PR TIMES Corporation FY2026 FY Earnings Report

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Executive Summary

The Company, whose core business is the “PR TIMES” press release distribution service, posted results in which significant revenue growth, combined with the effects of cost controls, led to a pronounced operating leverage effect. Revenue was ¥95.5B (+19.3% YoY), Operating Income was ¥36.2B (+93.0%), and Ordinary Income was ¥36.1B (+92.8%). Net Income (consolidated net income for the period) was ¥22.8B (+101.1%), while Net Income Attributable to Owners of the Parent was ¥24.0B (+114.3%, EPS ¥177.73). The primary reason profit growth significantly outpaced revenue growth was that SG&A expenses declined YoY despite higher revenue.

Factors Affecting Financial Performance

【Revenue】Revenue was ¥95.5B, representing a +19.3% YoY increase. The core press release distribution business accounted for ¥85.9B (+17.4% YoY, approximately 90% of total revenue) and drove growth, while the “Other” business, including system development and SNS marketing support, also posted strong growth of ¥12.2B (+39.3% YoY).

【Profitability】Operating Income increased significantly to ¥36.2B (+93.0% YoY), and the Operating Margin reached 38.0% (as reported by the data source). SG&A expenses were ¥44.3B, down from ¥48.4B in the previous year; the simultaneous progress in revenue growth and cost controls was the primary driver of operating leverage. Ordinary Income of ¥36.1B was almost at the same level as Operating Income, indicating a limited impact from non-operating income and expenses. Profit Before Tax of ¥34.9B represented Ordinary Income less ¥1.2B in extraordinary losses, including impairment losses on investment securities. After deducting income taxes and other taxes of ¥11.0B (an effective tax rate of approximately 31.4%), Net Income Attributable to Owners of the Parent was ¥24.0B (+114.3% YoY). In conclusion, the Company achieved both revenue and profit growth.

Segment Analysis

The core press release distribution business generated revenue of ¥85.9B (+17.4% YoY) and segment profit of ¥34.4B (+83.3% YoY), with a margin of 40.0%, driving the majority of total Company profit. The “Other” businesses (system development business and SNS marketing support business) generated revenue of ¥12.2B (+39.3% YoY) and profit of ¥1.9B (a sharp increase from ¥0.03B in the previous year), with a margin of 15.3%. Since the core business has a significantly higher margin than the “Other” businesses, it should be noted that a future increase in the revenue contribution of the “Other” businesses could dilute the overall Company margin.

Key Financial Indicators

【Profitability】The Operating Margin was 38.0%, while the Net Profit Margin, based on income attributable to owners of the parent, was 25.1%; both improved significantly from the previous year. ROE was 24.6%, primarily due to margin expansion accompanying revenue growth. 【Cash Flow Quality】Operating Cash Flow (OCF) was ¥34.1B, approximately 1.4 times Net Income Attributable to Owners of the Parent of ¥24.0B, indicating strong cash support for reported earnings. 【Investment Efficiency】Capital expenditures were ¥0.3B, below depreciation and amortization of ¥2.2B, indicating restrained investment in property, plant and equipment. 【Financial Soundness】The Equity Ratio was 80.1%, while cash and deposits of ¥83.1B accounted for approximately 71.8% of total assets of ¥115.8B. With current liabilities of ¥23.1B against current assets of ¥96.1B, the Company maintains substantial liquidity.

Cash Flow Analysis

Operating Cash Flow was ¥34.1B, an increase of +149.1% from ¥13.7B in the previous year. In addition to the increase in net income, the increase in contract liabilities (+¥0.9B, reflecting the accumulation of advance receipts) contributed positively, while the increase in trade receivables (-¥1.4B) and income tax payments (-¥6.1B) were negative factors. Investing Cash Flow was -¥5.7B, with outflows increasing from -¥3.1B in the previous year due mainly to investment activities involving the payment of leasehold deposits and guarantee deposits. Financing Cash Flow was -¥1.4B, primarily reflecting dividend payments, while share repurchases were minimal. As a result, Free Cash Flow was ¥28.4B, substantially exceeding dividend payments of ¥1.4B and capital expenditures of ¥0.3B, and cash and cash equivalents accumulated to ¥83.1B at the end of the period.

Earnings Quality

Non-operating income of ¥0.1B and non-operating expenses of ¥0.3B were both immaterial at less than 1% of revenue. Since the difference between Ordinary Income and Operating Income was negligible, the majority of earnings was generated by the core business. The ¥1.2B in extraordinary losses was a temporary factor primarily attributable to impairment losses on investment securities, and its impact on Profit Before Tax of ¥34.9B was limited to the 3% range. Comprehensive income was ¥24.0B, almost equal to Net Income Attributable to Owners of the Parent of ¥24.0B. Since changes in the valuation difference on other securities were minimal, the divergence between net income and comprehensive income was extremely small. Including the fact that OCF was approximately 1.4 times Net Income Attributable to Owners of the Parent, the cash conversion and quality of earnings can be assessed as strong.

Earnings Forecast and Guidance

The Company’s forecast for the next fiscal year is revenue of ¥108.4B (+13.6% YoY), Operating Income of ¥32.5B (-10.3% YoY), Ordinary Income of ¥32.4B (-10.3% YoY), and EPS of ¥162.86. The expected Operating Margin is approximately 30.0%, representing an anticipated normalization of approximately 800bp from 38.0% in the current fiscal year. While revenue growth is expected to continue, the key factor in evaluating the trend in profitability from the next fiscal year onward will be the extent to which margin adjustments resulting from renewed investment and changes in the business mix are incorporated into the outlook.

Shareholder Returns

The dividend for the current fiscal year consisted solely of a year-end dividend of ¥13.8 (with an interim dividend of ¥0), resulting in a Payout Ratio of 12.4%. Since no dividend was paid in the previous fiscal year, the Company effectively began paying dividends in the current fiscal year. Share repurchases amounted to only ¥0.03B and were minimal; substantive shareholder returns were centered on dividends. Free Cash Flow of ¥28.4B substantially exceeded dividend payments of ¥1.4B, and no constraints on the capacity for shareholder returns are apparent. The dividend forecast for the next fiscal year has been disclosed as ¥0.00.

Risk Factors

1. Margin dilution due to changes in the business mix: The “Other” businesses, with a margin of 15.3%, are growing at a higher rate (+39.3% versus +17.4%) than the core business, which has a margin of 40.0%. If the revenue contribution of the “Other” businesses continues to rise, this could place downward pressure on the overall Company margin.

2. Valuation fluctuations in investment securities: The Company recorded ¥1.2B in extraordinary losses, including impairment losses on investment securities, in the current fiscal year. This amount was equivalent to approximately 3% of Profit Before Tax. Changes in the fair value of financial assets may continue to affect earnings.

3. Transition toward margin normalization in the next fiscal year: The Company forecasts a decline in the Operating Margin from 38.0% in the current fiscal year to approximately 30.0%. Quarterly progress must be monitored to assess the actual impact of front-loaded investment and changes in the business mix on profitability.

Industry Benchmark (For Reference; Compiled by the Company)

Profitability and Returns

Both the Operating Margin and Net Profit Margin significantly exceeded the industry median, placing the Company among the more profitable companies in the IT and communications sector.

Growth and Capital Efficiency

The revenue growth rate also exceeded the industry median, but was close to the upper end of the IQR (20.2%) and was not an exceptionally high outlier.

※Source: Compiled by the Company

Key Takeaways from the Financial Results

1. The Operating Margin of 38.0% and ROE of 24.6% both significantly exceeded the industry median. The key feature of the current fiscal year’s results was high profitability driven by both revenue growth and SG&A controls.

2. OCF was ¥34.1B, approximately 1.4 times Net Income Attributable to Owners of the Parent, while Free Cash Flow of ¥28.4B was substantially above dividends and capital expenditures, indicating strong cash support for reported earnings.

3. The Company’s forecast for the next fiscal year anticipates continued revenue growth and an approximately 800bp decline in the Operating Margin (from 38.0% to an expected 30.0%). The impact of front-loaded investment and changes in the business mix on profitability will be a key area to monitor.

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This report is an earnings analysis document automatically generated by AI through analysis of XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own discretion and responsibility, with consultation with a professional advisor as necessary.

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