AZOOM (3496) FY2026 Q3 Earnings Report

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Executive Summary

Azoom continued to achieve revenue and profit growth, driven primarily by the expansion of its Idle Asset Utilization Business, while maintaining the quality of profit conversion from revenue growth. Revenue was ¥122.7B (¥97.1B in the prior year, +26.4%), Operating Income was ¥21.5B (¥17.0B in the prior year, +26.6%), Ordinary Income was ¥21.4B (¥16.9B in the prior year, +26.7%), and Net Income was ¥15.3B (¥12.0B in the prior year, +27.2%). Revenue growth and growth in each profit category were broadly aligned, with growth in the core business and the new business’s transition to profitability driving performance.

Factors Affecting Performance

【Revenue】Revenue was ¥122.7B, up +26.4% year on year. The Idle Asset Utilization Business accounted for the majority at ¥120.6B (98.3% of total, YoY+26.4%), while the Visualization Business generated ¥2.1B (1.7% of total, YoY+26.1%). Although small in scale, both businesses achieved double-digit growth.

【Profit and Loss】Operating Income was ¥21.5B (YoY+26.6%), and the operating margin was 17.5%, essentially unchanged from 17.5% in the prior year. The gross margin declined slightly to 41.1% from 41.4% in the prior year, but the SG&A ratio improved to 23.6% from 23.9%, absorbing the decline in the profit margin. Ordinary Income was ¥21.4B (YoY+26.7%), with the impact of non-operating income and expenses limited. Extraordinary Losses of ¥0.2B (loss on disposal of fixed assets) were minor at 0.8% of Profit Before Tax. Net Income was ¥15.3B (YoY+27.2%), and even after recording ¥5.9B in income taxes and other taxes, the profit growth rate remained at a level comparable to that at the operating stage, indicating a structure of revenue and profit growth.

Segment Analysis

The Idle Asset Utilization Business posted Revenue of ¥120.6B (YoY+26.4%) and segment profit of ¥21.3B (YoY+24.4%). Its profit margin was 17.7%, a slight decline from 17.9% in the prior year, but remained at a high level and accounted for the majority of consolidated profit. The Visualization Business generated Revenue of ¥2.1B (YoY+26.1%) and segment profit of ¥0.2B, turning profitable from a loss of ¥0.1B in the same period of the prior year. Although its profit margin of 11.9% remains below that of the core business, an additional contribution to consolidated profit was confirmed.

Key Financial Indicators

【Profitability】The operating margin was 17.5% (17.5% in the prior year), while the Net Income margin was 12.5%, both maintaining high levels broadly in line with the prior year.【Cash Quality】Accounts receivable were ¥2.1B, representing only 2.5% of total assets, and decreased from ¥2.2B in the prior year, indicating no expansion of trade receivables despite revenue growth.【Investment Efficiency】Annualized ROE was 32.3%, supported by the combination of high total asset turnover and a high profit margin.【Financial Soundness】The Equity Ratio was 74.0%, the current ratio was approximately 379% (current assets of ¥64.9B / current liabilities of ¥17.1B), and interest-bearing debt consisted only of ¥0.4B in long-term borrowings. The Debt/Capital ratio was 0.6%, indicating an extremely conservative capital structure.

Cash Flow Analysis

As disclosed figures from the statement of cash flows were not provided, funding trends are analyzed based on movements in the balance sheet. Cash and deposits were ¥46.7B, representing 54.7% of total assets, but decreased by ¥10.7B from ¥57.4B in the prior year. Meanwhile, property, plant and equipment increased by +¥1.2B year on year, and intangible fixed assets increased by +¥1.8B (including ¥4.6B in software under construction). The decline in cash is therefore believed to be partly attributable to the allocation of funds toward growth investment. Retained earnings were ¥41.8B, a decrease of ¥5.5B year on year, suggesting that cash outflows from dividends and investments exceeded the accumulation of Net Income. Balances of accounts receivable, real estate held for sale, and work in process were broadly flat to lower than in the prior year, with no apparent pressure on funding through deterioration in working capital.

Quality of Earnings

The difference between Ordinary Income of ¥21.4B and Operating Income of ¥21.5B was only ¥0.1B, indicating low reliance on non-operating income and expenses and high earnings quality. Non-operating income was ¥0.1B, less than 0.1% of Revenue, while non-operating expenses, including foreign exchange losses, were also minor at ¥0.1B. The ¥0.25B difference between Profit Before Tax of ¥21.3B and Operating Income was primarily attributable to the ¥0.2B loss on disposal of fixed assets and can be distinguished from the underlying strength of the core business as a temporary factor. The divergence between Ordinary Income and Net Income was attributable to ¥5.9B in income taxes and other taxes (an effective tax rate of approximately 28%), which is within a normal range. Comprehensive Income was ¥15.4B, broadly in line with Net Income of ¥15.3B. Other comprehensive income items, such as foreign currency translation adjustments, were small at ¥0.1B, indicating limited accrual-related divergence from Net Income.

Earnings Forecast and Guidance

The full-year company plan calls for Revenue of ¥170.0B (YoY+26.1%), Operating Income of ¥31.5B (YoY+20.5%), and Ordinary Income of ¥31.4B (YoY+20.4%). The progress rates for cumulative Q3 were 72.1% for Revenue, 68.3% for Operating Income, and 68.3% for Ordinary Income. Although all were below the standard progress rate of 75%, no revisions were made to the full-year plan or dividend forecast. In Q4, continued growth in the core business and the establishment of profitability in the Visualization Business will be the key factors in achieving the full-year plan.

Shareholder Returns

The Q2 dividend was ¥63.00 per share, and the full-year forecast calls for an annual dividend of ¥126.00. Based on forecast EPS of ¥179.27 for the full year, the forecast Payout Ratio is approximately 70.3%. Calculated based on actual cumulative Q3 Net Income, the Payout Ratio is equivalent to 50.8%; both levels are substantially below 100%. Treasury shares are minimal, and no additional returns through share buybacks have been confirmed; accordingly, the Payout Ratio is the applicable return metric. Financial capacity consisting of ¥46.7B in cash and deposits and ¥0.4B in interest-bearing debt reinforces dividend safety. However, retained earnings decreased by ¥5.5B year on year, necessitating continued monitoring of future capital allocation trends.

Risk Factors

1. Business concentration risk: The Idle Asset Utilization Business accounts for 98.3% of Revenue and the majority of profit. As a result, changes in the supply environment, utilization demand, and competitive landscape for idle assets such as parking facilities have a direct impact on consolidated performance.

2. Risk of establishing sustained profitability in the new business: The Visualization Business turned around from a loss of ¥0.1B in the same period of the prior year to a profit of ¥0.2B, but its Revenue remains small at ¥2.1B, and the reproducibility of its profitability has yet to be confirmed.

3. Asset investment recovery risk: Investment has expanded, with intangible fixed assets at ¥7.2B (including ¥4.6B in software under construction) and property, plant and equipment up +¥1.2B year on year. The relationship between depreciation expenses and earnings contribution after the assets become operational will need to be monitored continuously.

Industry Benchmark (Reference; Compiled by the Company)

Industry Benchmark (real_estate)

Profitability and Return

The Company’s operating margin and Net Income margin significantly exceed the industry median, placing its profitability at a high level within the industry.

Growth and Capital Efficiency

The Revenue growth rate exceeds the industry median but falls short of the upper range of 54.7%, placing the Company in the mid-to-upper tier of the industry.

※Source: Compiled by the Company

Key Points from the Earnings Results

1. Revenue, Operating Income, and Net Income all grew by approximately 26–27% year on year, confirming that the quality of profit conversion from revenue growth has been maintained.

2. The core Idle Asset Utilization Business maintained a high profit margin of 17.7%, although it declined slightly from the prior year. The balance between the gross margin and SG&A ratio will determine future trends in the profit margin.

3. Cumulative Q3 progress against the full-year plan was 68.3% for Operating Income and 68.3% for Ordinary Income, slightly below the standard progress rate of 75%. Q4 results will provide a basis for confirming achievement of the full-year plan.

Theoretical Share Price (Reference Value)

Sensitivity: ¥903–¥954 for ±1% in the cost of equity, and ¥918–¥943 for ±0.1 in ω.

Notes:

• Net assets as of the quarter-end are used (there is a timing difference from the full-year forecast).
• Because net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Model used: 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 or a recommendation of any specific investment action, and does not predict or guarantee future share prices.)

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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 a professional as necessary.

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