CHIeru Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥4.65B
• Operating Income: ¥406M
• Net Income: ¥141M
• EPS: ¥30.45

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

Chieru Co., Ltd. (3933) reported FY2026 Q2 consolidated results under JGAAP with strong top-line expansion but mixed cash conversion. Revenue reached 4,650 million yen, up 84.6% YoY, indicating robust demand or significant project deliveries in the period. Operating income rose 73.4% YoY to 406 million yen, implying some margin compression relative to the sharp revenue growth. Ordinary income was 396 million yen, modestly below operating income due to small non-operating costs, including interest expense of 1.3 million yen. Net income increased 60.8% YoY to 227 million yen, with EPS of 30.45, confirming solid profit growth albeit lagging revenue momentum. Reported gross profit of 1,342 million yen implies a gross margin of 28.9%; however, the disclosed cost of sales and gross profit are arithmetically inconsistent with revenue, suggesting classification or disclosure differences—analysis proceeds using the non-zero figures as provided. EBITDA was 493 million yen with a margin of 10.6%, and interest coverage was very strong at 302.5x, highlighting low financial cost burden. DuPont decomposition yields a net margin of 4.88%, asset turnover of 0.426x, and financial leverage of 2.63x, producing an ROE of 5.47%. On the balance sheet, total assets were 10,925 million yen and equity 4,152 million yen, implying moderate leverage; current assets of 6,222 million yen vs. current liabilities of 4,202 million yen provide a current ratio of 148%. Operating cash flow was only 10.8 million yen, translating to OCF/Net income of 0.05, pointing to weak cash conversion in the half, likely due to working capital swings. Investing cash flow and cash balance were not disclosed in the XBRL (appear as zero), limiting free cash flow precision; the provided “FCF 0” should be read as unreported rather than zero. Dividend per share and payout ratio were also shown as zero (unreported), and share count/book value per share were not disclosed, constraining per-share balance sheet analysis. Overall, profitability improved in absolute terms with disciplined financing costs and adequate liquidity, but the quarter’s low operating cash flow and margin pressure vs. revenue growth suggest elevated execution and working capital risk. Data limitations (notably certain zeros indicating non-disclosure) necessitate caution in interpreting cash and equity ratio-related metrics.

Profitability Analysis

roe_decomposition: ROE 5.47% = Net margin 4.88% × Asset turnover 0.426 × Financial leverage 2.63. Net margin reflects modest after-tax profitability relative to sales; turnover indicates moderate asset intensity; leverage provides a moderate multiplier without excessive financial risk. margin_quality: Gross margin reported at 28.9% (1,341.7m/4,650.0m), but cost of sales disclosure (1,176.9m) does not reconcile with revenue, indicating classification/disclosure differences. Operating margin is 8.7% (406.0m/4,650.0m). EBITDA margin is 10.6%. Ordinary margin is 8.5% (396.0m/4,650.0m). Interest burden is negligible given interest expense of 1.3m and coverage of 302.5x. operating_leverage: Revenue grew 84.6% YoY while operating income grew 73.4% YoY, implying negative operating leverage this period (margin compression), likely from mix, pricing, project timing, or higher operating costs (e.g., SG&A, delivery/implementation costs) associated with growth.

Growth Assessment

revenue_sustainability: The 84.6% YoY surge suggests large project deliveries or cyclical procurement (possibly education sector-related) rather than purely run-rate growth. Sustainability will depend on order backlog, renewal rates, and the cadence of public-sector budgets. profit_quality: Net income grew 60.8% YoY, trailing revenue growth, indicating cost pressure or less favorable mix. The gap between earnings growth and cash generation (OCF/NI = 0.05) points to timing and working capital effects, which could normalize but warrant monitoring. outlook: With operating leverage not fully realized this half and strong top-line momentum, margin recovery in subsequent periods will hinge on delivery mix, cost control, and conversion of receivables. If working capital normalizes, cash conversion should improve; otherwise, growth may continue to be cash-absorbing.

Financial Health

liquidity: Current assets 6,222.1m vs. current liabilities 4,202.1m yield a current ratio of 148.1% and quick ratio of 148.1% (inventories unreported). Working capital is 2,020.0m, indicating adequate near-term liquidity despite weak OCF in the half. solvency: Total liabilities 6,773.6m vs. equity 4,152.0m imply a debt-to-equity ratio of 1.63x. Interest expense is minimal (1.3m) with coverage of 302.5x, suggesting low interest burden and manageable solvency risk. capital_structure: Financial leverage (assets/equity) is 2.63x, consistent with moderate gearing. The equity ratio is shown as 0.0% due to non-disclosure in XBRL and should not be interpreted as zero.

Cash Flow Quality

earnings_quality: OCF/Net income is 0.05 (10.8m/227.0m), indicating weak cash conversion in H1. This likely reflects receivables build or contract timing rather than fundamental profitability issues, but sustained weakness would raise quality concerns. fcf_analysis: Investing cash flow is unreported (0 placeholder), so precise FCF cannot be determined. With OCF of 10.8m and capex undisclosed, indicative FCF is uncertain; reported 'FCF 0' should be treated as not disclosed. working_capital: Given the large revenue increase, working capital likely absorbed cash (e.g., higher receivables/unbilled). Current assets significantly exceed current liabilities, but collection timing will be critical to future OCF normalization.

Dividend Sustainability

payout_ratio_assessment: Payout ratio is shown as 0.0% due to non-disclosure; EPS is 30.45. Without DPS, we cannot assess payout quantitatively. fcf_coverage: With OCF at 10.8m and FCF not disclosed, coverage of any dividend cannot be determined for this period. policy_outlook: Given growth investment needs and weak H1 cash conversion, a conservative dividend stance would be consistent with reinvestment; however, absence of disclosed DPS suggests no conclusion can be drawn from this dataset.

Risk Assessment

Business Risks:

• Revenue concentration and lumpiness from project-based deliveries or public-sector procurement cycles
• Margin pressure from product mix, pricing, and implementation costs during rapid scaling
• Execution risk in converting strong order flow into cash (receivables collection, delivery timing)
• Potential dependence on specific academic-year budget cycles impacting quarterly seasonality

Financial Risks:

• Weak operating cash flow versus earnings (OCF/NI 0.05) increasing reliance on working capital management
• Moderate leverage (D/E 1.63x) elevates sensitivity to cash flow volatility
• Disclosure gaps (cash balance, equity ratio, investing CF) limit visibility and monitoring

Key Concerns:

• Cash conversion shortfall despite strong earnings growth
• Operating margin compression relative to revenue growth
• Inconsistency between reported cost of sales and gross profit figures, complicating margin analysis

Investment Implications

Key Takeaways:

• Top-line growth is very strong (+84.6% YoY) but operating leverage was not fully realized (OP +73.4% YoY).
• Profitability is respectable (EBITDA margin 10.6%, operating margin 8.7%) with negligible interest burden.
• ROE of 5.47% is driven by modest net margin and moderate leverage; asset turnover is moderate.
• Liquidity is adequate (current ratio 148%) but cash generation is weak (OCF/NI 0.05) due to working capital.
• Data limitations (non-disclosed cash, FCF, equity ratio, DPS) constrain certain conclusions.

Metrics to Watch:

• Operating cash flow and receivables days to confirm cash conversion recovery
• Order backlog and renewal rates to assess sustainability of revenue growth
• Operating margin and gross margin trends as mix and scale evolve
• Capex and investing cash flows to finalize FCF assessment
• Leverage and interest coverage to ensure solvency remains comfortable

Relative Positioning: Compared to typical small/mid-cap TSE software/edtech peers, Chieru shows stronger near-term revenue growth with moderate profitability and superior interest coverage, but weaker interim cash conversion and more pronounced project-driven lumpiness.

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