| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥292.2B | ¥254.5B | +14.8% |
| Operating Income / Operating Profit | ¥59.1B | ¥56.6B | +4.5% |
| Profit Before Tax | ¥59.5B | ¥56.6B | +5.1% |
| Net Income | ¥41.3B | ¥38.6B | +6.8% |
| ROE | 18.4% | 19.4% | - |
For the fiscal year ended March 2026, the Full Year results delivered revenue of ¥292.2B (YoY +¥37.7B, +14.8%), Operating Income of ¥59.1B (YoY +¥2.6B, +4.5%), Ordinary Income of ¥59.5B (YoY +¥2.9B, +5.1%), and Profit Attributable to Owners of Parent of ¥41.6B (YoY +¥2.9B, +7.3%), achieving top-line and bottom-line growth. The core Life Services Platform business led two-digit revenue growth at +15.0%, and M&A contributions (3 newly consolidated companies) also supported results. While the operating margin remained high at 20.2%, it declined by approximately 2.0pp from 22.2% in the prior year as SG&A ratio rose (60.4% vs. 59.9% prior year), compressing profitability. Gross margin narrowed to 80.5% from 82.2% a year earlier (down 1.7pp), suggesting changes in business mix and cost-of-sales structure. EPS was ¥41.66 (prior year ¥38.13, +9.3%), outpacing net income growth, reflecting dilution mitigation from share buybacks. Operating Cash Flow (OCF) was ¥42.5B, 1.02x Net Income, securing a minimum level of cash quality, but it fell sharply by 42.0% YoY as rising trade receivables and working capital demand weighed. Free Cash Flow was limited to ¥4.2B; aggressive investing (Investing CF ¥-38.2B, including ¥24.4B for subsidiary acquisitions) alongside dividends of ¥10.5B was financed by drawing down existing cash.
[Revenue] Revenue of ¥292.2B (YoY +14.8%) was driven by the core Life Services Platform business, which recorded ¥285.5B ( +15.0%) and accounted for 97.7% of total revenue. Other segments contributed ¥6.7B (+9.3%) and remained small but steady. Externally, contributions from three newly consolidated companies, expansion of the incumbent user base, and unit-price improvements are believed to have driven the revenue increase. Trade receivables increased to ¥62.3B (prior ¥50.3B, +23.9%), rising faster than revenue growth; Days Sales Outstanding (DSO) extended to approximately 78 days versus the prior year, lengthening collection periods and pressuring working capital. Cost of sales rose to ¥56.9B (prior ¥45.5B, +25.1%), outpacing revenue growth, resulting in gross margin of 80.5% (down 1.7pp from 82.2%). This may reflect changes in business mix and cost structures of newly consolidated subsidiaries.
[Profitability] Operating Income of ¥59.1B (+4.5%) benefited from higher revenue, but SG&A increased to ¥176.4B (prior ¥152.5B, +15.7%), outpacing revenue growth of +14.8%, causing operating margin to fall to 20.2% from 22.2% a year earlier (approx. -2.0pp). The main drivers of SG&A increases appear to be personnel costs and front-loaded development and advertising investments, consistent with a growth-investment phase. Other income of ¥0.6B and other expenses of ¥0.4B were immaterial with limited impact on core operations. Non-operating items nearly offset—financial income ¥0.7B (prior ¥0.3B) and financial expenses ¥0.4B (prior ¥0.3B)—so Ordinary Income rose to ¥59.5B (+5.1%), similar to operating income growth. After accounting for Profit Before Tax ¥59.5B and income taxes of ¥18.2B (effective tax rate 30.6%), Profit Attributable to Owners of Parent was ¥41.6B (+7.3%), outpacing operating income growth (+4.5%). This was aided by a deterioration in non-controlling interests from -¥0.1B to -¥0.3B and a relatively lower tax burden. Comprehensive income was ¥41.4B (prior ¥38.8B), largely aligned with net income; other comprehensive income ¥0.1B (prior ¥0.2B) was minor, indicating minimal one-off effects. In conclusion, while revenue and profit increased, rising SG&A and narrower gross margin were margin headwinds.
The Life Services Platform business posted revenue ¥285.5B (prior ¥248.4B, +15.0%), Operating Income ¥57.6B (prior ¥56.0B, +2.9%), and margin 20.2% (prior 22.5%), delivering revenue and profit growth but with a 2.3pp margin decline. Profit growth lagged revenue growth, possibly due to front-loaded advertising and development investments and higher customer acquisition costs. The Other segment recorded revenue ¥6.7B (prior ¥6.2B, +9.3%), Operating Income ¥1.4B (prior ¥0.8B, +84.4%), and margin 21.1% (prior 12.4%), showing high growth and profitability despite small scale as new initiatives monetized. Because the core business accounts for 97.7% of revenue, corporate profitability is highly dependent on the margin trends of the core segment.
[Profitability] ROE 19.6% remained at the prior-year level and is a strong showing, 9.5pp above the industry median of 10.1%. A five-factor decomposition of ROE shows net profit margin 14.2% (down ~1.0pp from 15.2% prior), total asset turnover 0.72x (improved from 0.68x), and financial leverage 1.81x (down from 1.88x), with turnover improvement offsetting lower leverage and margin to sustain ROE. Operating margin 20.2% (down 2.0pp from 22.2%) remains substantially above the industry median of 8.1% by 12.1pp, indicating strong profitability. Gross profit margin 80.5% narrowed 1.7pp from 82.2%, with rising cost ratios contributing to margin dilution. Effective tax rate was 30.6% (prior 31.7%), a standard level.
[Cash Quality] Operating CF / Net Income was 1.02x, providing minimal cash backing but down from 1.90x in the prior year. Operating CF / EBITDA was 0.56x (EBITDA calculated as Operating Income ¥59.1B + Depreciation & Amortization ¥16.7B = ¥75.8B), indicating working capital demand depressed cash conversion efficiency. DSO was approximately 78 days (Trade receivables ¥62.3B ÷ Revenue ¥292.2B × 365 days), extended from about 72 days a year earlier, showing notable collection period elongation.
[Investment Efficiency] Total asset turnover improved to 0.72x (Revenue ¥292.2B ÷ Total assets ¥405.6B) from 0.68x, reflecting better asset efficiency. Goodwill was ¥134.8B, representing 33.2% of total assets and 60.0% of equity, indicating high reliance on M&A and a need to monitor potential impairment risk.
[Financial Soundness] Equity Ratio 55.5% (prior 53.2%) improved. Debt/Equity ratio was 25.6% (interest-bearing debt ¥57.4B ÷ equity ¥224.5B; prior 19.5%), slightly higher but at a healthy level. Interest-bearing debt / EBITDA was low at 0.76x (¥57.4B ÷ EBITDA ¥75.8B), indicating strong repayment capacity. Current ratio was 128.1% (current assets ¥197.3B ÷ current liabilities ¥154.0B), generally healthy, but short-term borrowings of ¥23.5B and a current liabilities ratio of 85.1% (current liabilities ¥154.0B ÷ total liabilities ¥181.0B) indicate a bias toward short-term liabilities and a maturity mismatch risk to watch.
Operating CF was ¥42.5B, down 42.0% from ¥73.3B in the prior year. Starting from Profit Before Tax ¥59.5B and adding back depreciation ¥16.7B, increases in working capital materially impacted cash flow. Key drivers included an increase in trade receivables of ¥10.1B (accounts receivable ¥62.3B, prior ¥50.3B), a decrease in advance payments ¥0.4B, an increase in trade payables ¥5.8B, and a decrease in deposits received ¥11.8B; the combined effect of lower deposits received and higher receivables amounted to roughly ¥22B of cash outflow. Corporate tax payments of ¥16.4B also weighed on cash. Investing CF was -¥38.2B, comprising acquisition of tangible fixed assets ¥1.3B, acquisition of intangible assets ¥11.3B, and acquisition of subsidiary shares ¥24.4B—M&A investments accounted for the bulk. Free Cash Flow was thin at Operating CF ¥42.5B + Investing CF -¥38.2B = ¥4.2B, so dividend payments ¥10.5B and share buybacks ¥6.9B (total shareholder returns ¥17.4B) were funded from existing cash. Financing CF was -¥20.2B, composed of net short-term borrowings decrease ¥0.5B, long-term borrowings ¥24.0B, long-term borrowings repayments ¥20.8B, lease liability repayments ¥6.5B, dividends ¥10.5B, share repurchases ¥6.9B, and proceeds from exercise of stock options ¥1.0B—balancing long-term borrowing with shareholder returns and deleveraging. Cash and cash equivalents decreased ¥15.7B from ¥142.9B at the beginning of the period to ¥127.2B at the end, indicating that concurrent growth investments and shareholder returns strained liquidity. Improving working capital management—particularly shortening DSO and stabilizing advance receipts and deposits—will be key to strengthening future cash generation.
Overall quality of earnings is good, centered on recurring operating profits. Other income ¥0.6B (0.2% of revenue) and other expenses ¥0.4B (0.1% of revenue) were minor, indicating limited one-off effects. In non-operating items, financial income ¥0.7B and financial expenses ¥0.4B roughly offset, and non-operating income contributed less than 1% of revenue, underscoring strong reliance on core operations. The difference between comprehensive income ¥41.4B and Net Income ¥41.3B is only ¥0.1B (other comprehensive income), indicating negligible unrealized gains/losses and alignment between accounting profit and economic reality. The accrual ratio ((Net Income - Operating CF) ÷ Total assets) = (¥41.3B - ¥42.5B) ÷ ¥405.6B = -0.3%, a minor negative, showing profits are backed by cash. However, Operating CF / EBITDA at 0.56x is low and the erosion of working capital (higher receivables, lower deposits) has slowed cash conversion—this warrants attention. No extraordinary items were disclosed; Ordinary Income and Profit Before Tax are nearly identical, indicating a maintained recurring earnings structure.
Full-year guidance is unchanged at Revenue ¥335.0B (YoY +31.7%), Operating Income ¥64.3B (+8.8%), Profit Attributable to Owners of Parent ¥43.9B (+5.6%), EPS ¥44.09, and dividend ¥0. Progress against the current-year results is Revenue 87.2%, Operating Income 92.0%, and Net Income 94.7%, slightly behind the standard progress benchmark (100% at Q4). The revenue shortfall may reflect seasonality or timing differences in contributions from newly consolidated entities, but the relatively high progress rates for Operating Income and Net Income imply expectations for revenue growth and recovery in operating leverage into the next period. The dividend forecast of ¥0 is in line with prior policy, while the year-end dividend of ¥11 was an unexpected additional return. Achieving guidance requires acceleration of revenue growth (current period +14.8% vs. full-year target +31.7%), improvement in SG&A efficiency to restore operating margins, full-year contributions from M&A, ARPU increases in existing businesses, and normalization of working capital.
The year-end dividend is ¥11 (interim ¥0), resulting in annual dividend of ¥11 and a payout ratio of approximately 27.5% (total dividends ¥10.5B ÷ Profit Attributable to Owners of Parent ¥41.6B), a sustainable level. Because the prior year had a ¥0 year-end dividend, this constitutes a practical reinstatement and signals stronger shareholder-return posture. Share buybacks amounted to ¥6.9B (per CF statement), and treasury stock cancellations of ¥7.6B were executed, reducing treasury stock balance to ¥48.5B (prior ¥50.3B). Total shareholder returns of dividends ¥10.5B plus share buybacks ¥6.9B = ¥17.4B, resulting in a Total Return Ratio of approximately 43.3% (¥17.4B ÷ Profit Attributable to Owners of Parent ¥40.5B, after non-controlling interest deduction). Coverage of total returns by Free Cash Flow (¥4.2B) is low at 0.24x, meaning current returns were funded by drawing down existing cash. From a dividend continuity perspective, ample liquidity (cash ¥127.2B) and stable Operating CF generation ¥42.5B provide a buffer, but sustaining both ongoing investment and expanded returns will require stronger Operating CF and better working capital efficiency.
Business concentration risk: The Life Services Platform business accounts for 97.7% of revenue and the majority of Operating Income, creating a highly concentrated business structure. Market changes in that business (intensified competition, regulatory tightening, or demand decline) could severely impact consolidated performance. Although revenue growth of +15.0% was solid, high dependence on a single business means insufficient portfolio diversification.
Goodwill impairment risk: Goodwill of ¥134.8B represents 60.0% of equity, reflecting heavy M&A reliance. If integration of the three newly consolidated companies does not proceed as planned, business plans are missed, or discount rates rise, impairment losses could materialize. Goodwill/EBITDA multiple is 1.78x (¥134.8B ÷ ¥75.8B), which is elevated and could trigger impairment if future profitability weakens.
Working capital risk: DSO of 78 days shows a lengthening trend; deterioration in counterparties’ credit or an economic downturn could increase bad-debt risk. The decrease in deposits received of ¥11.8B and a substantial YoY decline in Operating CF (-42.0%) indicate fragility in working capital management and could constrain financial flexibility if cash generation becomes volatile.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 19.6% | 10.1% (2.2%–17.8%) | +9.5pt |
| Operating Margin | 20.2% | 8.1% (3.6%–16.0%) | +12.1pt |
| Net Profit Margin | 14.1% | 5.8% (1.2%–11.6%) | +8.3pt |
Profitability metrics rank high within the industry; ROE, operating margin, and net profit margin all substantially exceed medians.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 14.8% | 10.1% (1.7%–20.2%) | +4.7pt |
Revenue growth outpaces the median, maintaining relatively high growth within the industry.
※ Source: Company compilation
While the company achieved revenue and profit growth and maintained high profitability, note the roughly 2.0pp decline in operating margin and 1.7pp narrowing of gross margin—reflecting higher SG&A during the growth-investment phase and changes in cost structure. Re-establishing operating leverage will hinge on improving advertising efficiency, increasing ARPU, and expanding LTV via cross-sell.
Weakening cash generation is a concern: Operating CF / EBITDA 0.56x, DSO 78 days, and Operating CF YoY -42.0% point to room for improving working capital management. Free Cash Flow ¥4.2B falls short of combined dividends and buybacks ¥17.4B, so shortening collection periods and stabilizing advance receipts/deposits are essential to balance investment and shareholder returns.
Goodwill of ¥134.8B (60.0% of equity) is a major monitoring point for impairment risk. Early realization of M&A synergies and integration of the three newly consolidated companies are critical to sustain performance. Disclosures on integration progress, business-plan attainment, and impairment testing will be key future watch points.
This report is an earnings analysis automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in specific securities. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your own responsibility; consult a professional advisor as needed.