| Metric | This Period | Prior Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥317.1B | ¥257.8B | +23.0% |
| Operating Income | ¥50.0B | ¥40.6B | +23.1% |
| Ordinary Income | ¥54.3B | ¥41.1B | +32.1% |
| Net Income | ¥27.6B | ¥12.9B | +113.9% |
| ROE | 25.2% | 14.7% | - |
For the fiscal year ended March 2026, Revenue / Net Sales were ¥317.1B (YoY +¥59.3B, +23.0%), Operating Income was ¥50.0B (YoY +¥9.4B, +23.1%), Ordinary Income was ¥54.3B (YoY +¥13.2B, +32.1%), and Net Income attributable to owners of the parent was ¥29.7B (YoY +¥13.1B, +78.4%). The Content Business (mobile device & mail-order) accounted for 86.1% of sales and drove double-digit growth of +24.6% YoY. Gross margin declined to 28.0% from 30.3% a year earlier (-2.3pt), but SG&A ratio was compressed from 14.6% to 12.2%, maintaining an Operating Margin of 15.8% (same as prior year). Strong growth in Ordinary Income was supported by non-operating gains including foreign exchange gains of ¥1.8B and interest income of ¥1.2B, and the doubling of Net Income was driven by a reduction in extraordinary losses (¥4.3B vs. ¥9.0B prior year) and a relative decrease in non-controlling interests. Operating Cash Flow (OCF) reached ¥70.2B (YoY +28.0%), 2.5x Net Income, with increases in Contract Liabilities of ¥79.8B (YoY +46.4%) and Accounts Payable of ¥91.5B (YoY +31.5%) supporting cash inflows. Free Cash Flow was ¥58.0B, covering dividends of ¥6.4B and share buybacks of ¥10.9B, and Cash and Deposits increased to ¥163.8B (YoY +32.9%). ROE was 25.2% (prior year 23.7%), Total Assets were ¥316.2B (YoY +28.2%), and Net Assets were ¥109.4B (YoY +24.6%), indicating an expanded capital base.
[Revenue] Revenue of ¥317.1B (YoY +23.0%) expanded on the back of both the Content Business at ¥273.1B (composition ratio 86.1%, YoY +24.6%) and the Electronic Ticket Business at ¥44.8B (14.1%, YoY +13.4%). The Content Business benefited from robust mobile distribution and mail-order sales; user base expansion and an increase in handled content/products drove revenue growth. The Electronic Ticket Business contributed via higher volumes in electronic ticket sales and ticket trading plus expanded ancillary services. Other businesses were small at ¥0.4B (YoY +79.2%) but showed high growth. Cost of sales rose more than revenue to ¥228.5B (YoY +27.2%), pushing the cost of sales ratio to 72.0% (prior year 69.7%, +2.3pt deterioration), likely due to increases in content royalties, payment fees, and promotion expenses.
[Profitability] Gross profit was ¥88.7B (YoY +13.4%), with gross margin narrowing to 28.0% (prior year 30.3%, -2.3pt). SG&A was contained at ¥38.7B (YoY +3.0%), improving the SG&A ratio to 12.2% (prior year 14.6%, -2.4pt), resulting in Operating Income of ¥50.0B (YoY +23.1%) and an Operating Margin of 15.8% (in line with prior year). Non-operating income rose to ¥4.3B, primarily due to interest income of ¥1.2B (prior ¥0.1B) and foreign exchange gains of ¥1.8B (none in prior year), up sharply from ¥0.6B. Non-operating expenses were minor at ¥0.1B, leading to Ordinary Income of ¥54.3B (YoY +32.1%). Extraordinary gains included ¥0.1B from sale of fixed assets, while extraordinary losses totaled ¥4.3B (impairment losses ¥2.5B and valuation losses on investment securities ¥2.4B) versus ¥9.0B in the prior year, reducing extraordinary losses year-over-year. Profit before income taxes was ¥50.2B (YoY +54.9%), income taxes ¥16.4B (effective tax rate 32.7%, compared with 40.0% in prior year due to deferred tax effects). After deducting non-controlling interests of ¥4.1B (YoY +45.9%), Net Income attributable to owners of the parent was ¥29.7B (YoY +78.4%). Comprehensive income was ¥37.2B (YoY +53.4%), which includes Net Income plus other comprehensive income of ¥3.4B (valuation differences on available-for-sale securities; prior year ¥4.8B). In summary, the company achieved revenue and profit growth, maintained operating margin, and saw a substantial increase in Net Income due to higher non-operating income and reduced extraordinary losses.
The Content Business (mobile device & mail-order) recorded Revenue of ¥273.1B (YoY +24.6%), Operating Income of ¥45.2B (YoY +24.2%), and margin of 16.5% (prior 16.6%, -0.1pt), maintaining high levels. Both revenue and profit sustained double-digit growth, driving overall company performance as the core business. The Electronic Ticket Business posted Revenue of ¥44.8B (YoY +13.4%), Operating Income of ¥13.5B (YoY +28.2%), and margin of 30.2% (prior 26.9%, +3.3pt), demonstrating high profitability. Expansion of the revenue base and operational efficiency improvements delivered profit growth that outpaced revenue growth. Other businesses were ¥0.4B in revenue with an Operating Loss of ¥0.2B (prior year loss ¥0.4B, narrowing deficit) and remain small in scale. Overall, the Content Business scale expansion and Electronic Ticket Business margin improvement contributed to maintaining the company-wide Operating Margin. The Content Business accounted for 76.0% of Operating Income and the Electronic Ticket Business 22.7%, with the latter’s margin improvement contributing to an improved revenue mix.
[Profitability] Operating Margin (Operating Income / Revenue) was 15.8% (prior year 15.8%), flat. Ordinary Income Margin (Ordinary Income / Revenue) was 17.1% (prior year 15.9%, +1.2pt), and Net Income Margin was 8.7% (prior year 5.0%, +3.7pt). Maintenance of Operating Margin resulted from SG&A ratio improvement (12.2% vs. 14.6%) offsetting gross margin decline (28.0% vs. 30.3%). The large improvement in Net Income Margin was driven by higher non-operating income (foreign exchange gains ¥1.8B, interest income ¥1.2B) and reduction in extraordinary losses (¥4.3B vs. ¥9.0B). ROE was 25.2% (prior year 23.7%, +1.5pt) and ROA was 17.2% (prior year 18.6%, -1.4pt); ROE increase was due to higher Net Income and improved equity turnover. Total asset turnover was 1.00x (prior year 1.05x), a slight decline but still high. [Cash Quality] OCF / Net Income was 2.54x (prior year 4.25x), a good level though down YoY because Net Income growth outpaced OCF; OCF itself was robust at ¥70.2B (YoY +28.0%). Free Cash Flow was ¥58.0B (prior ¥43.3B, +34.0%), covering capital expenditure of ¥0.4B, dividends of ¥6.4B, and share buybacks of ¥10.9B, raising Cash and Deposits by ¥40.6B to ¥163.8B. [Investment Efficiency] CapEx / Depreciation was 0.18x (prior 1.43x), a sharp decline indicating restrained investment. Investment in tangible and intangible assets was below maintenance levels, suggesting limited medium- to long-term growth investment. [Financial Soundness] Equity Ratio was 34.6% (prior 33.8%, +0.8pt), Current Ratio was 121.5% (prior 125.7%, -4.2pt); while below the industry benchmark of 150%, a Cash Ratio of 80.0% provides ample liquidity for short-term obligations. Debt-to-Equity ratio was 1.89x (prior 1.81x), slightly higher but within a healthy range below D/E benchmark 2.0. The majority of current liabilities consist of Contract Liabilities ¥79.8B (prior ¥54.5B, +46.4%) and Accounts Payable ¥91.5B (prior ¥69.6B, +31.5%), a healthy composition centered on advance receipts and trade payables.
OCF was ¥70.2B (YoY +28.0%), demonstrating high-quality cash generation well above profit before income taxes of ¥50.2B. Key working capital movements included increase in Trade Receivables -¥13.3B (prior year cash inflow of +¥3.0B), increase in Trade Payables +¥21.9B (prior +¥21.0B), and increase in Other Liabilities +¥25.2B (prior +¥12.8B), with build-up of Contract Liabilities (advance receipts) and higher Accounts Payable supporting cash inflows. Income taxes paid were -¥18.8B (prior -¥13.7B), reflecting higher taxable income. Operating Cash Flow subtotal (before working capital changes) was ¥88.3B (prior ¥68.5B, +29.0%), indicating strong operating cash generation. Investing Cash Flow was -¥12.2B (prior -¥11.5B); CapEx was -¥0.3B and acquisition of tangible/intangible assets -¥1.7B, relatively small, while acquisition of investment securities increased to -¥23.1B (prior -¥9.7B), partly offset by proceeds from sales of ¥8.0B (prior ¥0.4B). Free Cash Flow was ¥58.0B (prior ¥43.3B, +34.0%), and after dividends ¥6.4B and share buybacks ¥10.9B, Cash and Deposits increased by ¥40.6B. Financing Cash Flow was -¥17.4B (prior -¥7.8B), mainly due to dividends and share buybacks. Cash and cash equivalents rose from ¥123.3B at the beginning of the period to ¥163.8B at the end (+¥40.6B), supported by strong OCF, restrained investment, and the healthy advance-receipt business model.
Of Ordinary Income ¥54.3B, Operating Income ¥50.0B represents recurring business earnings, and non-operating income ¥4.3B includes interest income ¥1.2B and foreign exchange gains ¥1.8B. The increase in interest income is attributable to the accumulation of Cash and Deposits of ¥163.8B and an improved interest rate environment, while foreign exchange gains may include transitory FX fluctuations. Net Extraordinary Items were -¥4.2B (losses ¥4.3B - gains ¥0.1B); impairment losses ¥2.5B and valuation losses on investment securities ¥2.4B are temporary factors, though impairments indicate business reviews or asset efficiency measures. Net Income ¥29.7B vs. Comprehensive Income ¥37.2B shows other comprehensive income of ¥3.4B (pre-tax valuation difference on securities) was added. Although valuation differences shrank from ¥4.8B in the prior year, aggressive investment in investment securities (balance ¥36.3B vs. ¥19.8B prior, +83.5%) increases potential future valuation volatility. The ratio of OCF ¥70.2B to Net Income ¥29.7B is 2.36x, indicating strong cash backing of profits, but working capital increases—Contract Liabilities +¥25.2B and Accounts Payable +¥21.9B—have boosted cash inflows, so attention is needed on the timing of future cash outflows related to performance obligations. Accrual ratio is -12.8%, favorable and showing no excessive accounting-led profit recognition.
Year-end dividend per share was ¥20, with total dividends of ¥6.4B (prior ¥4.9B, +30.6%). Payout Ratio was 38.6% (dividends only), a reasonable level against EPS of ¥41.85. Share buybacks amounted to ¥10.9B (prior ¥3.5B), bringing total returns to ¥17.3B and implying a Total Return Ratio of approximately 58%. Total returns represent about 30% of Free Cash Flow ¥58.0B, with Free Cash Flow coverage of 3.35x, indicating ample buffer. Treasury stock increased to -¥17.7B (prior -¥7.9B, +123.4%), reflecting a return focus to improve capital efficiency. With Cash and Deposits of ¥163.8B and robust OCF, short-term dividend cut risk is extremely low. However, CapEx / Depreciation at 0.18x indicates constrained growth investment, and rebalancing returns and growth investment is a mid-term challenge.
Business concentration risk: The Content Business accounts for 86.1% of Revenue and 76.0% of Operating Income, indicating high dependence on a single business. Maturation of the mobile device market, rising content procurement costs, or platform rule changes (app store fees / regulatory tightening) could pressure profitability. While the Electronic Ticket Business has high margins (30.2%), its revenue composition is limited at 14.1%, so portfolio diversification is modest.
Gross margin decline and cost volatility risk: Cost of sales ratio of 72.0% (prior 69.7%, +2.3pt) reflects pressure from higher content royalties, payment fees, and promotion expenses. While SG&A restraint maintained Operating Margin, persistent gross margin deterioration could exhaust SG&A reduction potential and lead to Operating Margin deterioration. Low-margin product mix or intensified competition that forces price reductions could further erode gross margin.
Contract liabilities and working capital volatility risk: Contract Liabilities rose sharply to ¥79.8B (YoY +46.4%), boosting OCF. While this highlights the strength of an advance-receipt business model, mismatches in timing between service fulfillment and revenue recognition could create short-term cash flow volatility. Accounts Payable also expanded to ¥91.5B (YoY +31.5%), and changes in payment terms with suppliers or increased concentration of procurement could affect cash flow stability.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 15.8% | 8.1% (3.6%–16.0%) | +7.7pt |
| Net Income Margin | 8.7% | 5.8% (1.2%–11.6%) | +2.9pt |
Both Operating Margin and Net Income Margin substantially exceed the information & communications industry median, indicating superior profitability within the sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 23.0% | 10.1% (1.7%–20.2%) | +12.9pt |
Revenue growth rate exceeds the industry median by 12.9pt, positioning the company as a high-growth entity.
※ Source: Company compilation
Balancing profitability and growth: The company achieved an Operating Margin of 15.8% (industry median +7.7pt) and Revenue Growth Rate of 23.0% (industry median +12.9pt) concurrently, nearly satisfying the Rule of 40 (Revenue Growth Rate + Operating Margin = 38.8%). Improvement in SG&A ratio (12.2% vs. 14.6%) offset gross margin decline (28.0% vs. 30.3%), enabling maintenance of Operating Margin, which is commendable; however, structural risk from declining gross margin warrants close monitoring.
Expanded profit contribution from the Electronic Ticket Business: With Operating Margin of 30.2% (prior 26.9%, +3.3pt) and Operating Income growth of +28.2% (Revenue growth +13.4%), the segment demonstrates high profitability. Although the segment’s revenue share is 14.1%, its profit share is 22.7%, indicating strong profit efficiency and its strategic importance for improving business mix and diversifying revenue away from the Content Business. Gradually reducing reliance on the Content Business (86.1% of revenue) and enhancing portfolio diversification will be key to medium-term growth.
Reassessment of capital allocation and constrained investment: CapEx / Depreciation of 0.18x (prior 1.43x) indicates significant restraint in growth investment, and most Free Cash Flow ¥58.0B was allocated to dividends ¥6.4B and share buybacks ¥10.9B. While a Total Return Ratio of about 58% is sustainable, heavy allocation to investment securities (+¥16.5B) over growth investments warrants reassessment from the perspective of long-term expansion and competitiveness. Leveraging the advance-receipt business model (Contract Liabilities ¥79.8B, +46.4%) to redirect part of OCF into technology development, content expansion, and talent acquisition could address gross margin decline risk and support sustained growth.
This report was auto-generated by AI analyzing XBRL financial statement data and is a financial analysis document. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your responsibility; please consult professionals as needed before making investment choices.