| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥14.7B | ¥15.9B | -7.4% |
| Operating Income | ¥5.4B | ¥5.9B | -7.9% |
| Ordinary Income | ¥5.6B | ¥5.9B | -5.4% |
| Net Income | ¥4.0B | ¥4.3B | -6.3% |
| ROE | 6.3% | 6.5% | - |
For FY2026 Q1, Revenue was ¥14.7B (YoY -¥1.2B, -7.4%), Operating Income was ¥5.4B (YoY -¥0.5B, -7.9%), Ordinary Income was ¥5.6B (YoY -¥0.3B, -5.4%), and Quarterly Net Income attributable to owners of the parent was ¥4.0B (YoY -¥0.3B, -6.3%). The core Information Platform Business maintained stable growth with Revenue up +4.6%, but declines in the Reverse Engineering Business (-44.2%) and Consulting Business (-23.7%) weighed on consolidated results. Operating margin remained very high at 37.0% (prior year 37.2%), a modest decrease of -0.2pt. Gross profit margin improved to 66.5% (prior year 62.5%, +4.0pt), but SG&A ratio rose to 29.6% (prior year 25.3%, +4.3pt), worsening operating leverage. At the ordinary profit level, an increase in interest income of ¥0.1B provided support, narrowing the decline to -5.4%. Progress against the full year forecast (Revenue ¥61.5B, Operating Income ¥23.5B) is roughly on track with Revenue at 23.9% and Operating Income at 23.1%.
[Revenue] Revenue was ¥14.7B (YoY -7.4%), a decline. By segment, the Information Platform Business grew steadily to ¥9.9B (prior ¥9.5B, +4.6%), accounting for 67.5% of consolidated Revenue and continuing stable growth as the core business. Promotion Advertising Business was ¥0.4B (+27.9%), Recruitment Placement Business ¥0.4B (+77.5%), and Market Forecast Information Sales Business ¥0.7B (+2.9%)—all securing revenue increases. Conversely, Reverse Engineering Business declined substantially to ¥1.8B (prior ¥3.3B, -44.2%) and Consulting Business fell to ¥1.4B (prior ¥1.8B, -23.7%), with lower demand for project-type businesses dragging on consolidated top line. Automotive Fund Business contracted to ¥0.0B (-53.3%). Gross profit margin improved to 66.5% (prior 62.5%, +4.0pt), reflecting a shift to higher-margin products and efficiency gains.
[Profitability] Operating Income was ¥5.4B (YoY -7.9%), a decline. Despite improved gross profit margin, SG&A increased to ¥4.3B (prior ¥4.0B, +8.1%), raising the SG&A ratio to 29.6% (prior 25.3%, +4.3pt) and resulting in a slight decrease in operating margin to 37.0% (prior 37.2%). The main drivers of SG&A increase were higher salaries and allowances ¥1.7B (prior ¥1.6B), rent ¥0.4B (prior ¥0.3B), and provisions ¥0.4B (prior ¥0.3B), i.e., increases in fixed costs. By segment, Information Platform Business maintained a high margin of 45.7% (prior 47.6%), Promotion Advertising Business was 69.5% (prior 83.4%), and Market Forecast Information Sales Business improved to 34.8% (prior 31.9%). However, Reverse Engineering Business deteriorated to 2.8% (prior 9.6%), and Consulting Business fell to 24.9% (prior 33.5%). Ordinary Income was ¥5.6B (YoY -5.4%); non-operating income of ¥0.2B (including ¥0.1B interest income) helped narrow the decline. No extraordinary items were recorded; profit before tax was ¥5.6B, from which income taxes of ¥1.6B (effective tax rate 28.8%) were deducted, resulting in Quarterly Net Income attributable to owners of the parent of ¥4.0B (YoY -6.3%). Net income margin edged up to 27.2% (prior 26.9%). No temporary factors were identified; the decline in profit was driven by core operations.
Information Platform Business: Revenue ¥9.9B (YoY +4.6%), Operating Income ¥4.5B (YoY +0.3%), margin 45.7% (prior 47.6%). It remains the overwhelmingly dominant core business, accounting for 83.5% of consolidated Operating Income and continuing stable growth. Consulting Business: Revenue ¥1.4B (YoY -23.7%), Operating Income ¥0.3B (YoY -43.3%), margin 24.9% (prior 33.5%), with declining profitability. Reverse Engineering Business: Revenue ¥1.8B (YoY -44.2%), Operating Income ¥0.1B (YoY -83.6%), margin 2.8% (prior 9.6%), with utilization declines from weaker orders pressuring profits. Market Forecast Information Sales Business: Revenue ¥0.7B (YoY +2.9%), Operating Income ¥0.2B (YoY +12.2%), margin 34.8% (prior 31.9%), showing improvement. Promotion Advertising Business: Revenue ¥0.4B (YoY +27.9%), Operating Income ¥0.3B (YoY +6.5%), margin 69.5% (prior 83.4%), still high though down YoY. Recruitment Placement Business: Revenue ¥0.4B (YoY +77.5%), Operating Income ¥0.0B (YoY +157.3%), margin 6.4%, returning to profitability. Automotive Fund Business: Revenue ¥0.0B (YoY -53.3%), Operating Loss ¥0.0B (prior Operating Income ¥0.0B), turned to loss. Others: Revenue ¥0.0B, Operating Loss ¥0.0B, remaining in deficit.
[Profitability] Operating margin 37.0% (prior 37.2%, -0.2pt), Net margin 27.2% (prior 26.9%, +0.3pt) remain at very high levels. Gross profit margin improved significantly to 66.5% (prior 62.5%, +4.0pt), but this was offset by an increase in SG&A ratio to 29.6% (prior 25.3%, +4.3pt). ROE was 6.3% (prior 6.5%), a slight decline mainly due to a decrease in total asset turnover (0.172, prior 0.180); sales declined while total asset base was maintained, reducing efficiency. [Cash Quality] Accounts receivable increased to ¥3.7B (prior ¥2.9B, +27.1%), and DSO lengthened to 92 days, raising concerns over working capital efficiency. Inventories were sharply reduced to ¥0.3B (prior ¥0.6B, -57.3%), improving inventory turns. Advances received rose to ¥16.4B (prior ¥15.2B, +7.5%), indicating a healthy subscription base. [Investment Efficiency] Total assets ¥85.4B (prior ¥88.1B), of which investment securities ¥27.9B (composition ratio 32.7%) are held; the abundance of financial assets suppresses total asset turnover. Intangible assets are minor at ¥1.1B (composition ratio 1.3%), limiting impairment risk. [Financial Soundness] Equity Ratio 74.0% (prior 74.2%), Cash and Deposits ¥35.8B (prior ¥38.0B), effectively debt-free, and current ratio 187.7%, indicating very strong short-term liquidity. No interest-bearing debt confirmed; D/E ratio 0.35x (Liabilities ¥22.2B / Equity ¥63.2B) indicates low leverage.
Although detailed disclosure of Operating Cash Flow is not provided, balance sheet movements indicate cash dynamics: Cash and Deposits fell to ¥35.8B (prior ¥38.0B, -¥2.2B). Accounts receivable increased by ¥0.8B, delaying cash inflows, while inventories decreased by ¥0.3B, generating cash. Advances received increased by ¥1.1B, a short-term cash-in factor but representing future performance obligations. Accrued corporate taxes and similar decreased by ¥1.1B, suggesting tax payments and corresponding cash outflows. Investment securities slightly declined to ¥27.9B (prior ¥28.1B, -¥0.1B), with no large investment activity observed. Fixed assets slightly decreased to ¥44.0B (prior ¥45.1B), indicating a balance between depreciation and new investment. Deposits for guarantees decreased substantially to ¥1.8B (prior ¥2.9B, -¥1.1B), suggesting recovery of funds due to lease/contract renegotiations. In financing activities, treasury stock remained at ¥0.5B with no change, and no dividends were confirmed. Overall, prolonged DSO and high level of work-in-progress (of inventory, WIP ¥0.04B compressed but still high in composition) are remaining sources of uncertainty in cash conversion.
Operating Income ¥5.4B and Ordinary Income ¥5.6B, with the ¥0.2B difference primarily from non-operating income. Composition includes interest income ¥0.1B, dividend income ¥0.0B, and foreign exchange gains ¥0.0B, indicating limited ancillary income from financial assets; most profit is generated from core operations. Non-operating expenses were minimal at ¥0.0B; equity-method investment losses ¥0.0B were recorded but had negligible impact. No extraordinary items occurred; there are no temporary factors inflating profit. The difference between Net Income ¥4.0B and Ordinary Income ¥5.6B is ¥1.6B for income taxes, with an effective tax rate of 28.8% (Income taxes ¥1.6B / Profit before tax ¥5.6B), a reasonable level. Comprehensive income ¥4.1B versus Net Income ¥4.0B difference ¥0.1B relates to other comprehensive income—foreign currency translation adjustment +¥0.1B, valuation difference on available-for-sale securities -¥0.1B, and equity-method OCI share ¥0.0B—each valuation-related and having minor effect on earnings quality. Recurring earnings are concentrated in operating income, and earnings quality is assessed as high. From an accrual perspective, increases in accounts receivable and extended DSO indicate a widening timing gap between revenue recognition and cash collection, suggesting some divergence between reported profits and actual cash generation.
Full year forecast: Revenue ¥61.5B (YoY +10.4%), Operating Income ¥23.5B (YoY +12.1%), Ordinary Income ¥23.8B (YoY +10.9%), Net Income attributable to owners of the parent ¥16.6B. Q1 progress rates are Revenue 23.9% (¥14.7B/¥61.5B), Operating Income 23.1% (¥5.4B/¥23.5B), Ordinary Income 23.5% (¥5.6B/¥23.8B), Net Income 24.1% (¥4.0B/¥16.6B), broadly in line with a standard ~25% pace. No forecast revisions were made at Q1; company guidance remains unchanged. The full year assumes growth in both sales and profit, projecting recovery to a growth trajectory in H2 following Q1’s YoY declines. Given rising advances received (+7.5%) and stable Revenue growth in the core Information Platform Business (+4.6%), recovery in orders for project-type businesses (Reverse Engineering, Consulting) is key to achieving the full year targets.
No dividend was paid in Q1 (¥0), and no quarterly dividend is implemented. Full year dividend forecast is also ¥0, so no dividend plan is confirmed at present. Payout ratio against Quarterly Net Income attributable to owners of the parent (¥4.0B) is 0%. Treasury stock remains ¥0.5B (prior ¥0.5B) with no change and no share buybacks confirmed. Given Cash and Deposits ¥35.8B, an effectively debt-free strong balance sheet, and high Operating Margin of 37.0%, capacity for shareholder returns exists. No dividend policy guidance has been provided, and consideration of shareholder returns could be weighed against future growth investments (platform enhancement, new businesses).
Segment concentration risk: The Information Platform Business accounts for 67.5% of Revenue and 83.5% of Operating Income, indicating high concentration. If growth in this business slows, churn increases, or competitive price pressure intensifies, the impact on consolidated performance would be significant. The accumulation of Advances Received ¥16.4B suggests continuity, but ongoing monitoring of the customer base is necessary.
Revenue volatility of project-type businesses: As evidenced by large YoY declines in Reverse Engineering Business (Revenue -44.2%, Operating Income -83.6%) and Consulting Business (Revenue -23.7%, Operating Income -43.3%), project-type businesses are susceptible to demand fluctuations, order timing, and utilization rates, reducing revenue stability. With high fixed SG&A, large sales swings can worsen operating leverage and depress margins.
Working capital / cash collection risk: DSO of 92 days and Accounts Receivable growth of +27.1% indicate an expanded timing gap from revenue recognition to cash collection. A high proportion of WIP (despite overall Inventory decline) introduces risk that cash conversion may be delayed depending on inspection/acceptance timing. Advances Received accumulation is a short-term cash-in factor but may turn into future cash outflows as obligations are fulfilled; skillful working capital management will affect liquidity.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 37.0% | 6.2% (4.2%–17.2%) | +30.7pt |
| Net Margin | 27.2% | 2.8% (0.6%–11.9%) | +24.4pt |
Profitability substantially exceeds the industry median, indicating top-tier profit structure within the IT & Communications sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | -7.4% | 20.9% (12.5%–25.8%) | -28.3pt |
Growth rate is well below the industry median, with slowdown in project-type businesses creating near-term headwinds.
※ Source: Company compilation
The core Information Platform Business (67.5% of Revenue, 45.7% margin) showed stable Revenue growth (+4.6%) and accumulation of Advances Received (+7.5%), indicating a solid subscription base. Conversely, large declines in project-type businesses (Reverse Engineering -44.2%, Consulting -23.7%) suppressed consolidated growth; recovery in project orders is essential to meet full year forecasts. The exceptionally high Operating Margin of 37.0% (industry median 6.2%, +30.7pt) and Net Margin 27.2% (industry median 2.8%, +24.4pt) indicate sustained competitive advantage, while Revenue growth of -7.4% (industry median +20.9%, -28.3pt) reflects short-term headwinds.
Worsening working capital efficiency indicated by DSO 92 days and Accounts Receivable +27.1% introduces uncertainty in cash conversion. Inventories were compressed by -57.3%, but the presence of WIP means cash flows could swing depending on acceptance timing. Meanwhile, Cash ¥35.8B and an effectively debt-free balance sheet (Equity Ratio 74.0%, Current Ratio 187.7%) provide financial safety, limiting short-term liquidity risk. Preemptive SG&A increases (+8.1%) have worsened operating leverage, but if the core business maintains margins and project-type businesses recover, there is scope for profitability to expand again with returning revenue growth.
This report is an earnings analysis document automatically generated by AI analyzing XBRL earnings disclosure data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your own responsibility; please consult a professional advisor as needed.