Quick View
| Metric | Current | Prior | YoY |
|---|---|---|---|
| Revenue | ¥11.4B | ¥9.8B | +15.5% |
| Operating Income | ¥5.2B | ¥4.3B | +19.0% |
| Ordinary Income | ¥5.2B | ¥4.3B | +19.1% |
| Net Income | ¥3.8B | ¥3.0B | +27.4% |
| ROE | 5.4% | 4.3% | - |
Executive Summary
Information Planning Co., Ltd. reported FY2026 Q1 consolidated results showing Revenue of 1.14B yen (YoY +15.5%), Operating Income of 520M yen (YoY +19.0%), Ordinary Income of 520M yen (YoY +19.1%), and Net Income of 380M yen (YoY +27.4%). The company achieved double-digit revenue growth with operating margin reaching 45.3%, reflecting strong profitability in its core System Development segment which generated 1.07B yen in sales with 504M yen operating income. The Real Estate segment contributed 65M yen in sales with 12M yen operating income. Total assets decreased to 82.0B yen from 84.2B yen while total equity increased to 71.5B yen from 69.5B yen, strengthening the equity position.
Key Metrics
[Profitability] Operating margin reached 45.3% in Q1 FY2026, representing a significant improvement and demonstrating exceptional operational efficiency. Net profit margin stood at 33.7%, indicating strong bottom-line profitability after tax obligations. Gross profit margin was maintained at 68.8%, reflecting the company's pricing power and cost management in its System Development business. ROE calculated at 5.4% shows room for improvement despite strong margins, constrained primarily by low asset turnover of 0.139 times. The profitability metrics indicate a highly efficient business model with limited asset utilization. [Cash Quality] Cash and deposits totaled 2.52B yen, providing robust coverage of short-term liabilities at 2.71 times. Working capital stood at 2.34B yen, demonstrating ample liquidity cushion. However, days sales outstanding reached 220 days and cash conversion cycle extended to 177 days, indicating delayed cash realization from operations. Accounts receivable decreased substantially by 37.8% YoY from 1.10B yen to 687M yen, suggesting improved collection efforts or seasonal variations in billing cycles. [Investment Efficiency] Asset turnover of 0.139 times reflects capital-intensive asset composition with tangible fixed assets of 4.44B yen representing significant land and building holdings. The low turnover constrains ROE expansion despite superior profit margins. Financial leverage remained conservative at 1.15 times, indicating predominantly equity-financed operations. [Financial Health] Equity ratio stood at 87.2%, up from 82.5% in the prior period, reflecting a fortress balance sheet. Current ratio of 351.1% indicates exceptional short-term debt coverage capability. Debt-to-equity ratio of 0.15 times demonstrates minimal leverage utilization. Total liabilities decreased to 1.05B yen with no significant interest-bearing debt disclosed.
Cash Flow Analysis
Cash and deposits increased from 1.63B yen in the prior period to 2.52B yen, representing a 890M yen increase that reflects strong operating profit generation of 520M yen and improved working capital management. The substantial reduction in accounts receivable of 417M yen YoY contributed significantly to cash accumulation, indicating accelerated collection cycles or timing of large project billings. Accounts payable decreased by 630M yen or 49.4%, suggesting expedited payments to suppliers or changes in procurement patterns that consumed cash but may strengthen supplier relationships. Inventory levels remained relatively stable, with work-in-process representing a significant component that warrants monitoring for project execution efficiency. The current ratio of 351.1% and cash coverage of short-term liabilities at 2.71 times confirm robust liquidity position. The company's cash generation appears supported by both operational performance and balance sheet optimization, though the extended cash conversion cycle of 177 days indicates that further working capital efficiency improvements could unlock additional cash flow.
Earnings Quality
Ordinary income of 520M yen closely aligned with operating income of 520M yen, indicating minimal non-operating items and core business-driven profitability. Non-operating income included a fixed asset sale gain of 45M yen, representing a one-time item that contributed approximately 12% to net income of 380M yen. Excluding this non-recurring gain, normalized net income would approximate 335M yen, suggesting that sustainable earnings power is slightly lower than reported figures. The effective tax rate of 31.5% falls within standard corporate tax ranges. Non-operating income represented approximately 4% of revenue, primarily comprising the asset sale gain with limited contributions from interest or dividend income. The company's earnings quality benefits from high gross margins and operating efficiency, though the presence of the 45M yen fixed asset sale gain warrants adjustment for assessing recurring profitability. The substantial reduction in accounts receivable combined with strong operating income growth suggests improved cash-backed earnings, though the extended days sales outstanding of 220 days and cash conversion cycle of 177 days indicate potential delays in converting accrual-based earnings to cash.
Risk Factors
Working capital management risk stems from extended days sales outstanding of 220 days and cash conversion cycle of 177 days, which could strain liquidity if project billings or collections experience further delays. The high concentration in work-in-process inventory suggests dependency on smooth project execution cycles, where any delays in System Development projects could impact cash realization and profitability timing. Asset utilization risk is evident from the low total asset turnover of 0.139 times, driven by substantial fixed asset holdings of 4.44B yen in land and buildings, requiring either significant revenue growth or asset optimization to improve return on invested capital and ROE beyond the current 5.4% level.
Industry Benchmark (Reference - Proprietary Data)
[Industry Position] (Reference - Proprietary Analysis) The company demonstrates exceptional profitability metrics relative to typical software and information services sector standards. Operating margin of 45.3% substantially exceeds industry median levels which typically range from 10-20% for IT services firms, positioning the company in the top tier for operational efficiency. Net profit margin of 33.7% similarly outperforms industry norms of 5-15%, reflecting either specialized service offerings or highly scalable business model. However, ROE of 5.4% falls below industry median ranges of 8-12% for software services companies, attributable to conservative capital structure with 87.2% equity ratio compared to industry median of 50-60%, and low asset turnover of 0.139 times versus industry median of 0.8-1.2 times. Revenue growth of 15.5% YoY compares favorably to industry median single-digit growth rates, indicating market share gains or expansion in served markets. The company's financial health metrics including current ratio of 351.1% and minimal leverage significantly exceed industry standards, reflecting exceptionally conservative financial management. (Industry: Information Technology Services, Comparison: Company historical trend and sector benchmarks, Source: Proprietary analysis)
Key Takeaways from Earnings
The earnings data reveals a highly profitable business model with operating margins of 45.3% and net margins of 33.7% that significantly exceed typical IT services sector benchmarks, driven primarily by the System Development segment generating 94% of total sales. This segment produced 504M yen operating income on 1.07B yen sales, demonstrating scalability and pricing power. The company's fortress balance sheet with 87.2% equity ratio and 2.52B yen cash provides substantial financial flexibility for growth investments or shareholder returns. However, ROE of 5.4% indicates substantial room for capital efficiency improvement, constrained by low asset turnover of 0.139 times due to large fixed asset holdings. The company's full-year guidance of 4.10B yen revenue (6.7% growth) and 1.54B yen operating income appears conservative given Q1 progress represents 27.8% of annual revenue target with 33.7% of operating income target already achieved. The working capital metrics showing 220-day collection cycles and 177-day cash conversion cycles represent areas requiring operational focus to unlock cash flow potential. The planned annual dividend of 60 yen per share against forecasted EPS of 72.73 yen implies an 82.5% payout ratio based on full-year projections, though Q1 actual results suggest dividend sustainability requires monitoring as interim dividend of 55 yen plus year-end 60 yen would exceed current run-rate earnings capacity without further profit acceleration.
This report was automatically generated by AI analyzing XBRL earnings data as an earnings analysis tool. This is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled from publicly available earnings data. Please make investment decisions at your own responsibility and consult professionals as needed.
AI Financial Analysis
Executive Summary
FY2026 Q1 was a strong start, with revenue, operating income and net income all growing at double-digit rates. Revenue increased 15.5% YoY to ¥1.138bn. Operating income rose 19.0% YoY to ¥516m. Ordinary income increased 19.1% to ¥517m. Net income rose 27.4% to ¥385m. The operating margin expanded by 134bp YoY to 45.3%, reflecting positive operating leverage. Gross margin, however, declined by 194bp to 68.8%, indicating a modest increase in delivery or project costs. SG&A rose only 1.7% YoY, materially below revenue growth, and this cost discipline more than offset gross-margin pressure. The net margin improved by 312bp YoY to 33.8%. Net income growth was also supported by a ¥44.5m gain on sale of non-current assets, equivalent to 3.9% of quarterly revenue and 7.9% of profit before tax. Excluding this non-recurring gain, profit before tax would have been approximately ¥517m, broadly aligned with ordinary income. The annualized ROE was an excellent 21.5%, supported primarily by a 33.7% net margin rather than balance-sheet leverage. The balance sheet remains highly conservative, with a 351.1% current ratio, a 0.15x debt-to-equity ratio and an 87.2% equity ratio. Cash and deposits of ¥2.521bn cover current liabilities by 2.7x. Q1 revenue progress was 27.8% of the full-year forecast, while operating-income progress reached 33.5%, both ahead of the standard 25% first-quarter run rate. The stronger-than-planned profit progress contrasts with the full-year operating-income forecast of only 0.2% growth, implying either conservatism in guidance, expected cost absorption later in the year, or revenue seasonality. The key forward issue is whether the company can preserve its exceptionally high operating margin while executing projects without a renewed rise in work in process.
Profitability Analysis
The annualized DuPont ROE is 21.5%, decomposed into a 33.7% net profit margin, 0.555x asset turnover and 1.15x financial leverage. The dominant driver is the exceptionally high margin profile, while financial leverage is modest and does not underpin shareholder returns. EBIT margin was 45.3%, well above the 15% benchmark generally regarded as excellent, and demonstrates substantial profitability in the company's IT solutions and software-related operations. Gross margin declined to 68.8% from 70.7% in the prior-year quarter, a 194bp contraction, suggesting that project delivery costs grew faster than revenue. Nevertheless, operating margin increased from 44.0% to 45.3%, because SG&A increased only 1.7% versus 15.5% revenue growth. This positive operating leverage appears sustainable to the extent that the company can scale revenue without proportionate additions to selling and administrative resources. Net margin rose to 33.8% from 30.7%, but the improvement was partly enhanced by the ¥44.5m fixed-asset disposal gain. The 5-factor analysis shows a 68.3% tax burden and a 108.9% interest burden; the latter exceeds 100% because profit before tax includes the extraordinary gain, rather than reflecting financing income. The 31.5% effective tax rate is moderately above the level implied by the 70% tax-burden reference point, but remains within a normal Japanese corporate tax range. The low 1.15x financial leverage confirms that profitability is generated operationally rather than through aggressive balance-sheet financing.
Growth Assessment
Revenue growth of 15.5% YoY and operating-income growth of 19.0% indicate that demand and cost scaling were favorable in Q1. The gap between revenue and operating-income growth reflects positive operating leverage, notwithstanding the lower gross margin. Q1 revenue of ¥1.138bn represents 27.8% of the ¥4.100bn full-year revenue forecast, 2.8 percentage points ahead of the standard 25% Q1 progress rate. Q1 operating income of ¥516m represents 33.5% of the ¥1.540bn full-year operating-income forecast, 8.5 percentage points ahead of the standard run rate. Q1 net income of ¥385m represents 35.0% of the ¥1.100bn full-year forecast. The forecast calls for full-year revenue growth of 6.7% but operating-income growth of only 0.2%, substantially below Q1 growth rates. This forecast profile implies an expectation of margin normalization later in the year, potentially through personnel, development, sales or project-delivery expenses. The high Q1 profit progress should therefore not be extrapolated mechanically. The ¥44.5m asset-sale gain boosted reported net income, so recurring earnings growth was less strong than the 27.4% headline net-income increase. The most important indicator of revenue sustainability is the conversion of in-process projects into recognized sales and cash collection while preserving the currently high operating margin.
Financial Health
Financial health is strong. Current assets of ¥3.266bn exceeded current liabilities of ¥930m, resulting in a current ratio and quick ratio of 351.1%. Working capital was ¥2.336bn, providing a substantial short-term liquidity cushion. Cash and deposits totaled ¥2.521bn, equivalent to 76.4% of current assets and 2.7x current liabilities. Total liabilities were only ¥1.047bn against equity of ¥7.155bn, producing a conservative 0.15x debt-to-equity ratio. The equity ratio improved to 87.2% from 82.6% in the prior-year quarter. There is no maturity-mismatch concern on the reported balance sheet because current assets substantially exceed current liabilities. Accounts receivable declined ¥417m, or 37.8% YoY, to ¥687m; this supports liquidity and may reflect collection of prior projects or billing timing. Accounts payable declined ¥63m, or 49.4% YoY, to ¥65m; lower supplier obligations reduce spontaneous working-capital funding but are immaterial relative to the liquidity reserve. Property, plant and equipment was ¥4.436bn, or 54.1% of total assets, led by buildings and land, making asset utilization and property-related returns relevant longer-term monitoring items. Goodwill was only ¥45m, equal to 0.6% of equity, and intangible assets were 1.0% of total assets, indicating negligible M&A-related balance-sheet dependency.
Notable B/S Changes
Accounts receivable: -¥417m (-37.8%) to ¥687m - improves liquidity and may reflect collection of previously billed projects or billing-cycle timing. Accounts payable: -¥63m (-49.4%) to ¥65m - reduces short-term supplier financing, though the impact is small relative to ¥2.521bn of cash and deposits. Buildings: +¥475m (+24.4%) to ¥2.416bn - a large absolute increase that contributed to the 54.1% PPE share of total assets; monitor asset utilization and returns. Total liabilities: -¥418m (-28.5%) to ¥1.047bn - strengthens solvency and helped lift the equity ratio to 87.2%.
Cash Flow Quality
Dividend Sustainability
Risk Assessment
Business risks include Project execution and revenue-recognition risk: work in process was ¥22m and represents 100% of reported inventory. The high WIP ratio is characteristic of a project-based IT/software delivery model, where unfinished implementation work is not yet recognized as revenue. The balance was down 21.9% YoY, which is directionally favorable, but delayed acceptance, cost overruns or project cancellations could still pressure gross margin and revenue timing., Margin-normalization risk: gross margin declined 194bp YoY to 68.8%. Although SG&A discipline lifted operating margin in Q1, further wage inflation, hiring, subcontractor costs or more complex implementation projects could reverse the favorable operating-leverage effect., IT-industry risk: customer demand can be affected by delays in financial-institution system investments, changes in regulatory or cybersecurity requirements, and competition for skilled software engineers..
Financial risks include Property concentration: PPE represents 54.1% of total assets, including ¥2.416bn of buildings and ¥1.997bn of land. This is not a leverage risk given the net-cash-rich balance sheet, but it lowers overall asset turnover and exposes value to real-estate utilization and valuation considerations., Non-recurring earnings contribution: the ¥44.5m gain on sale of fixed assets increased profit before tax and supported the reported net-income growth rate. This gain is not part of recurring operating profitability., Working-capital funding mix: accounts payable fell 49.4% YoY, reducing supplier financing, although the impact is readily absorbed by the company's substantial cash balance..
Key concerns include The annualized 21.5% ROE is strong, but it should be assessed alongside the 33.7% net margin and the contribution from the non-recurring asset-sale gain., Full-year guidance implies pronounced deceleration from Q1 operating-income growth, making the timing of planned expenses and project profitability important., High WIP concentration requires monitoring because it is directly linked to implementation progress, delivery acceptance and potential margin risk..
Investment Implications
Key takeaways include Q1 operating performance was strong: revenue grew 15.5% YoY and operating income grew 19.0% YoY., Operating margin reached 45.3%, up 134bp YoY, as limited SG&A growth outweighed a 194bp gross-margin decline., The capital structure is exceptionally conservative, with a 351.1% current ratio, 0.15x debt-to-equity and 87.2% equity ratio., Q1 operating-income progress of 33.5% is ahead of the standard 25% first-quarter pace relative to full-year guidance., Reported net income included a ¥44.5m gain on sale of non-current assets and should be separated from recurring profit trends..
Metrics to watch include Gross margin and operating margin, particularly whether project costs and staffing expenses lead to the guidance-implied margin normalization., Work in process balance and project completion trends., Revenue and operating-income progress against the ¥4.100bn and ¥1.540bn full-year forecasts., Accounts receivable collection and accounts payable movements., Utilization and returns associated with the ¥4.436bn PPE base..
Regarding relative positioning, The company combines unusually high profitability for an IT services-oriented business with a net-cash-rich, low-leverage balance sheet. Its annualized ROE is driven by margins rather than financial leverage, which is structurally favorable, although the sizable fixed-asset base restrains asset turnover and reported Q1 net income benefited from a non-recurring gain.