| Metric | Current Period | Prior-Year Period | YoY |
|---|---|---|---|
| Revenue | ¥18.7B | ¥16.8B | +11.1% |
| Operating Income | ¥0.8B | ¥0.5B | +66.3% |
| Ordinary Income | ¥0.8B | ¥0.6B | +42.8% |
| Net Income | ¥0.6B | ¥0.3B | +68.1% |
| ROE | 3.1% | 1.9% | - |
Cumulative results for FY2026 Q3 were Revenue of ¥18.7B (¥16.8B in the prior-year period, +¥1.9B, +11.1%), Operating Income of ¥0.8B (¥0.5B, +¥0.3B, +66.3%), Ordinary Income of ¥0.8B (¥0.6B, +¥0.2B, +42.8%), and Net Income of ¥0.6B (¥0.3B, +¥0.3B), representing higher revenue and profit at all profit levels versus the prior year. While operating leverage supported margin improvement, a notable feature was Accounts Receivable increasing +500% from ¥1.75B in the prior-year period to ¥10.49B, with Days Sales Outstanding extending significantly to approximately 205 days.
[Profitability] ROE 3.0% (Net Income ¥0.6B ÷ Net Assets ¥18.4B), Operating Margin 4.2% (Operating Income ¥0.8B ÷ Revenue ¥18.7B, improved by +1.2pt from 3.0% in the prior-year period), Net Margin 3.0% (Net Income ¥0.6B ÷ Revenue ¥18.7B, improved by +1.0pt from 2.0% in the prior-year period). ROE decomposition: Net Margin 3.0%, Total Asset Turnover 0.83x, Financial Leverage 1.22x. ROIC 4.9%, indicating room for improvement in invested capital efficiency. [Cash Quality] Cash and Cash Equivalents ¥7.9B (down -¥5.6B from ¥13.5B in the prior-year period), with cash coverage of 2.1x against Short-term Liabilities of ¥3.7B. DSO is 205 days, a substantial extension, indicating deterioration in monetization efficiency of working capital. [Investment Efficiency] Total Asset Turnover 0.83x (Revenue ¥18.7B ÷ Total Assets ¥22.5B). [Financial Soundness] Equity Ratio 81.6% (Net Assets ¥18.4B ÷ Total Assets ¥22.5B), Current Ratio 508.6%, Debt-to-Equity Ratio 0.22x, reflecting very low financial leverage and a conservative capital structure.
Cash and deposits decreased by -¥5.6B (-41.7%) from ¥13.5B in the prior-year period to ¥7.9B, and funds did not build up despite higher operating profit. The main factor was deterioration in working capital due to Accounts Receivable increasing by +¥8.74B from ¥1.75B in the prior-year period to ¥10.49B. Accounts Payable increased from ¥0.24B to ¥0.85B (+¥0.61B), showing some improvement in capital efficiency via extended payment terms, but the offset effect is limited relative to the scale of the AR increase. Goodwill decreased from ¥0.33B to ¥0.21B (-¥0.12B), indicating impairment adjustments or amortization in progress. Cash coverage against Short-term Liabilities of ¥3.7B is maintained at 2.1x, and short-term liquidity remains sufficient; however, the sharp decline from approximately 5.6x cash coverage in the prior-year period indicates worsening working capital management. Assuming a planned dividend of ¥13.00, the total dividend is approximately ¥0.61B (assuming approximately 4.7 million shares outstanding), and the Payout Ratio is approximately 109%, implying dividends exceeding Net Income and elevating future cash outflow pressure.
With Ordinary Income at ¥0.8B and Operating Income at ¥0.8B, non-operating profit/loss is effectively marginal. At the Ordinary Income level, non-operating income such as interest income and subsidy income likely contributed, but a foreign exchange loss of ¥0.12B was recorded, with a negative impact from foreign currency transactions. The contribution of non-operating income to the earnings mix is limited, with the majority of profit generated from core operating activities. Due to the decline in cash balances and the sharp increase in Accounts Receivable, the cash backing of earnings has weakened. DSO of 205 days is extremely long, and the widening time lag between revenue recognition and cash collection necessitates attention to the quality of revenue recognition and collection risk. Comprehensive Income of ¥0.96B exceeds Net Income of ¥0.56B, with Other Comprehensive Income of +¥0.40B contributing; this is presumed to be mainly due to non-cash items such as foreign currency translation adjustments and valuation differences on available-for-sale securities.
[Position within Industry] (Reference Information, Our Research) Profitability: Operating Margin 4.2% (industry median 8.0%, -3.8pt), Net Margin 3.0% (industry median 5.6%, -2.6pt), both below industry standards. ROE 3.0% (industry median 8.2%, -5.2pt), with low capital efficiency. Estimated ROIC 4.9% (industry median 16.0%, -11.1pt), indicating significant room to improve returns on invested capital. Soundness: Equity Ratio 81.6% (industry median 59.5%, +22.1pt), very high, with Financial Leverage 1.22x (industry median 1.66x, -0.44x), indicating a conservative capital structure. Current Ratio 508.6% (industry median 213%, +295.6pt), with short-term payment capacity high within the industry, though the liquidity buffer is shrinking due to declining cash. Efficiency: Total Asset Turnover 0.83x (industry median 0.68x, +0.15x), above the industry average with good asset efficiency. DSO 205 days (industry median 60.53 days, +144.5 days), significantly extended, placing working capital efficiency at the lowest level in the industry by estimation. Days Payable Outstanding is approximately 16.6 days (estimate), below the industry median of 34.63 days, indicating room to utilize trade payables. Growth: Revenue growth rate +11.1% (industry median +10.5%, +0.6pt), in line with industry standards. EPS growth rate +68.1% (well above the industry median +30%), but sustainability is questionable given the low base and high Payout Ratio. Industry: IT & Communications (99 companies), Comparison target: FY2025 Q3 period, Source: Our compilation
This report is an earnings analysis document automatically generated by AI based on XBRL financial results summary data. It does not constitute a recommendation to invest in any specific security. The industry benchmarks are reference information compiled by our firm based on publicly available financial results data. Investment decisions are your own responsibility; please consult a professional as necessary.