| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥86.9B | ¥61.8B | +40.6% |
| Operating Income / Operating Profit | ¥17.9B | ¥2.6B | +595.6% |
| Ordinary Income | ¥18.7B | ¥3.0B | +529.0% |
| Net Income / Net Profit | ¥18.2B | ¥3.3B | +458.2% |
| ROE | 15.5% | 2.5% | - |
For the full year ended March 2026, Revenue was ¥86.9B (YoY +¥25.1B +40.6%), Operating Income was ¥17.9B (YoY +¥15.3B +595.6%), Ordinary Income was ¥18.7B (YoY +¥15.7B +529.0%), and Net Income attributable to owners of the parent was ¥15.9B (YoY +¥14.3B +835.8%). Both revenue and profit finished with substantial growth; Operating Margin improved to 20.6% (prior year 4.2%) up +16.4pt, and Net Margin improved to 18.3% (prior year 2.8%) up +15.5pt. Gross Margin rose to 53.0% (prior year 47.4%) +5.6pt, driven by acquisition of high value-added projects and contribution from highly profitable venture investment deals. Operating Cash Flow (OCF) was ¥25.8B (YoY +109.4%), and Free Cash Flow (FCF) was ¥14.5B, indicating strong cash conversion of profits.
[Revenue] Revenue of ¥86.9B (+40.6%) was driven by expansion in the core Consulting segment (reported name: Business Produce) at ¥67.9B (+24.4%) and the Venture Investment segment (reported name: OperatingInvestment) at ¥19.0B (+161.5%). Revenue mix was Consulting 78.1% and Investment 21.9%; while Consulting remains the primary business, rapid growth in the Investment segment accelerated company-wide growth. Consulting growth was due to expansion of business creation support and growth strategy planning engagements, while the Investment segment benefited from monetization deals from equity investments and management of investment partnerships. Accounts receivable were ¥17.3B (prior year ¥15.8B) with DSO of 73 days, indicating somewhat extended collection terms and necessitating continued working capital monitoring.
[Profitability] Cost of sales was ¥40.8B, yielding Gross Profit of ¥46.1B (Gross Margin 53.0%). Selling, General & Administrative expenses were ¥28.2B (32.4% of sales), increasing only +5.5% from prior year ¥26.7B, substantially below revenue growth of +40.6%, thereby generating operating leverage and improving Operating Income to ¥17.9B (Operating Margin 20.6%). By segment, Consulting delivered Operating Income of ¥19.7B (Margin 29.0%, YoY +86.6%) and Investment delivered ¥9.8B (Margin 51.6%, YoY +235.2%), with both segments achieving high profitability and fully absorbing corporate expenses (adjustment -¥11.6B). Non-operating items included interest income ¥0.5B, non-operating income ¥0.9B, and non-operating expenses ¥0.1B (including forex losses), netting +¥0.8B to reach Ordinary Income of ¥18.7B. There were no material extraordinary items; from Pre-tax Income ¥18.7B, Income Taxes of ¥2.8B (effective tax rate 15.2%) and Non-controlling Interests loss of ¥0.1B were adjusted, resulting in Net Income attributable to owners of the parent of ¥15.9B. In summary, simultaneous expansion of high value-added Consulting projects and monetization in Investment activities drove the large revenue and profit increases.
The Business Produce segment (Consulting) reported Revenue ¥67.9B (YoY +24.4%) and Operating Income ¥19.7B (YoY +86.6%, Margin 29.0%), achieving revenue and profit growth driven by expansion of business creation support and growth strategy planning projects. The Venture Investment segment (OperatingInvestment) reported Revenue ¥19.0B (YoY +161.5%) and Operating Income ¥9.8B (YoY +235.2%, Margin 51.6%), with substantial contribution from monetization of equity investments and investment partnership operations, maintaining ultra-high profitability. Both segments grew revenues and profits and fully absorbed corporate expenses (adjustment -¥11.6B), producing consolidated Operating Income of ¥17.9B. Segment assets were Consulting ¥17.3B and Investment ¥28.0B, with the Investment segment holding a relatively larger asset base; majority of consolidated assets are current assets such as cash and marketable securities.
[Profitability] Operating Margin 20.6% (prior year 4.2%), Net Margin 18.3% (prior year 2.8%) improved substantially, yielding ROE 15.5% (prior year 2.5%) at a high level. Gross Margin 53.0% (prior year 47.4%) rose due to high value-added projects and investment income contribution, and SG&A ratio 32.4% improved -10.8pt from prior year 43.2%. [Cash Quality] Operating Cash Flow (OCF) ¥25.8B is 1.42x Net Income ¥18.2B, indicating good cash conversion. OCF/EBITDA ratio is 1.40x and the accrual ratio is -4.7%, reflecting strong cash generation. [Investment Efficiency] ROA (on Ordinary Income basis) 11.9% (prior year 1.9%), Total Asset Turnover 0.56x, showing improved asset efficiency. EPS ¥181.41 (prior year ¥19.39), BPS ¥1,323.87, so per-share metrics also improved significantly. [Financial Soundness] Equity Ratio 75.1% (prior year 82.1%) remains high, and Current Ratio 616% indicates very strong liquidity. There is no interest-bearing debt; cash and deposits ¥39.7B and marketable securities ¥60.0B, securing total current assets ¥151.2B and ample financial flexibility.
Operating Cash Flow (OCF) was ¥25.8B (prior year ¥12.3B, +109.4%), generated from Pre-tax Income ¥18.7B adjusted for Depreciation ¥0.6B, changes in provisions ¥2.4B, and working capital movements. Main adjustments included increase in accounts receivable -¥1.6B, increase in accrued expenses ¥5.4B, and corporate tax payments -¥2.0B. Investing Cash Flow was -¥11.2B, primarily consisting of acquisition of short-term investment securities -¥34.9B offset by redemption/sales ¥25.0B for a net -¥9.9B, plus capital expenditures -¥0.9B. Financing Cash Flow was -¥31.4B, mainly dividend payments -¥29.9B and share buybacks -¥1.8B. FCF was ¥14.5B (OCF ¥25.8B + Investing CF -¥11.2B), and FCF coverage of total returns ¥29.9B was 0.49x; the shortfall was covered by drawing down existing cash and marketable securities. Cash and deposits decreased by -¥16.9B to ¥39.7B (prior year ¥56.6B), but liquidity remained sufficient after the high level of returns.
Current period profits are primarily operating-driven, with Operating Income ¥17.9B comprising the majority. Non-operating income was ¥0.9B (interest income ¥0.5B, subsidies ¥0.3B, etc.) representing 1.0% of Revenue, indicating low dependence on non-recurring income. There were no extraordinary items; earnings were generated from recurrent business activities. OCF ¥25.8B is 1.42x Net Income ¥18.2B, and the accrual ratio is -4.7%, supporting strong cash backing. The gap between Ordinary Income ¥18.7B and Net Income ¥15.9B is attributable to tax burden (effective tax rate 15.2%) and Non-controlling Interests -¥0.1B, and overall earnings quality is assessed as high. Comprehensive Income ¥17.0B differs from Net Income ¥18.2B by -¥1.2B, explained by increase in valuation差額金 of marketable securities ¥1.1B and foreign currency translation adjustments ¥0.1B.
A year-end dividend of ¥137 per share was paid, representing a Payout Ratio of 21.8%, leaving room for flexibility. During the period, share buybacks of ¥1.8B were executed, making total return amount Dividend ¥29.9B + Treasury Stock Repurchase ¥1.8B = ¥31.7B. Total Return Ratio was 174% versus Net Income ¥18.2B, a high level driven by retained earnings ¥53.2B and abundant cash balances as the basis for strengthening shareholder returns. FCF ¥14.5B coverage of total returns was 0.46x, indicating returns partially funded from existing cash and therefore temporary; future sustainability depends on Operating Cash Flow levels and profit growth. With Equity Ratio 75.1% and ample financial flexibility, the company aims to enhance shareholder value through a flexible mix of dividends and buybacks.
Concentration Risk in Consulting Business: 78.1% of Revenue depends on the Business Produce segment, so pipeline and pricing volatility directly affect performance. DSO of 73 days and somewhat extended collections have been observed; timing of large contract wins and collections may impact working capital and cash flows.
Volatility of Venture Investment Returns: The Investment segment has a high margin of 51.6% but depends on exit environments in equity markets and M&A conditions; adverse market conditions could materially reduce contributions from investments. While monetization proceeded smoothly this period, market deterioration could reduce profit contribution and affect consolidated profitability.
Talent Acquisition and Retention Risk: Delivery of high value-added consulting services requires specialized personnel; competition in the talent market and rising compensation could pressure margins. Stock-based compensation reserves ¥12.3B are elevated, and future increases in compensation expense or talent outflow could impact profitability.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 20.6% | 8.1% (3.6%–16.0%) | +12.5pt |
| Net Margin | 21.0% | 5.8% (1.2%–11.6%) | +15.2pt |
Profitability metrics substantially exceed industry medians, delivering top-tier margins within the IT & Communications sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 40.6% | 10.1% (1.7%–20.2%) | +30.5pt |
Revenue growth outpaces the industry median by +30.5pt, marking the company as a high-growth entity.
※Source: Company aggregation
Establishment of a high-profit model driven by both Consulting and Investment: Consulting margin 29.0% and Investment margin 51.6% produced consolidated Operating Margin 20.6%, delivering sector-leading profitability. Key monitoring points going forward are sustaining the pipeline of high value-added Consulting projects and timing of exits/monetization in the investment portfolio.
Strong liquidity and active shareholder returns: Cash and deposits ¥39.7B and marketable securities ¥60.0B secure current assets ¥151.2B, and Equity Ratio 75.1% denotes substantial financial capacity. Despite executing high total returns (174%), retained earnings ¥53.2B and a strong balance sheet underpin the actions; balance between FCF and returns and working capital management trends will be monitoring points.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed.