Ateam Holdings Co.,Ltd. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥5.53B
• Operating Income: ¥270M
• Net Income: ¥129M
• EPS: ¥15.89

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Ateam Holdings reported FY2026 Q1 revenue of ¥5.529bn, down 2.6% YoY, while delivering a 20.5% YoY increase in operating income to ¥270m, indicating solid cost discipline and/or a favorable mix shift. Gross profit was ¥4.824bn, implying a very high gross margin of 87.2%, consistent with asset-light, service-oriented businesses. The operating margin expanded to 4.9% (from roughly 4.0% a year ago), demonstrating operating leverage despite a modest revenue contraction. Ordinary income of ¥234m was below operating income, suggesting modest non-operating losses or expenses. Net income rose sharply by 128.2% YoY to ¥295m, outpacing operating income growth, which likely reflects extraordinary gains under JGAAP (given net profit exceeding ordinary income) or tax-related items. EPS was ¥15.89 for the quarter, supported by the stronger bottom line. On a DuPont basis, reported ROE was 3.22% for the quarter, driven by a 5.34% net margin, asset turnover of 0.385x, and financial leverage of 1.57x. Using the balance sheet, implied equity ratio is approximately 63.7% (equity ¥9.153bn / assets ¥14.37bn), indicating a strong capital base, despite the reported equity ratio field showing 0.0% (treated as unreported). Liquidity is robust with a current ratio of 232.6% and quick ratio of 226.3%, supported by ¥6.363bn in working capital. Total liabilities are ¥6.039bn versus equity of ¥9.153bn, placing debt-to-equity at 0.66x and underscoring conservative leverage. Cash flow statements were unreported this quarter (values shown as zero), limiting assessment of earnings-to-cash conversion and free cash flow. Dividend data were also unreported (DPS and payout showing zero), so no conclusions can be drawn about policy changes from this quarter alone. The margin structure indicates significant fixed-cost leverage: operating income growth was achieved on lower revenues, pointing to effective SG&A management and/or revenue mix improvements. The profitability uplift at the operating level appears sustainable if cost discipline and stable demand persist; however, the step-up in net income likely includes non-recurring items. Overall, the company appears financially sound with strong liquidity and moderate leverage, but cash flow and dividend insights are constrained by disclosure gaps this quarter.

Profitability Analysis

ROE_decomposition: DuPont: Net margin 5.34% × Asset turnover 0.385 × Financial leverage 1.57 = ROE 3.22% (quarter). Annualization would raise the ratio, but we refrain from annualizing due to potential seasonality. margin_quality: Gross margin of 87.2% reflects an asset-light model; operating margin of ~4.9% improved from ~3.9% a year ago (current ¥270m / ¥5.529bn vs. implied prior ¥224m / ¥5.675bn). Ordinary margin (~4.2%) below operating margin suggests minor non-operating losses. Net margin (5.34%) exceeds ordinary margin, implying extraordinary gains or other below-ordinary items. operating_leverage: Revenue declined 2.6% YoY while operating income rose 20.5% YoY, implying margin expansion of ~0.9pp. This points to effective SG&A control and/or favorable mix. With high gross margins, incremental revenues should convert efficiently to operating profit if volume stabilizes.

Growth Assessment

revenue_sustainability: Top line contracted modestly (−2.6% YoY) suggesting a soft demand environment or intentional pruning of low-margin revenue. High gross margin indicates potential resilience if underlying users/clients are stable. profit_quality: Operating income growth outpacing revenue indicates underlying efficiency gains. However, the surge in net income vs. ordinary income implies contributions from non-recurring/extraordinary items; core profit growth is better reflected in operating income. outlook: If cost efficiencies persist and revenue stabilizes, operating margin could remain above prior-year levels. Near-term growth hinges on demand normalization in core businesses and sustaining acquisition costs and monetization metrics. The net income run-rate is unlikely to be a clean proxy for core earnings due to potential one-offs.

Financial Health

liquidity: Current ratio 232.6% and quick ratio 226.3% indicate ample short-term liquidity; working capital stands at ¥6.363bn. Cash balance was unreported, limiting a direct view on cash buffers. solvency: Debt-to-equity is 0.66x (total liabilities/equity), a conservative level. Implied equity ratio is ~63.7% (¥9.153bn/¥14.37bn), denoting a strong capital base despite the reported field showing 0.0% (treated as unreported). capital_structure: Assets ¥14.37bn funded by equity ¥9.153bn and liabilities ¥6.039bn. Financial leverage at 1.57x aligns with a prudent balance sheet structure.

Cash Flow Quality

earnings_quality: OCF, investing CF, and financing CF were unreported this quarter, so we cannot triangulate earnings with cash flow or assess accrual intensity. FCF_analysis: Free cash flow was unreported. With high gross margins and moderate capex needs typical of asset-light models, the medium-term potential for FCF generation is credible, but validation requires disclosed OCF and capex. working_capital: Inventories are modest at ¥303m relative to current assets of ¥11.16bn, indicating limited stock risk. The sizable working capital of ¥6.363bn supports liquidity, though cash composition is unknown due to unreported cash balance.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio were reported as zero (treated as unreported). With EPS of ¥15.89 for the quarter and a strong equity base, capacity exists for distributions in principle, but no current data support a change in policy. FCF_coverage: FCF coverage is unreported; without OCF/capex data we cannot assess dividend coverage. policy_outlook: Given historical tendencies of balancing growth investment with returns, any dividend policy clarification would likely track sustained core profitability and visibility on cash generation; watch for guidance in upcoming disclosures.

Risk Assessment

Business Risks:

• Revenue softness in core services leading to negative operating leverage if cost discipline wanes
• Customer acquisition cost inflation and marketing efficiency variability
• Platform and algorithm dependency affecting traffic and monetization
• Competitive intensity in digital services leading to pricing pressure
• Execution risk in new product launches and service updates
• Potential reliance on one-off gains affecting reported net income volatility

Financial Risks:

• Limited visibility on cash flow conversion due to unreported CF statements
• Possible extraordinary item volatility under JGAAP affecting bottom-line comparability
• Working capital swings that could absorb liquidity despite headline ratios
• Interest rate and credit market changes impacting non-operating items, despite modest leverage

Key Concerns:

• Sustainability of operating margin gains amid revenue contraction
• Quality and repeatability of the net income surge vs. operating income trend
• Lack of reported cash flow data constraining assessment of earnings quality and FCF

Investment Implications

Key Takeaways:

• Operating income rose 20.5% YoY despite a 2.6% revenue decline, evidencing cost control and operating leverage.
• Gross margin is very high at 87.2%, supporting margin resilience if volumes stabilize.
• Net income growth (+128% YoY) likely includes non-recurring items as it exceeds ordinary income.
• Balance sheet is strong with an implied equity ratio of ~63.7% and debt-to-equity of 0.66x.
• Liquidity is ample (current ratio 233%, quick ratio 226%) with ¥6.36bn in working capital.
• Cash flow metrics were unreported, limiting assessment of earnings-to-cash conversion and dividend capacity.

Metrics to Watch:

• Revenue trajectory and ARPU/active user trends to gauge top-line stabilization
• SG&A ratio and operating margin sustainability
• Disclosure of OCF and capex to assess FCF conversion and quality of earnings
• Composition of non-operating and extraordinary items impacting net income
• Customer acquisition cost and marketing ROI metrics
• Working capital movements, especially receivables and payables days

Relative Positioning: The company exhibits stronger balance sheet resilience and liquidity than many asset-light peers, with improving operating margins despite near-term revenue softness; however, visibility on cash flow and the quality of the bottom line is comparatively weaker this quarter due to unreported CF and itemization of extraordinary gains.

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