I'LL INC FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥5.06B
• Operating Income: ¥1.32B
• Net Income: ¥746M
• EPS: ¥36.57

Income Statement

Balance Sheet

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

For FY2026 Q1, 株式会社アイル delivered strong top- and bottom-line growth with clear operating leverage. Revenue was ¥5,064 million, up 11.3% YoY, while operating income rose 23.4% YoY to ¥1,325 million, implying good cost discipline and favorable mix. Gross profit of ¥2,485.9 million translates to a robust gross margin of 49.1%, supporting a high operating margin of roughly 26.2%. Ordinary income slightly exceeded operating income (¥1,336 million vs. ¥1,325 million), indicating modest net non-operating gains. Net income reached ¥914 million, up 22.7% YoY, with an implied effective tax rate of approximately 26.7% (derived from net income and income tax), despite the data field showing 0.0% due to non-disclosure. DuPont decomposition points to a net margin of 18.05%, asset turnover of 0.314x, and financial leverage of 1.42x, resulting in an ROE of 8.06% for the quarter; annualization would be higher but should be treated cautiously given potential seasonality. The balance sheet is conservative with total assets of ¥16,102 million and equity of ¥11,344 million, implying an equity ratio near 70.5% (despite the reported 0.0% field being undisclosed) and a debt-to-equity ratio of 0.40x. Liquidity appears very strong with a current ratio of about 5.05x and working capital of ¥10,598 million, underpinned by large current assets of ¥13,216 million. Interest burden is negligible (¥0.22 million), yielding an extraordinarily high interest coverage of over 6,000x. Cash flow statements were not disclosed this quarter (zeros indicate unreported), so operating cash conversion and free cash flow (FCF) cannot be assessed. Depreciation and EBITDA were also not disclosed; hence, EBITDA metrics shown as zero are not meaningful. Dividend data were not disclosed for the quarter (DPS and payout shown as zero represent undisclosed values), so dividend sustainability must be inferred from earnings strength and balance sheet conservatism rather than cash distributions. Overall, the quarter evidences strong profitability, accelerating operating leverage, and ample financial flexibility, but the lack of cash flow disclosure limits visibility on earnings quality and FCF conversion.

Profitability Analysis

ROE (DuPont): Net profit margin 18.05% × Asset turnover 0.314 × Financial leverage 1.42 ≈ 8.06% for the quarter. The operating margin is approximately 26.2% (¥1,325m / ¥5,064m), indicating efficient cost structure and favorable revenue mix. Gross margin at 49.1% is strong, providing ample room to fund SG&A and still expand operating profit. Operating leverage is evident: revenue grew 11.3% YoY while operating income grew 23.4% YoY, yielding a degree of operating leverage of ~2.1x. Ordinary income slightly above operating income suggests minor net non-operating positives; interest expense is de minimis. The implied effective tax rate is about 26.7% (¥333.5m / (¥914.0m + ¥333.5m)), consistent with a normalized tax burden in Japan. EBITDA and D&A were not disclosed, so EBITDA margin and non-cash cost intensity cannot be evaluated.

Growth Assessment

Revenue growth of 11.3% YoY indicates healthy demand momentum to start the fiscal year. Profit growth outpaced sales (OP +23.4% YoY; NI +22.7% YoY), pointing to mix improvement and/or operating scale benefits. Margin expansion from gross to operating levels suggests disciplined SG&A and potentially higher-value offerings or favorable utilization. Sustainability of growth will hinge on order intake, retention, and pipeline visibility; these were not disclosed. Ordinary income tracking above operating income implies limited reliance on financial income for growth. With asset turnover at 0.314x for the quarter (implied ~1.26x annualized, subject to seasonality), growth appears supported by asset efficiency. Outlook: absent guidance and cash flow data, the near-term trajectory appears constructive based on margin resilience and leverage to revenue, but confirmation via subsequent quarters’ bookings, backlog, and cash conversion will be important.

Financial Health

Liquidity is very strong: current assets ¥13,216m vs. current liabilities ¥2,618m, yielding a current ratio of ~5.05x and working capital of ¥10,598m. Quick ratio equals current ratio due to inventories not being disclosed; thus, quick ratio should be viewed as approximate. Solvency metrics are conservative: total liabilities ¥4,482m vs. equity ¥11,344m yields D/E of ~0.40x. Implied equity ratio is ~70.5% (¥11,344m / ¥16,102m), despite the reported equity ratio field being undisclosed at 0.0%. Interest expense is minimal (¥0.22m), translating to interest coverage >6,000x, indicating negligible financial risk from leverage. Overall capital structure provides ample flexibility to absorb shocks or invest for growth.

Cash Flow Quality

Cash flow statements (OCF, ICF, FCF) were not disclosed for the quarter; consequently, OCF/Net income and FCF cannot be evaluated. Earnings quality assessment is therefore limited to accrual-based metrics. Working capital appears ample given high current assets, but without a breakdown (receivables, contract assets, etc.) and cash flow data, we cannot assess collection efficiency or cash conversion cycle. Depreciation and amortization were not disclosed, so the non-cash component of earnings cannot be quantified. Key watchpoints include OCF alignment with net income, receivables days, and capitalized development or equipment spend once disclosed.

Dividend Sustainability

Dividend data (DPS, payout, and FCF coverage) were not disclosed this quarter; values shown as zero reflect non-disclosure. On an earnings basis, coverage capacity appears solid given net margin of 18.05% and strong balance sheet, but the absence of OCF/FCF data prevents assessment of cash coverage. Policy outlook cannot be inferred from the provided data. Future evaluation should incorporate disclosed DPS, payout ratios versus EPS, and FCF coverage once cash flows are available.

Risk Assessment

Business Risks:

• Potential demand cyclicality or seasonality affecting quarterly asset turnover and margins.
• Execution risk in scaling operations while maintaining high gross and operating margins.
• Customer concentration or project concentration risk (not disclosed).
• Human capital constraints and wage inflation impacting SG&A and delivery capacity.
• Technology/product mix shifts that could pressure gross margin.

Financial Risks:

• Limited visibility on cash generation due to undisclosed cash flow statements.
• Working capital intensity risk if receivables or contract assets expand (composition not disclosed).
• Tax rate variability; implied ETR ~26.7% may fluctuate with items below operating income.
• Potential off-balance commitments or lease obligations not visible in the summary data.

Key Concerns:

• Absence of OCF/FCF data limits assessment of earnings-to-cash conversion.
• EBITDA and D&A undisclosed, constraining analysis of non-cash earnings quality and reinvestment needs.
• Dividend policy and cash return stance not visible from current disclosure.

Investment Implications

Key Takeaways:

• Strong start to FY2026: revenue +11.3% YoY with outsized operating income growth (+23.4% YoY).
• High profitability profile sustained: gross margin 49.1% and operating margin ~26.2%.
• Operating leverage evident (degree ~2.1x), suggesting good cost control and scale benefits.
• Balance sheet conservative with implied equity ratio ~70.5% and D/E ~0.40x; liquidity very strong.
• Non-operating impact modest and interest burden negligible.
• Cash flow non-disclosure is the main gap to confirm sustainability and capital return capacity.

Metrics to Watch:

• OCF and FCF once disclosed; OCF/Net income ratio target ≥1.0 over time.
• Gross and operating margin trajectory, particularly SG&A ratio to sales.
• Receivables days and contract assets to assess working capital discipline.
• Order intake/backlog or recurring revenue indicators for growth durability.
• Effective tax rate stability relative to ~26–27% implied this quarter.
• Capital expenditure and D&A once disclosed to gauge reinvestment needs.

Relative Positioning: Based on reported margins, growth, and balance sheet strength, the company appears positioned as a high-margin, low-leverage operator within its peer set; however, the absence of cash flow disclosure precludes a definitive view on cash conversion relative to peers.

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