| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥88.6B | ¥48.6B | +82.2% |
| Operating Income | ¥16.2B | ¥21.5B | -24.9% |
| Profit Before Tax | ¥15.0B | ¥20.5B | -26.9% |
| Net Income | ¥9.6B | ¥13.8B | -30.9% |
| ROE | 2.7% | 4.0% | - |
For FY2026 Q1, Revenue was ¥88.6B (YoY +¥40.0B, +82.2%), Operating Income was ¥16.2B (YoY -¥5.3B, -24.9%), Ordinary Income was ¥15.0B (YoY -¥5.5B, -27.0%), and quarterly Net Income attributable to owners of the parent was ¥9.4B (YoY -¥4.5B, -32.3%). Revenue increased for the third consecutive period with a CAGR of +31.7% showing continued high-growth trend, while Operating Income turned negative year-over-year for the first time in two periods. EPS was ¥30.12 (from ¥44.55 prior year, -32.4%); diluted EPS was ¥30.10. Historical trends show Revenue growth accelerating from 25.9% in the prior-year period to 82.2% this period, while Net Income margin fell substantially from 28.7% to 10.8%, highlighting a trade-off between growth and profitability.
[Revenue] Revenue of ¥88.6B represented a substantial YoY increase of +82.2%, maintaining three-period consecutive top-line growth. By segment, the AI Powered Worker Business grew to ¥31.9B, accounting for 36.0% of total and becoming the largest segment, expanding sharply from ¥4.5B prior year (+613.9%). AI Research & Solution Business was ¥30.0B (+20.4% YoY), and AI SaaS Business was ¥26.7B (+38.6% YoY), with all three segments achieving revenue increases. Revenue composition was balanced: AI Powered Worker Business 36.0%, AI Research & Solution Business 33.8%, AI SaaS Business 30.1%. Reporting segment redefinitions and internal management organizational changes were applied from this period; prior-year figures are restated for comparability. Cost of sales was ¥44.1B (cost of sales ratio 49.8%), and gross profit was ¥44.5B (gross margin 50.2%), remaining at a high level.
[Profitability] From gross profit of ¥44.5B, SG&A of ¥28.3B was deducted to yield segment profit of ¥16.2B, up from ¥10.2B prior year (+58.8%). However, Other Income dropped sharply from ¥11.5B prior year to ¥0.08B (-¥11.4B), resulting in Operating Income of ¥16.2B, down from ¥21.5B prior year (-24.9%). The prior-year “Other Income” of ¥11.5B appears to have been a one-off factor with substantial impact on Ordinary Income. Financial income was ¥0.2B and financial expenses ¥0.8B, yielding net finance cost of -¥0.6B; equity-method loss was -¥0.6B (worsened from -¥0.2B prior year). Profit Before Tax (ordinary/taxable base) was ¥15.0B, and after tax expense of ¥5.4B (effective tax rate 36.3%), quarterly Net Income was ¥9.6B (¥13.8B prior year, -30.9%). Net income attributable to owners of the parent was ¥9.4B, non-controlling interests ¥0.2B. The gap between Ordinary Income (¥15.0B) and Net Income (¥9.6B) is mainly due to heavy tax burden; Net Income / Profit Before Tax ratio remained at 63.6%. Historical trends show Net Income margin fell from 28.7% prior year to 10.8%, indicating a material deterioration in realized profitability. In conclusion, rapid growth driven by the AI Powered Worker Business delivered top-line expansion, but the drop-off of prior-year one-off income and increases in SG&A produced a revenue-up, profit-down outcome.
AI Research & Solution Business: Revenue ¥30.0B (¥24.9B prior year, +20.4%), Operating Income ¥9.2B (¥5.7B prior year, +60.7%), operating margin 30.7%. AI SaaS Business: Revenue ¥26.7B (¥19.3B prior year, +38.6%), Operating Income ¥9.4B (¥7.1B prior year, +33.0%), operating margin 35.3% — the highest profitability. AI Powered Worker Business: Revenue ¥31.9B (¥4.5B prior year, +613.9%), Operating Income ¥1.9B (¥0.6B prior year, +229.9%), operating margin 5.9% — the core revenue driver but low margin. Although AI Powered Worker Business is largest by revenue composition (36.0%), profit contribution is led by AI SaaS Business: ¥9.4B (58.0% of company segment profit ¥16.2B), indicating high-margin segments drive overall profit. Margin disparity between segments is wide — 30.7% (AI Research & Solution) vs 5.9% (AI Powered Worker), roughly a fivefold difference — improving profitability of growth segments is a key issue. Central cost allocation adjustment after company-wide expenses was -¥4.3B, increased from -¥3.2B prior year.
[Profitability] ROE 2.7% (worsened by -0.5pt YoY; had been improving from 0.8% in 2023 to 2.3% in 2024 but reversed this period), Operating Margin 18.2% (down -2.2pt from 20.4% prior year; above the 3-period average 17.8% but worse than prior year), Net Income Margin 10.8% (down -17.9pt from 28.7% prior year; below 3-period average 16.5%). [Cash Quality] Cash and cash equivalents ¥190.0B (from ¥193.6B prior period, -¥3.6B), representing 34.5% of total assets. Coverage against short-term liabilities is 1.3x (short-term liabilities ¥147.1B), so liquidity is maintained to a degree, but short-term borrowings ¥79.3B comprise 53.9% of short-term liabilities — refinancing risk warrants attention. [Investment Efficiency] Total asset turnover 0.16x (annualized on a quarterly basis ~0.64x) indicates low asset efficiency. Goodwill ¥126.3B and intangible assets ¥69.9B account for 35.7% of total assets, constraining capital efficiency. ROIC-equivalent is 2.3%, a low level. [Financial Soundness] Equity Ratio 64.4% (improved +0.7pt from prior period 63.7%), Current Ratio 173.8% (current assets ¥255.6B / current liabilities ¥147.1B), Debt-to-Equity 0.55x (total liabilities ¥193.4B / equity ¥357.1B). Total interest-bearing debt ¥99.1B (short-term ¥79.3B + long-term ¥19.8B) equals 27.8% of equity; lease liabilities of current ¥6.9B + non-current ¥4.5B total ¥11.4B.
Cash and cash equivalents decreased by -¥3.6B from ¥193.6B at prior fiscal period-end to ¥190.0B at this period-end, indicating quarter-level cash consumption. Balance sheet movements show trade receivables increased from ¥42.6B to ¥46.2B (+¥3.6B), as working capital rose with sales expansion and pressured cash. Contract liabilities slightly increased from ¥6.5B to ¥6.9B, so cash inflows from advance receipts were limited. Inventories decreased from ¥6.2B to ¥5.5B (-¥0.7B), contributing cash via inventory compression. Trade payables decreased from ¥21.5B to ¥18.1B (-¥3.4B), resulting in cash outflows for supplier payments. Short-term borrowings rose from ¥75.1B to ¥79.3B (+¥4.2B), supplementing working capital via external funding. Long-term borrowings decreased from ¥21.0B to ¥19.8B (-¥1.2B) reflecting scheduled repayments. Lease liabilities (current + non-current) decreased from ¥12.7B to ¥11.5B (-¥1.2B) as lease debts were repaid. Overall, trade receivables growth accompanying rapid revenue expansion strained liquidity and was offset by increased short-term borrowings; cash generation capacity was limited. Trade receivables of ¥46.2B versus revenue ¥88.6B implies days sales outstanding of approximately 190 days, indicating long collection terms and significant room to improve cash conversion efficiency.
Profit Before Tax ¥15.0B versus Operating Income ¥16.2B indicates net non-operating items of -¥1.2B. Breakdown: financial income ¥0.2B vs financial expenses ¥0.8B (net -¥0.6B) and equity-method loss -¥0.6B are principal causes, so non-operating items depress profitability. Prior-year period’s Other Income of ¥11.5B materially boosted Operating Income (accounting for about 53.4% of the prior-year Operating Income of ¥21.5B), but in the current period it fell to ¥0.08B, revealing the prior-year Operating Income level was supported by a one-off factor. Non-operating income is only 0.2% of Revenue this period, while financial costs and equity-method losses generated net non-operating expense of -¥1.2B. After tax expense ¥5.4B on Profit Before Tax ¥15.0B, Net Income was ¥9.6B; the effective tax rate 36.3% is heavy, and the Net Income / Profit Before Tax ratio of 63.6% hampers profitability. The cash flow statement is not disclosed, so direct comparison of Operating Cash Flow (OCF) and Net Income is not possible; however, given trade receivables increase +¥3.6B and short-term borrowings increase +¥4.2B, OCF generation relative to Net Income ¥9.6B appears limited. Earnings quality is a concern due to the drop-off of one-off “Other Income” and elongated trade receivables delaying cash conversion.
Full Year forecast: Revenue ¥350.0B, Net Income attributable to owners of the parent ¥28.5B (EPS forecast ¥91.73). Q1 progress ratio is 25.3% for Revenue (around the standard 25% level); progress ratio for Operating Income is not derivable, but on Net Income basis progress is 33.0% (¥9.4B / ¥28.5B), below the typical 50% (assuming Q2 weighting). Compared to standard progress rates, Revenue is on track but profitability is somewhat behind plan at Q1, suggesting a back-loaded profit plan for the second half. Full year Net Income ¥28.5B constitutes company guidance of +7.3% YoY (prior full-year data not provided; quarter basis reference), but the large divergence from Q1 Net Income YoY -32.3% implies significant recovery is assumed from Q2 onward. Disclosures of backlog or contract liabilities are limited (only contract liabilities ¥6.9B disclosed), so quantitative visibility of future Revenue is insufficient. Given business characteristics, calculating manufacturing-style backlog/Revenue ratios is inappropriate. Achieving full-year plan depends on controlling SG&A, stabilizing Other Income levels, and reducing tax burden.
No disclosure on dividends was included in the financial summary; payout ratio and annual dividend amount are unknown. There is no mention of share buybacks, so evaluating shareholder return policy is difficult at this time. Historical dividend data are not observable, suggesting the company either does not pay dividends or such information is outside disclosed scope. With no dividend policy provided relative to full-year EPS forecast ¥91.73, investors should await timely disclosures or full-year financial results for clarity on shareholder returns.
[Industry Position] (reference — company analysis) Within the IT & Communications sector (3-company comparison, 2025 Q1), the company’s relative position is as follows. Profitability: ROE 2.7% is well above industry median 0.2% and ranks high; Operating Margin 18.2% exceeds industry median 5.3% by +12.9pt, though does not reach industry IQR upper bound 26.3%, placing it mid-to-upper range. Net Income Margin 10.8% is well above industry median 0.6% and ranks high, but compared to industry IQR upper bound 16.6% it is closer to median. Solvency: Equity Ratio 64.4% is -4.5pt below industry median 68.9% and near the IQR lower bound 64.1%, indicating a weaker position. Efficiency: Total asset turnover 0.16x (quarterly basis) is below industry median 0.18x and ranks lower, underscoring low asset efficiency. Growth: Revenue growth +82.2% substantially outperforms industry median 25.5% and is top-ranked, but EPS growth -32.4% is far below industry median +3.0% and ranks lowest, reflecting a revenue-up, earnings-down profile notable even within the industry. Rule of 40 (Revenue growth 82.2% + Operating Margin 18.2% = 100.4%) far exceeds industry median 31.0%, making the company top-class on combined growth and profitability metrics. However, ROIC 2.3% — while above industry median 0.01 — remains low in absolute terms, indicating significant room to improve capital efficiency. In summary, the company stands out for growth within the industry but faces challenges in asset efficiency and financial soundness; improving earnings quality and cash generation is critical. (Industry: IT & Communications (3 companies), comparison: 2025 Q1, source: company aggregation)
This report is an automated financial analysis document generated by AI from XBRL financial summary data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by the firm based on public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.