| Metric | Current Period | Prior Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | - | - | - |
| Operating Income / Operating Profit | ¥61.2B | ¥28.0B | +118.8% |
| Ordinary Income | ¥62.2B | ¥29.6B | +110.1% |
| Net Income | ¥10.6B | ¥33.1B | -67.9% |
| ROE | 2.7% | 8.9% | - |
For the fiscal year ended March 2026, Amuse reported Revenue of ¥696.6B (YoY +2.2%), Operating Income of ¥61.2B (YoY +¥33.2B, +118.8%), Ordinary Income of ¥62.2B (YoY +¥32.6B, +110.1%), and Net Income attributable to owners of parent of ¥26.9B (YoY +¥10.5B, +63.5%), achieving a substantial increase in profit. The operating margin improved to 8.8% from 4.1% in the prior year, a 4.7pt increase, indicating marked profitability improvement. The profit increase was driven by recovery in activity and higher unit prices in the core Live Entertainment Business, expansion of high-margin Booking & CM (appearance/advertising) business, and company-wide SG&A control (SG&A ¥54.1B vs ¥65.3B prior year, -17.2%). Separately, an extraordinary loss of ¥15.6B (including impairment loss of ¥15.1B) compressed profit before tax to ¥48.3B, and Net Income was only 43.2% of Ordinary Income. Operating Cash Flow (OCF) expanded significantly to ¥68.4B (prior year ¥4.3B), indicating high quality cash conversion. Dividends were maintained at ¥40 per share (same as prior year), and share buybacks of ¥7.0B were executed to strengthen total returns.
[Revenue] Revenue was ¥696.6B (prior year ¥681.9B, +2.2%). By segment, Live Entertainment Business generated ¥438.3B (+4.2%, 62.9% of total), composed of Event Revenue ¥250.1B and Fanclub & Merchandise Sales ¥188.2B; increased number of performances and higher ticket/pricing contributed. Music & Visuals Business was ¥186.2B (-5.7%, 26.7% of total): growth in Visuals Revenue ¥121.6B was offset by a decline in Music Revenue ¥63.3B. Appearance & CM Business (talent/advertising) achieved ¥72.0B (+12.8%, 10.3% of total) with double-digit growth due to acquisition of high-margin projects. Gross profit was ¥115.4B (prior year ¥93.3B, +23.6%) and gross margin improved to 16.6% (prior year 13.7%, +2.9pt), supported by a favorable event mix and improved content profitability.
[Profitability] SG&A was reduced to ¥54.1B (prior year ¥65.3B, -17.2%), lowering the SG&A-to-Revenue ratio to 7.8% (prior year 9.6%, -1.8pt). As a result, Operating Income rose to ¥61.2B (prior year ¥28.0B, +118.8%) and the operating margin improved to 8.8% (prior year 4.1%, +4.7pt). Non-operating income included equity-method investment income ¥0.8B and interest & dividend income ¥0.8B, among others, resulting in net non-operating income of ¥1.0B and Ordinary Income of ¥62.2B (prior year ¥29.6B, +110.1%). In extraordinary items, the company recorded gains on sale of subsidiary shares ¥19.5B and gains on sale of investment securities ¥0.8B, while recognizing extraordinary losses including impairment losses ¥15.1B and business restructuring costs ¥12.3B, totaling extraordinary losses ¥15.6B; pre-tax profit was ¥48.3B (prior year ¥31.6B, +52.9%). After corporate taxes ¥17.1B (effective tax rate 35.3%) and non-controlling interests ¥4.3B, Net Income attributable to owners of parent was ¥26.9B (prior year ¥16.5B, +63.5%). In summary, the company achieved revenue and profit growth, but extraordinary losses compressed profit at the pre-tax stage, and the conversion efficiency to Net Income remained 43.2% relative to Ordinary Income.
Live Entertainment Business delivered Operating Income of ¥31.99B (prior year ¥8.46B, +278.1%), with an operating margin of 7.3% (prior year 2.0%, +5.3pt), showing substantial improvement. Recovery in performance activity and expansion of EC sales to fanclub members drove the margin improvement. Music & Visuals Business posted Operating Income of ¥19.02B (prior year ¥15.03B, +26.5%) with a margin of 10.2% (prior year 7.6%, +2.6pt), supported by monetization of visual content and licensing income. Appearance & CM Business achieved Operating Income of ¥10.21B (prior year ¥4.48B, +127.9%) with the highest margin at 14.2% (prior year 7.0%, +7.2pt), driven by winning high-ticket projects. Operating leverage was evident across all segments, with Live Entertainment Business accounting for 52.2% of consolidated Operating Income, serving as the primary profit source.
[Profitability] Operating margin 8.8% (prior year 4.1%, +4.7pt) and Ordinary Income margin 8.9% (prior year 4.3%, +4.6pt) improved significantly. ROE remained at 2.7% (prior year 4.8%), impacted by compression of Net Income due to extraordinary losses and reduction of shareholders’ equity from share repurchases. ROA (based on Ordinary Income) doubled to 10.1% (prior year 4.9%, +5.2pt), indicating markedly improved asset efficiency. [Cash Quality] OCF ¥68.4B is 2.5x Net Income ¥26.9B, indicating strong cash realization of profits. OCF/EBITDA ratio is 1.01x, showing high cash conversion. The accrual ratio is -6.6%, negative, indicating healthy cash generation relative to accounting profit. [Investment Efficiency] Capital expenditures were ¥9.4B / depreciation ¥6.8B, an investment multiple of 1.4x, indicating continued growth investment. Total asset turnover was 1.11x (prior year 1.12x), remaining flat. [Financial Soundness] Equity Ratio 62.1% (prior year 60.7%, +1.4pt) and Current Ratio 222.7% (prior year 216.8%), both high. Interest-bearing debt ¥1.1B (long-term borrowings ¥1.1B, corporate bonds ¥0.4B, bonds maturing within one year ¥0.2B) with a net cash position of ¥316.0B (cash & deposits ¥266.7B + short-term securities ¥49.3B), Debt/EBITDA 0.02x, and Interest Coverage 3061x, reflecting an extremely conservative capital structure.
OCF improved substantially to ¥68.4B (prior year ¥4.3B, +1478.5%), generated from subtotal before working capital changes of ¥81.0B, then working capital outflow ▲¥5.0B (inventory increase) and tax payments ▲¥14.2B. Inventory was ¥10.8B (prior year ¥11.7B); within this, work-in-progress was ¥31.4B (prior year ¥24.9B, +26.3%) and has accumulated, indicating inventoryization due to progress on event/production projects. Investing Cash Flow was ▲¥62.5B (prior year ▲¥6.1B), primarily due to capital expenditures ▲¥9.4B, intangible asset investments ▲¥1.8B, purchases of short-term investment securities ▲¥49.1B, and proceeds from sale of subsidiaries ¥21.5B. Financing Cash Flow was ▲¥18.3B (prior year ▲¥20.6B), including dividend payments ▲¥6.7B, payments to non-controlling interests ▲¥3.1B, and share buybacks ▲¥7.0B (no prior year). Free Cash Flow (FCF) was positive ¥5.8B (OCF ¥68.4B + Investing CF ▲¥62.5B), but fell slightly short of total shareholder returns (dividends ¥6.7B + share buybacks ¥7.0B = ¥13.7B), so part of total returns was funded from cash on hand. Cash and deposits declined to ¥266.7B (prior year ¥277.9B, ▲¥11.2B), but ample liquidity cushion remains.
Ordinary Income ¥62.2B consists of Operating Income ¥61.2B and net non-operating income ¥1.6B (interest & dividend income ¥0.8B, equity-method investment income ¥0.8B, foreign exchange gains ¥0.3B, etc.), with non-operating expenses ¥0.6B (foreign exchange losses ¥0.1B, other ¥0.1B, etc.), resulting in net non-operating income of +¥1.0B and high stability of recurring earnings. However, extraordinary losses ¥15.6B (impairment losses ¥15.1B, business restructuring costs ¥12.3B, etc.) compressed profit before tax to ¥48.3B, resulting in a 22.3% reduction from Ordinary Income to profit before tax. These extraordinary losses are temporary and do not reflect recurring earning power. Comprehensive income was ¥33.4B, ¥6.5B above Net Income ¥26.9B, contributed by valuation items such as foreign currency translation adjustments ¥0.6B, net changes in available-for-sale securities ¥1.4B, and retirement benefit adjustments ¥0.2B. The OCF/Net Income multiple of 2.5x and accrual ratio of ▲6.6% indicate strong cash backing of profits and high quality of earnings. However, the build-up of work-in-progress (¥31.4B) means future revenue recognition and cash collection timing will be a factor, and inventory digestion progress will influence earnings quality in subsequent periods.
For the fiscal year ending March 2027, management projects Operating Income ¥20.0B (YoY ▲67.3%), Ordinary Income ¥21.0B (YoY ▲66.3%), Net Income attributable to owners of parent ¥12.5B (YoY ▲53.6%), EPS ¥77.09, and dividend ¥32 (prior year ¥40, ▲¥8), forecasting a significant decline in profit and dividend. Progress against the full-year forecast based on this year’s results is high: Operating Income 306.2% and Ordinary Income 296.4% of the forecast, reflecting that this fiscal year included special factors (concentration of event projects, contribution of high-margin projects, and compression of Net Income after extraordinary losses). The company states a conservative stance for next year, incorporating a decline in event projects, normalization of content mix, and cautious cost assumptions. Achievement of the full-year forecast depends on the certainty of the first-half performance lineup and the pace of inventory (work-in-progress) digestion. Payout Ratio is projected at 41.5% (this year 40.3%), maintaining a policy of stable dividends.
Annual dividend is ¥40 (interim ¥20, year-end ¥20, same as prior year), and Payout Ratio remained at 40.3% (prior year 40.3%), a sustainable level. Dividends paid totaled ¥6.8B against Net Income attributable to owners of parent ¥26.9B, indicating dividend sustainability, but FCF ¥5.8B versus dividends ¥6.8B created a shortfall of ▲¥1.0B covered by cash on hand. Additionally, share buybacks of ¥7.0B (no prior year) were executed, bringing total returns to ¥13.8B. Total Return Ratio (dividends + share buybacks) was 51.3%, significantly exceeding FCF, showing a strengthened shareholder return stance supported by abundant cash and deposits (¥266.7B). Treasury stock increased to ¥36.6B (prior year ¥28.4B, +28.9%), representing 2,408 thousand shares held as treasury stock out of 18,624 thousand shares outstanding (holding ratio 12.9%). Next fiscal year dividend forecast is ¥32 (▲¥8), a planned cut consistent with projected profit decline, with a Payout Ratio of 41.5% which is aligned with the lowered earnings. Sustainability of shareholder returns depends on recovery of FCF generation, smooth digestion of inventory (work-in-progress), and maintenance of event activity.
Event activity and attendance volatility: Live Entertainment Business accounts for 52.2% of consolidated Operating Income, so variability in event hosting conditions (weather, infectious diseases, regulations) directly affects earnings. Accumulation of work-in-progress ¥31.4B (YoY +26.3%) indicates more in-progress event projects, but schedule delays or cost overruns could compress margins and delay cash collection. Although the Live Entertainment Business margin improved to 7.3% from 2.0% last year, it remains sensitive to changes in number of performances and pricing; the company’s conservative forecast for next year (Operating Income ¥20.0B, YoY ▲67.3%) incorporates this potential pullback.
Reoccurrence of extraordinary losses causing Net Income volatility: This year included impairment losses ¥15.1B and business restructuring costs ¥12.3B, compressing pre-tax profit by 22.3% relative to Ordinary Income. Depending on asset valuations and progress of restructuring, there remains the possibility of future one-off charges, increasing Net Income volatility. Of the ¥6.5B gap between comprehensive income ¥33.4B and Net Income ¥26.9B, ¥1.4B in net changes in available-for-sale securities is exposed to market fluctuation risk, and unrealized gains/losses on investment securities ¥47.5B could affect future financials.
Concentration and turnover risk in inventory (work-in-progress): The disclosure that inventories are ¥10.8B while work-in-progress is ¥31.4B appears inconsistent and may reflect consolidated journal entries or unclear cost composition; the true state of inventory is therefore difficult to ascertain. Continued accumulation of work-in-progress could delay cash collection depending on project timing, increasing working capital burden. Of OCF ¥68.4B, working capital change ▲¥5.0B was mainly due to inventory increase, and next period inventory digestion pace and revenue recognition timing will determine FCF stability.
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Operating margin improved substantially to 8.8% (prior year 4.1%, +4.7pt), demonstrating strengthening of core earning power driven by margin improvement in the core Live Entertainment Business (7.3% vs 2.0% prior year) and SG&A reduction (YoY ▲17.2%). OCF ¥68.4B is 2.5x Net Income, indicating high-quality cash conversion. Current Ratio 222.7% and net cash ¥316.0B reflect an extremely solid financial base and high resilience to short-term business swings. However, extraordinary losses ¥15.6B introduced high Net Income volatility, requiring evaluations that distinguish recurring earning power from one-off items.
Next fiscal year plan is conservative with Operating Income ¥20.0B (YoY ▲67.3%), embedding a large rebound decline from this year’s high level (Operating Income ¥61.2B). Accumulation of work-in-progress ¥31.4B should be monitored as a leading indicator for next year’s revenue recognition and cash collection; certainty of the performance lineup and inventory digestion pace will determine the feasibility of achieving forecasts. Dividend is forecast at ¥32 (▲¥8) but with a Payout Ratio of 41.5%, a sustainable level; recovery in FCF generation could create room for future dividend increases. Total returns (dividends + share buybacks ¥13.8B) exceeded FCF, showing shareholder return enhancement backed by ample cash, but sustainability depends on balance with FCF and inventory digestion progress.
This report is an AI-generated financial analysis document automatically produced from XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmark data are compiled by the firm based on public financial disclosures and are provided as reference information. Investment decisions are your responsibility; please consult professionals as necessary before making any investment decision.