margin of 19.2% reflects SG&A at 18.2% of revenue (6.28/34.54), implying decent operating leverage at the present scale. The business context—cash-heavy balance sheet and low financing costs—supports margin sustainability near term, but tax rate at 35.3% caps net margin upside. No evidence of SG&A growth outpacing revenue can be assessed due to missing YoY figures. Overall, profitability looks recurring rather than one-time, given minimal non-operating items and depreciation of 1.04 underpinning EBITDA.

Growth Assessment

Revenue of 34.54 (100M JPY) lacks YoY comparatives, so top-line growth cannot be assessed. Profitability is strong, with gross margin at 37.4% and operating margin at 19.2%, suggesting disciplined cost control. Ordinary income (6.67) and non-operating income (0.03) indicate limited reliance on financial income, reinforcing quality of earnings. The effective tax rate of 35.3% is a headwind to bottom-line scalability unless structural tax planning improves. OCF of 5.18 exceeding NI suggests that current earnings are supported by cash inflows rather than working capital release alone; AR days of roughly ~62 appear reasonable for a half-year revenue base. Capex of 1.49 implies manageable reinvestment needs; reported ROIC of 31.6% signals attractive returns on invested capital in the period. Outlook hinges on sustaining high margins and converting pipeline into revenue; with cash at 42.20, the firm has latitude to invest for growth. Absence of segment, backlog, or order trends limits visibility on revenue sustainability.

Financial Health

Liquidity is very strong: current ratio 372.1% and quick ratio 372.1%; cash/current liabilities is ~2.6x (42.20/16.49). No explicit short- or long-term borrowings were disclosed; D/E is reported at 0.31x, consistent with low leverage and high equity (55.80). Interest coverage is effectively unconstrained at 3,495x (reflecting minimal interest expense). Maturity mismatch risk appears low: cash (42.20) and receivables (11.82) comfortably exceed current liabilities (16.49). Noncurrent liabilities are modest at 0.66. Intangible assets (6.48) represent about 8.9% of total assets—manageable from a solvency standpoint. No off-balance sheet obligations were disclosed in the provided data. There are no warnings on Current Ratio (<1.0) or D/E (>2.0).

Cash Flow Quality

OCF/Net Income is 1.20x, above the 1.0x benchmark, indicating good earnings quality. Free cash flow is estimated at 3.69 (OCF 5.18 minus capex 1.49), sufficient to fund organic needs and leaving optionality for shareholder returns; investing CF and dividends were not disclosed, so full coverage cannot be confirmed. Working capital dynamics appear benign: receivables are reasonable (~62 days on a half-year base), inventory was not reported, and payables are 4.62, limiting visibility into the full cash conversion cycle. No clear signs of working capital manipulation are evident from the limited data. Non-operating items had minimal impact on cash generation this quarter.

Dividend Sustainability

Dividend data (DPS, total dividends, payout) were not disclosed, preventing a direct payout ratio assessment. From a capacity standpoint, positive FCF of ~3.69 and substantial cash (42.20) suggest room to fund dividends if policy supports it. With ROE at 7.7% and low leverage, a balanced approach between growth reinvestment and returns is plausible. However, without dividend history or guidance, sustainability cannot be concluded. Investors should monitor future disclosures on DPS, payout policy, and any buyback activity.

Risk Assessment

Business Risks:

• Revenue trajectory uncertainty due to lack of disclosed YoY or segment trends
• Potential margin pressure from SG&A and cost inflation given 18.2% SG&A-to-sales
• High effective tax rate (35.3%) limiting net margin leverage
• Customer concentration risk cannot be ruled out (data not disclosed)

Financial Risks:

• Limited visibility on interest-bearing debt due to unreported loan details
• Intangible asset impairment risk (intangibles 6.48, ~8.9% of assets)
• Currency exposure risk if sales or costs are FX-sensitive (not disclosed)

Key Concerns:

• Data gaps (no YoY figures, no dividend data, no inventory details) constrain trend analysis
• Sustainability of 31.6% ROIC not verifiable without invested capital breakdown
• Tax rate management as a recurring drag on bottom-line

Investment Implications

Key Takeaways:

• Strong operating profitability (OPM ~19.2%, EBITDA margin 22.2%) with minimal non-operating reliance
• Healthy cash conversion (OCF/NI 1.20x) and positive FCF (~3.69)
• Conservative balance sheet with ample liquidity (cash 42.20; current ratio 372%)
• ROE at 7.7% primarily margin-driven; leverage contribution is modest
• Visibility limited by lack of YoY and dividend disclosures

Metrics to Watch:

• YoY revenue and operating margin trends (bps change)
• OCF/NI and working capital metrics (AR, inventory once disclosed)
• Capex trajectory and ROIC by project or segment
• Effective tax rate and any policy changes
• Capital allocation updates (dividends, buybacks, M&A)

Relative Positioning: Based on available data, the company exhibits above-average profitability and cash generation with a conservative capital structure. However, relative standing versus peers cannot be firmly established without YoY trends, segment data, and disclosure on dividends and borrowings.

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