Collabos Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥885M
• Operating Income: ¥58M
• Net Income: ¥56M
• EPS: ¥12.16

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

Verdict: Solid underlying profitability improvement despite top-line contraction and a one-time item distorting PBT and net profit optics. Revenue declined 10.0% YoY to 8.85, but operating income rose 59.7% YoY to 0.58 as cost discipline and other operating items offset weaker sales. Gross profit was 3.43 with a 38.7% margin, and SG&A was 3.07, implying a leaner cost base relative to revenue. Operating margin expanded to 6.6% from roughly 3.7% a year ago, an estimated improvement of about 287 bps. Ordinary income increased 70.4% YoY to 0.58, with non-operating items netting to a small loss (-0.02). Profit before tax printed at 1.00, suggesting approximately 0.42 of extraordinary gains (not itemized), which lifted PBT relative to ordinary income. Despite stronger operating profit, net income fell 13.0% YoY to 0.56, implying margin compression at the bottom line to 6.3% from about 6.6% previously (roughly 22 bps compression) due to tax effects and the mismatch between ordinary profit and reported PBT. Earnings quality was sound: OCF of 0.64 exceeded net income (OCF/NI 1.15x), indicating cash conversion is healthy. Liquidity is very strong with a current ratio of 491% and net cash of roughly 12.47 (cash 13.07 minus total interest-bearing debt ~0.60), reducing financial risk. Interest coverage is robust at 21.35x, and leverage is low (D/E 0.34x), positioning the company defensively amid revenue softness. Asset turnover remains modest (0.519), keeping ROE at a subdued 4.2% despite margin gains. The quarter also shows reliance on other operating items to bridge from gross profit to operating income (about 0.22 of net other operating income), a lever to monitor for sustainability. Cash discipline extends to capex, which was minimal at 0.02, enabling an estimated proxy FCF near 0.62. Financing outflows of -0.89 include share repurchases (-0.06) and likely debt or distribution-related cash out, though dividends were unreported. Looking forward, the key is stabilizing revenue while maintaining SG&A discipline; if sales re-accelerate, operating leverage could lift ROE above current levels. Absent clarity on the extraordinary gain and dividends, we treat the improved operating profit as the core positive and the net income decline as optics-driven rather than a deterioration in fundamentals.

Profitability Analysis

ROE decomposition (DuPont): ROE 4.2% = Net margin 6.3% × Asset turnover 0.519 × Financial leverage 1.29x. The biggest driver of change appears to be margin improvement at the operating/ordinary level (operating margin up ~287 bps YoY), while asset turnover remains modest and leverage stays conservative. Operating income expansion was achieved through SG&A control and positive other operating items (~0.22), offsetting the 10% revenue decline. However, the bottom-line net margin slipped about 22 bps YoY due to tax and one-time item effects, muting ROE improvement. Sustainability: cost discipline is repeatable, but the contribution from other operating items and any extraordinary gains are likely non-recurring; sustained ROE uplift requires revenue stabilization or higher asset turnover. Watchpoints: SG&A grew slower than revenue (beneficial), but with revenue down, any catch-up in personnel or sales expenses could compress margins; also, reliance on non-core operating gains introduces variability.

Growth Assessment

Revenue declined 10.0% YoY to 8.85, indicating soft demand or customer downsizing in the period. Despite this, operating income rose 59.7% YoY to 0.58, demonstrating positive operating leverage from cost control and other operating income. Gross margin held at 38.7%; the swing from gross profit (3.43) and SG&A (3.07) to operating profit (0.58) implies roughly 0.22 of other operating income, cushioning profitability. Ordinary income margin improved to ~6.6% from ~3.5% YoY, but net margin slipped to 6.3% from ~6.6% on tax and extraordinary effects. EBITDA was 1.09 (12.4% margin), showing adequate operating cash capacity in a down-revenue quarter. With OCF at 0.64 (OCF margin ~7.2%), cash generation kept pace with earnings, supporting reinvestment or distributions. Outlook: near-term growth hinges on re-accelerating sales (e.g., new logo wins, upsells, churn control) while preserving SG&A efficiency. If revenue stabilizes, current cost structure could support further operating margin gains; if revenue softness persists, margin resilience may diminish as fixed costs bite. Key unknowns include the sustainability of other operating income and the absence of detailed R&D/SG&A sub-breakdowns to judge investment intensity for future growth.

Financial Health

Liquidity is very strong: current ratio 490.9% and quick ratio 490.9% (no inventory reported), with working capital of 12.05. No warning triggers (Current Ratio >> 1.0; D/E 0.34x well below 2.0). Balance sheet is cash-rich (cash 13.07) versus low interest-bearing debt (~0.60), yielding net cash of ~12.47. Equity/asset ratio is robust (equity 13.23 / assets 17.05 ≈ 77.6%), indicating high solvency. Maturity mismatch risk appears low: current assets of 15.13 comfortably exceed current liabilities of 3.08, and cash alone exceeds all liabilities. Interest coverage is strong at 21.35x, reducing refinancing risk. No off-balance sheet obligations were reported; data limitations mean guarantees/leases may exist but are unreported here.

Cash Flow Quality

OCF/Net income is 1.15x (>1.0), indicating good cash conversion. With capex at 0.02, a proxy FCF of ~0.62 (OCF - capex) suggests capacity to fund shareholder returns and maintain the asset base; note total FCF is not fully disclosed due to incomplete investing CF details. Working capital appears well-managed given positive OCF in a down-revenue quarter; no evident signs of aggressive working capital release (e.g., unusual payables build) from the disclosed line items. Financing CF of -0.89 includes share repurchases (-0.06) and likely debt servicing or distributions; dividends were unreported, limiting full coverage analysis. Overall earnings quality is solid, with cash flow supporting reported profits.

Dividend Sustainability

Dividend amounts and payout ratio are unreported, so a formal assessment is not calculable. Cash generation is supportive: proxy FCF of ~0.62 against a net cash position of ~12.47 indicates ample capacity for moderate dividends if policy allows. Retained earnings of 7.54 and conservative leverage further support potential distributions. Absent explicit DPS guidance, we assume a conservative stance: dividends (if any) appear serviceable from OCF with minimal capex needs. Sustainability will hinge on maintaining positive OCF and avoiding reliance on one-time gains.

Risk Assessment

Business Risks:

• Top-line contraction (-10% YoY) signaling demand softness or elevated churn.
• Dependence on other operating income (~0.22) to bridge to operating profit, which may not recur.
• Potential pricing pressure and competition in cloud/call-center software markets.
• Limited scale risk: small revenue base heightens sensitivity to customer wins/losses.
• Execution risk in cost control if sales reaccelerate and investments in growth (sales/R&D) must rise.

Financial Risks:

• Extraordinary gain influence on PBT (~0.42) obscures underlying earnings trajectory.
• Tax rate variability (effective ~34.7%) can sway net income despite stable operations.
• Financing outflow (-0.89) not fully broken out; if includes debt repayment plus distributions, near-term cash use could be lumpy (though net cash is ample).

Key Concerns:

• Sustainability of margin gains with declining revenue.
• Lack of detailed SG&A and R&D disclosure limits visibility on investment intensity and operating leverage.
• Unreported dividend details constrain assessment of shareholder return policy and cash commitments.

Investment Implications

Key Takeaways:

• Core operations improved: operating income +59.7% YoY despite -10% revenue, with operating margin up ~287 bps.
• Net income decline (-13% YoY) is driven by tax/extraordinary effects, not operating deterioration.
• Balance sheet strength (net cash ~12.47; equity ratio ~78%) provides resilience and optionality.
• Cash conversion is healthy (OCF/NI 1.15x) with minimal capex needs, supporting potential distributions.
• Visibility risk from one-time items and limited cost breakdown warrants cautious interpretation of PBT/NI.

Metrics to Watch:

• Revenue trajectory (sequential growth, churn, and upsell metrics if disclosed).
• Operating margin sustainability and reliance on other operating income.
• OCF/NI ratio and working capital movements (receivables and payables).
• Extraordinary gains/losses and their recurrence.
• Shareholder return policy (DPS, buybacks) and financing cash flows detail.

Relative Positioning: Within small-cap software/service peers, the company exhibits superior balance sheet strength and decent cash conversion, but lags on ROE (4.2%) due to modest asset turnover and conservative leverage; near-term reacceleration of sales is the pivotal differentiator for closing the ROE gap.

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