UNIRITA Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥5.96B
• Operating Income: ¥459M
• Net Income: ¥290M
• EPS: ¥47.04

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Unirita (38000) reported FY2026 Q2 consolidated results under JGAAP with steady topline growth and notable profit improvement. Revenue was 5,962 million yen, up 3.7% year over year, indicating modest demand expansion or improved pricing/mix in its software/services portfolio. Gross profit of 3,240 million yen implies a strong gross margin of 54.3%, consistent with a high-value software/services model. Operating income rose 24.4% YoY to 459 million yen, lifting operating margin to approximately 7.7%, suggesting improved operating efficiency and positive operating leverage. Ordinary income reached 609 million yen, ahead of operating income, indicating material non-operating gains (e.g., interest/dividend income or investment-related gains) supporting total profitability. Net income was 357 million yen, up 23.1% YoY, for a net margin of 6.0%. DuPont analysis shows ROE of 2.93%, decomposed into a net margin of 5.99%, asset turnover of 0.376x, and financial leverage of 1.30x, pointing to low leverage and moderate capital intensity restraining ROE. Liquidity is very strong, with current assets of 11,436 million yen versus current liabilities of 3,097 million yen, yielding a current ratio of about 369%. The balance sheet is conservative: total liabilities of 3,394 million yen vs. equity of 12,193 million yen implies a debt-to-equity ratio around 0.28x and an implied equity ratio of roughly 77% (derived from reported assets and equity). Operating cash flow was 74 million yen, which is low relative to net income (OCF/NI ~0.21), pointing to working capital outflows or timing effects in the half-year. EBITDA was 608 million yen (10.2% margin), showing healthy operating cash earnings before non-cash charges. Effective tax rate based on disclosed figures is estimated at ~38% (215.7 million yen tax on ~572.7 million yen pre-tax), higher than the placeholder 0.0% shown in calculated metrics. Financing cash outflow of 257 million yen suggests shareholder returns or debt service, though detailed breakdown is not disclosed here. Dividend and per-share balance sheet data are not disclosed in this dataset, limiting payout and per-share valuation analysis. Overall, Unirita exhibits solid profitability expansion on stable growth, a robust balance sheet, but weak cash conversion in the period that warrants monitoring for seasonality or collection timing.

Profitability Analysis

ROE decomposition indicates a 2.93% ROE driven by a 5.99% net margin, 0.376x asset turnover, and 1.30x financial leverage. The low financial leverage reflects a conservative capital structure, which caps ROE despite improved margins. Operating margin is approximately 7.7% (459 million yen operating income on 5,962 million yen revenue), up YoY alongside a 24.4% operating income increase versus 3.7% revenue growth, demonstrating operating leverage and cost discipline. Gross margin of 54.3% is strong and consistent with software/service economics, providing headroom for operating margin expansion as scale improves. EBITDA margin of 10.2% (608 million yen) indicates healthy cash earnings generation before working capital, but below ordinary income margin (10.2%) due to non-operating gains lifting ordinary income. The spread between operating and ordinary income (about 150 million yen) suggests reliance on non-operating items; sustainability of these gains should be evaluated. Net margin at 6.0% benefits from non-operating income but is moderated by an estimated effective tax rate around 38%. Overall margin quality is solid at the gross level, with room to translate gross profitability into higher operating margins through SG&A productivity gains.

Growth Assessment

Revenue growth of 3.7% YoY indicates steady but modest expansion, likely driven by existing client upsell and/or incremental new business rather than large-scale volume growth. Operating income grew 24.4% YoY, signaling improved cost structure, mix shift toward higher-margin offerings, or better utilization, indicating quality growth beyond simple scale effects. Ordinary income growth outpaced operating growth due to non-operating gains, which may not be recurring; core growth should be assessed primarily at the operating level. Net income increased 23.1% YoY, consistent with operating trend after taxes. With inventories of only 40 million yen, growth appears service/software-led rather than product inventory-driven, reducing supply chain risk. Asset turnover of 0.376x reflects capital-light but working-capital-sensitive operations typical of project-based or maintenance/recurring service businesses. Near-term outlook hinges on backlog/renewal health and the sustainability of operating margin gains; the current data supports cautious optimism on margins, with revenue growth remaining moderate.

Financial Health

Liquidity is strong: current assets 11,435.5 million yen vs. current liabilities 3,096.7 million yen yields a current ratio of ~3.69x and quick ratio ~3.68x (inventory negligible at 40 million yen). Solvency is conservative: total liabilities of 3,394.5 million yen and equity of 12,193 million yen imply a debt-to-equity ratio of ~0.28x. Based on reported assets (15,841 million yen) and equity, the implied equity ratio is approximately 76.9%, despite the placeholder 0.0% shown. Interest expense is not disclosed here (shown as 0), but low leverage suggests minimal interest burden. Working capital is ample at 8,338.8 million yen, supporting operational flexibility and resilience. Overall, the company appears well-capitalized with low financial risk.

Cash Flow Quality

OCF was 74.2 million yen versus net income of 357 million yen, yielding an OCF/NI ratio of ~0.21, indicating weak cash conversion in the half-year, likely due to receivables buildup or other working capital timing. EBITDA of 608 million yen indicates solid pre-working-capital earnings, so the OCF shortfall is likely working-capital driven rather than earnings quality deterioration. Investing cash flow is not disclosed here, preventing a robust free cash flow calculation; reported FCF of 0 is a placeholder. Financing cash outflow of 257.1 million yen suggests shareholder distributions or debt repayment in the period, but details are not provided. Given project-driven cash cycles in software/services, H1 cash conversion can be volatile; monitoring full-year collections and DSO is important.

Dividend Sustainability

Dividend per share and payout ratio are not disclosed in this dataset (placeholders shown as 0), limiting a direct payout analysis. Financing cash outflows of 257 million yen may reflect dividends or share repurchases, but the absence of a detailed breakdown prevents firm conclusions. EPS for the period is 47.04 yen; without disclosed annual DPS and investing outflows, free cash flow coverage of dividends cannot be assessed from the provided data. The strong balance sheet and substantial working capital provide capacity for shareholder returns, but sustainability depends on full-year OCF generation and capital allocation priorities. Policy outlook cannot be inferred from the provided figures alone; historical payout tendencies are not included in this dataset.

Risk Assessment

Business Risks:

• Dependence on enterprise IT spending; delays in client budgets can slow project starts and collections.
• Execution risk on project delivery affecting margins and cash conversion (receivables timing).
• Talent retention and wage inflation pressures in the IT services/software labor market.
• Potential mix shift or pricing pressure in maintenance/recurring contracts affecting gross margin.
• Reliance on non-operating gains to lift ordinary income, which may be non-recurring.
• Competition from larger SIers and cloud-native vendors impacting win rates and pricing.

Financial Risks:

• Weak OCF conversion in the period (OCF/NI ~0.21) pointing to working capital volatility.
• Limited disclosure on cash balances and investing cash flows, creating visibility gaps on true FCF.
• Potential increase in tax burden (estimated effective tax ~38%), constraining net margins.
• Concentration risk if a small number of large clients drive revenue (not disclosed here).

Key Concerns:

• Sustainability of operating margin improvement versus one-off cost controls.
• Non-operating income contribution to ordinary income and its repeatability.
• Cash collection and DSO trends required to validate earnings quality.

Investment Implications

Key Takeaways:

• Topline grew modestly (+3.7% YoY) while operating income rose strongly (+24.4% YoY), evidencing operating leverage.
• Gross margin remains high at 54.3%, supporting a path to higher operating margins with scale.
• ROE is modest at 2.93% due to low leverage and moderate asset turnover despite improved margins.
• Balance sheet is robust with implied equity ratio ~77% and current ratio ~3.7x, keeping financial risk low.
• Cash conversion was weak in H1 (OCF/NI ~0.21), requiring monitoring for seasonal recovery.
• Ordinary income exceeded operating income, indicating reliance on non-operating items in the period.

Metrics to Watch:

• Operating margin trajectory and SG&A-to-sales ratio in H2.
• OCF/NI and DSO/receivables trends to confirm cash conversion.
• Backlog, renewal rates, and recurring revenue mix to gauge revenue durability.
• Non-operating income components and their sustainability.
• Capex/intangible development outlays (when disclosed) to assess FCF.
• Equity ratio and leverage trends given potential capital returns.

Relative Positioning: Within Japan-listed software/services peers, Unirita exhibits above-average gross margins and a conservative balance sheet, but lower ROE due to low leverage and modest asset turnover; near-term differentiation hinges on sustaining operating margin gains and normalizing cash conversion.

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