| Metrics | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥21.6B | ¥20.6B | +4.7% |
| Operating Income | ¥7.7B | ¥7.5B | +2.2% |
| Ordinary Income | ¥7.8B | ¥7.5B | +2.8% |
| Net Income | ¥5.1B | ¥5.0B | +2.4% |
| ROE | 9.5% | 9.7% | - |
FY2026 Q3 standalone results delivered higher revenue and earnings: Revenue ¥21.6B (YoY +¥1.0B, +4.7%), Operating Income ¥7.7B (YoY +¥0.2B, +2.2%), Ordinary Income ¥7.8B (YoY +¥0.2B, +2.8%), and Net Income ¥5.1B (YoY +¥0.1B, +2.4%). Operating margin remained high at 35.6%, with a net margin of 23.7%, indicating steady progress toward full-year guidance of Revenue ¥31.2B (YoY +12.8%) and Operating Income ¥11.7B (YoY +10.6%). The company maintains ample liquidity with cash and deposits of ¥51.4B against total assets of ¥64.6B, and holds a robust financial base with an Equity Ratio of 83.8%.
[Profitability] ROE at 9.5% (slightly down from 9.7% a year earlier), Operating Margin 35.6%, and Net Margin 23.7% remain exceptionally high. A Gross Profit Margin of 64.3% indicates a highly value-added business model. [Cash Quality] Cash and deposits of ¥51.4B and short-term liability coverage of 5.4x reflect very high liquidity. A Current Ratio of 578.9% underpins rock-solid short-term solvency. [Investment Efficiency] Total Asset Turnover at 0.34x is low, with a 79.6% cash ratio within total assets weighing on asset efficiency. DuPont analysis shows the Net Margin of 23.7% as the main driver, while Total Asset Turnover of 0.34x and Financial Leverage of 1.19x are constraints. [Financial Soundness] Equity Ratio at 83.8% (improved from 82.0% a year earlier) and a Debt-to-Equity Ratio of 0.19x indicate very low financial risk. Current assets account for 85.7% with a strong cash position, and interest-bearing debt is limited.
Cash and deposits increased by ¥1.4B YoY to ¥51.4B, accounting for 79.6% of total assets. The earnings uptrend likely contributed to cash accumulation. In working capital, Accounts Payable decreased by ¥0.09B from ¥0.31B a year earlier to ¥0.22B (-29.8%), suggesting a shorter payment cycle or changes in procurement mix. Meanwhile, accrued expenses and other payables increased slightly to ¥2.6B, indicating SG&A-related liabilities are being managed appropriately. Against short-term liabilities of ¥9.6B, cash coverage is 5.4x, implying virtually no liquidity risk. Total assets increased by ¥1.9B from ¥62.7B to ¥64.6B, primarily due to cash build-up and retained earnings. Equity increased by ¥2.7B from ¥51.4B to ¥54.1B, with net assets steadily accumulating even after dividend payments.
With Ordinary Income at ¥7.8B and Operating Income at ¥7.7B, non-operating net gains are limited at approximately ¥0.1B. Non-operating income is presumed to consist mainly of financial income such as interest and dividends received, indicating that most recurring income is driven by core operations. Operating Margin of 35.6% and Net Margin of 23.7% are high, and the conversion from Operating Income to Net Income is about 66.4% (implied effective tax rate of approximately 33.8%), indicating an appropriate tax burden. A Gross Profit Margin of 64.3% highlights high value-added products/services, and SG&A of ¥6.2B is efficiently controlled at 28.7% of revenue. While Operating Cash Flow (OCF) is not disclosed, limiting direct assessment of earnings cash conversion, the steady accumulation of cash and deposits suggests good earnings quality.
[Position within Industry] (Reference information; company research) Profitability: An Operating Margin of 35.6% far exceeds the industry median of 6.4% and is well above the IQR upper bound of 13.5%, representing an exceptionally high level. The Net Margin of 23.7% is also about 5x the industry median of 4.8%, indicating standout profitability within the industry. ROE at 9.5% slightly exceeds the industry median of 7.3%, ranking in the upper tier of the IQR (0.9%–12.1%). Growth: Revenue growth of +4.7% is well below the industry median of 12.0%, placing the company in the low-growth group near the IQR lower bound of 2.0% within the industry. If the full-year forecast of +12.8% is achieved, growth is expected to recover to around the industry median. Soundness: The Equity Ratio of 83.8% is far above the industry median of 55.2% and even exceeds the IQR upper bound of 67.3%, reflecting an extremely conservative financial structure. The Current Ratio of 578.9% also indicates overwhelming liquidity, at roughly 278x the industry median of 2.08x. With a net cash position, interest-bearing debt is extremely limited. Efficiency: Return on Assets is calculated as Net Income ¥5.1B ÷ Total Assets ¥64.6B = approximately 7.9%, exceeding the industry median of 3.8%. However, Total Asset Turnover of 0.34x indicates depressed asset efficiency due to high cash holdings and is estimated to be low within the industry. *Industry: IT & Communications (N=68 companies), comparison set: 2025 Q3 results, source: company compilation
First, exceptionally high profitability (Operating Margin 35.6%, Net Margin 23.7%) stands out within the industry, demonstrating a highly value-added business model and competitive advantage. Second, while the strong liquidity position—with cash and deposits accounting for roughly 80% of total assets—ensures short-term financial stability, low asset efficiency with Total Asset Turnover at 0.34x poses a challenge to improving capital productivity; strategic capital allocation to growth investments, M&A, and enhanced shareholder returns will be a focus going forward. Third, the Revenue growth rate of +4.7%, below the industry median of 12.0%, warrants attention to order acceleration in Q4 to meet the full-year forecast of +12.8%, with progress on customer base expansion and product portfolio enhancement being key features observable from the results data.
This report is an automatically generated earnings analysis prepared by AI based on XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. The industry benchmarks are reference information compiled by our company based on publicly available financial data. Investment decisions are your own responsibility; consult a professional as needed.