AMUSE INC. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥4.96B
• Net Income: ¥3.52B
• EPS: ¥200.44

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Verdict: FY2026 Q2 was a strong quarter for Amuse, marked by a sharp rebound in core profitability and solid cash conversion. Operating income rose to 49.55 (100M JPY), up +154.9% YoY, with ordinary income at 49.91 (+148.5% YoY) and net income at 32.58 (+69.9% YoY), indicating broad-based profit recovery. Non-operating items were minor (income 0.65, expenses 0.29; net +0.36), so the earnings inflection is fundamentally operational rather than financial. Operating cash flow of 55.73 outpaced net income (OCF/NI 1.71x), highlighting clean earnings quality and timely collections. Liquidity is strong with a current ratio of 210.8% and quick ratio of 206.1%, backed by cash and deposits of 313.47 and limited long-term loans of 1.26. Equity stands at 400.42 against total liabilities of 263.08, yielding a conservative capital structure (D/E 0.66x). While revenue and gross margin were unreported, the large increase in operating income and modest non-operating contribution (non-operating income ratio 2.0%) suggest operating margin expansion YoY, though basis point quantification is not possible due to missing revenue data. EBITDA was 52.81 and depreciation/amortization 3.26, implying healthy operating cash generation aligned with the income statement. Tax expense of 15.46 implies an effective tax rate of 30.5%, within a normal Japanese corporate tax range. Working capital is ample at 274.13, reducing near-term refinancing or liquidity stress. Capital allocation remained shareholder-friendly with share repurchases of 7.00 alongside a low payout ratio of 22.9%, which appears well-covered by operating cash flow. Balance sheet flexibility is high given the sizable cash position relative to current liabilities, though interest-bearing debt is partially unreported. Given the entertainment model, the rebound likely reflects stronger live events and content monetization; sustainability will hinge on the event pipeline and artist activity in H2. With revenue unreported, margin analysis and DuPont detail are constrained; however, a simple half-year ROE proxy (NI/ending equity) is approximately 8.1% for the half, implying a high-teens annualized run-rate if sustained. Forward-looking, the company has room to continue investing in content and live operations while funding dividends and buybacks out of internally generated cash. Key watch points are the continuation of strong OCF relative to NI, capex discipline, and the cadence of major live events into H2.

Profitability Analysis

ROE decomposition (DuPont) is constrained by missing revenue; however, we can approximate components qualitatively. Net profit margin: Not calculable (revenue unreported). Asset turnover: Not calculable (revenue unreported). Financial leverage: 1.66x (Assets/Equity = 663.50/400.42). Implied half-year ROE proxy (NI/Equity at period-end): ~8.1% for six months; annualized would be ~16.2% if performance persists (caution: not strictly comparable without average equity). The component that visibly changed most YoY is operating profitability: operating income increased +154.9% YoY while non-operating effects were small (net +0.36), indicating core margin/operating leverage improvement as the primary driver. Business reason: post-pandemic normalization of live events and better monetization of artist activities and content likely lifted gross profit and diluted fixed SG&A, despite SG&A reported at 27.27 (absolute level only). Sustainability: partially sustainable if the event pipeline and content releases continue; however, earnings in entertainment can be project- and tour-driven, introducing volatility across quarters. Flags: We cannot verify whether SG&A grew faster than revenue due to no revenue disclosure; nonetheless, the scale of operating income growth suggests operating leverage outweighed any SG&A inflation this quarter.

Growth Assessment

Top-line sustainability cannot be quantified as revenue is unreported; however, profit growth is broad-based with operating and ordinary income both up triple digits YoY. The small non-operating contribution (2.0% of ordinary income) implies growth quality is mainly operational, not one-off gains. EBITDA of 52.81 versus D&A 3.26 indicates solid operating capacity to support growth investments. Effective tax rate at 30.5% is normal, implying no tax-driven distortion to growth. Outlook hinges on the H2 event slate, artist activity, and content pipeline; given the strong OCF/NI and ample cash, the company is positioned to fund tours and content production without stressing the balance sheet. Risks to growth include event scheduling risk, talent availability, and potential macro softness impacting discretionary consumer spending on entertainment.

Financial Health

Liquidity is strong: current ratio 210.8% and quick ratio 206.1%; ample cash and deposits of 313.47 comfortably exceed current liabilities of 247.45. No warning on current ratio (<1.0) or D/E (>2.0); D/E is a conservative 0.66x. Long-term loans are small at 1.26; interest-bearing debt overall is unreported, so net cash cannot be conclusively calculated, but cash is large versus the limited disclosed debt. Working capital of 274.13 provides a cushion against timing mismatches. Maturity mismatch risk appears low given the scale of cash relative to current liabilities; however, the absence of short-term loans disclosure limits a full view of refinancing needs. No off-balance sheet obligations were reported in the data provided.

Cash Flow Quality

OCF/Net Income is 1.71x, indicating high-quality earnings with strong cash conversion. Free cash flow cannot be fully computed due to unreported investing CF; however, OCF minus reported capex suggests an FCF proxy of about 51.48, positive and ample to fund buybacks (7.00) and ordinary dividends at a low payout ratio. Working capital movements are not disclosed in detail, but the strong OCF relative to NI suggests no aggressive working capital pull-forward; continued monitoring of receivables and advances is warranted in event-driven quarters. No signs of reliance on non-operating gains: non-operating balance was small (+0.36). Financing CF of -11.49 reflects shareholder returns, not distress.

Dividend Sustainability

The calculated payout ratio is 22.9%, comfortably below the 60% benchmark and consistent with a conservative policy. Although total dividends paid are unreported, OCF of 55.73 and an FCF proxy of ~51.48 (OCF less capex) imply strong coverage for ordinary dividends and ongoing buybacks (7.00). Balance sheet liquidity (cash 313.47) further underwrites dividend capacity through cycles. Absent revenue and full investing CF detail, we assume no large one-off cash drains; any step-up in content investment or acquisitions would be the main swing factor.

Risk Assessment

Business Risks:

• Event pipeline and attendance volatility impacting quarterly earnings
• Talent concentration risk (key artists’ activity hiatus or contract changes)
• Content production schedule risk and hit-dependence for monetization
• Macroeconomic sensitivity of discretionary spending on live entertainment
• Potential disruptions (public health, safety incidents) affecting tours and events

Financial Risks:

• Partial non-disclosure of interest-bearing debt limits net cash clarity
• Revenue and gross margin unreported, reducing visibility on margin structure
• Foreign currency exposure on overseas tours/content not quantified
• Potential ticket refund liabilities in event postponements/cancellations

Key Concerns:

• Sustainability of the sharp YoY profit rebound into H2 without full revenue data
• Dependence on a limited number of large-scale tours or releases
• Execution risk around content investment timing versus cash returns

Investment Implications

Key Takeaways:

• Core earnings recovery is strong: operating income +154.9% YoY with minimal non-operating lift
• Cash conversion is healthy (OCF/NI 1.71x) and liquidity robust (current ratio 210.8%)
• Capital structure is conservative (D/E 0.66x) with small disclosed long-term debt (1.26)
• Shareholder returns ongoing via buybacks (7.00) with low payout ratio (22.9%)
• Earnings trajectory remains contingent on event cadence and artist activity in H2

Metrics to Watch:

• Revenue and gross profit disclosure in the next filing to quantify margin trends
• Operating income trajectory versus SG&A to assess operating leverage sustainability
• OCF/NI ratio and working capital movements (ticketing advances, receivables)
• Capex and broader investing CF for content/tour investments and potential M&A
• Event pipeline visibility (number/scale of tours) and overseas contribution

Relative Positioning: Within Japan’s entertainment/live events peers, Amuse presents a strong liquidity and cash conversion profile with conservative leverage and active shareholder returns; near-term performance appears driven by core operations rather than financial items, but visibility is somewhat lower than peers that disclose fuller revenue and segment detail.

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