| Indicator | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥339.2B | ¥325.0B | +4.4% |
| Operating Income / Operating Profit | ¥45.8B | ¥45.3B | +1.1% |
| Ordinary Income | ¥46.9B | ¥46.1B | +1.7% |
| Net Income | ¥37.5B | ¥31.7B | +18.1% |
| ROE | 19.3% | 17.8% | - |
For the fiscal year ended March 2026, Revenue was ¥339.2B (YoY +¥14.2B +4.4%), Operating Income was ¥45.8B (YoY +¥0.5B +1.1%), Ordinary Income was ¥46.9B (YoY +¥0.8B +1.7%), and Net Income attributable to owners of the parent was ¥37.5B (YoY +¥5.8B +18.1%). Revenue increased across all segments, showing steady expansion, while Operating Income rose only marginally. Net Income increased substantially due to recording Special Gains of ¥11.9B, chiefly Investment Securities Disposal Gains of ¥11.6B. Operating margin contracted to 13.5% (down ▲0.4pt from 13.9% a year earlier), but Net Income margin improved to 11.0% (up +1.2pt from 9.8%).
[Revenue] Revenue increased to ¥339.2B (YoY +4.4%). By segment, core HumanResource (Human Resources services) accounted for ¥234.8B (+3.5%), representing 69.2% of the total; Recruiting grew to ¥39.9B (+11.0%) achieving double-digit growth; LocalInformationService (Local Information Services) expanded most rapidly to ¥30.8B (+14.8%). Overseas expanded steadily to ¥25.6B (+6.0%), while HRPlatform declined to ¥11.3B (▲9.9%). Gross profit was ¥225.9B (gross margin 66.6%), up +3.6% YoY, and gross margin improved by +0.8pt from 65.8% the prior year.
[Profitability] Operating Income rose modestly to ¥45.8B (YoY +1.1%). SG&A was ¥180.0B (SG&A ratio 53.1%), up +6.8% YoY, and the SG&A ratio deterioration from 51.8% to 53.1% (+1.3pt) was a key factor compressing operating margins. Non-operating income was ¥1.1B (interest income ¥0.4B, foreign exchange gains ¥0.2B, etc.), and non-operating expenses were negligible at ¥0.0B, resulting in Ordinary Income of ¥46.9B (+1.7%). Special gains totaled ¥11.9B, mainly Investment Securities Disposal Gains of ¥11.6B; Special losses were ¥1.0B (including impairment losses of ¥0.7B), expanding profit before tax to ¥57.8B (+8.9%). Income taxes were ¥16.2B (effective tax rate 28.0%), down from ¥17.2B the prior year, yielding Net Income attributable to owners of the parent of ¥37.5B (+18.1%). In conclusion, while the company achieved revenue and profit growth, operating-stage growth was slowed by higher SG&A, and the large increase in Net Income was largely due to one-time Special Gains.
HumanResource (Human Resources services) reported Revenue of ¥234.8B (+3.5%) and Operating Income of ¥36.4B (▲7.2%), a decline in profit, lowering the margin to 15.5% (down ▲1.8pt from 17.3% a year earlier). As this segment accounts for approximately 79% of consolidated Operating Income, margin deterioration here was the primary driver of the decline in consolidated profitability. Recruiting reported Revenue of ¥39.9B (+11.0%) and Operating Income of ¥11.5B (+29.6%), achieving high-margin growth; margin improved to 28.7% (up +3.0pt from 25.7%). LocalInformationService reported Revenue of ¥30.8B (+14.8%) and Operating Income of ¥4.9B (+35.3%), with margin improving significantly to 15.9% (up +2.4pt from 13.5%). Overseas reported Revenue of ¥25.6B (+6.0%) and Operating Income of ¥1.7B (+25.4%), with margin rising to 6.6% (up +1.0pt from 5.6%). HRPlatform declined to Revenue of ¥11.3B (▲9.9%) and Operating Income of ¥4.8B (▲19.1%), yet maintained a high margin of 42.2%. While improving profitability in core HumanResource remains a challenge, growth in Recruiting and Local Information Services supported consolidated profits.
[Profitability] Operating margin contracted to 13.5% (down ▲0.4pt from 13.9% prior year), while Net Income margin improved to 11.0% (up +1.2pt from 9.8%). ROE remained high at 19.3%. Gross margin improved to 66.6% (up +0.8pt from 65.8%), but SG&A ratio increased to 53.1% (up +1.3pt from 51.8%), reducing operating leverage. [Cash Quality] Operating Cash Flow (OCF) was ¥27.3B versus Net Income of ¥37.5B, yielding an OCF/Net Income ratio of 0.73x, indicating weaker cash conversion. Main drivers were income tax payments of ¥23.0B, decrease in accounts payable of ¥3.4B, and increases in working capital. [Investment Efficiency] Total asset turnover was 1.31x (Revenue ¥339.2B ÷ average total assets ¥255.5B), indicating efficient asset utilization. [Financial Soundness] Equity Ratio rose to 74.7% (up +3.7pt from 71.0% prior year), and Current Ratio was very high at 284.6% (current assets ¥176.8B ÷ current liabilities ¥62.1B). Cash and deposits of ¥132.8B and investment securities of ¥36.4B provide abundant liquidity; short-term borrowings were only ¥0.8B, effectively debt-free.
Operating Cash Flow was ¥27.3B (down ▲34.4% from ¥41.6B prior year). Subtotal (cash flow before income taxes) was ¥49.9B; main declines were income tax payments of ¥23.0B (up +125% from ¥10.2B prior year), decrease in accounts payable of ¥3.4B (prior year saw an increase of ¥6.2B), and increased deposits for guarantees of ¥9.9B (prior year saw collection of ¥2.3B), reflecting working capital deterioration. Investing Cash Flow was ▲¥27.1B (prior year ▲¥2.2B), driven mainly by acquisitions of investment securities of ¥30.3B (prior year ¥0.0B) and intangible asset additions of ¥8.1B (prior year ¥5.8B), partially offset by proceeds from sale of investment securities of ¥12.1B (prior year ¥7.6B). Capital expenditures were small at ¥0.4B. Financing Cash Flow was ▲¥19.0B (prior year ▲¥19.7B), primarily due to dividend payments of ¥18.6B. Free Cash Flow (Operating CF + Investing CF) was ¥0.2B, a small positive, meaning dividends this period were funded by drawing down cash on hand. Cash and cash equivalents decreased to ¥131.4B (down ▲¥18.7B from ¥150.1B prior year) but remain ample.
Against Ordinary Income of ¥46.9B, Special Gains of ¥11.9B (including Investment Securities Disposal Gains of ¥11.6B) and Special Losses of ¥1.0B (including impairment losses of ¥0.7B) were recorded, expanding Profit before Tax to ¥57.8B. The amplification from Ordinary Income to Net Income was about 23%, indicating significant contribution from one-time factors. Non-operating income was ¥1.1B (0.3% of Revenue), composed of interest income ¥0.4B and foreign exchange gains ¥0.2B, and thus had limited impact on recurring earnings. Comprehensive Income was ¥34.0B (¥3.5B below Net Income of ¥37.5B), with Other Securities Valuation Differences of ▲¥7.6B (prior year ▲¥2.3B) dragging down equity. Volatility in unrealized gains/losses on investment securities caused divergence between Comprehensive Income and Net Income, so attention should be paid to valuation-sensitive assets. Operating Cash Flow of ¥27.3B was below Net Income of ¥37.5B (0.73x), affected by accrual items such as increased tax payments, working capital changes, and non-cash adjustments for Special Gains. Recurring earnings capability should be assessed at the operating income level; the large increase in Net Income depends on temporary gains with limited sustainability.
Against the full-year plan (Revenue ¥348.0B, Operating Income ¥41.1B, Ordinary Income ¥42.2B, Net Income ¥28.1B, EPS ¥50.00), results were Revenue ¥339.2B (progress 97.5%), Operating Income ¥45.8B (111.4%), Ordinary Income ¥46.9B (111.1%), and Net Income ¥37.5B (133.5%). Operating Income and Ordinary Income exceeded the plan by about 11%, and Net Income exceeded the plan by about 34%. The large Net Income beat was mainly due to Special Gains such as Investment Securities Disposal Gains of ¥11.6B, which were not factored into the plan and are one-off. The operating-level outperformance likely reflects strength in Recruiting and Local Information Service and period-end SG&A allocation adjustments. Revenue fell short of plan by ▲2.5%, but profit performance substantially exceeded plan.
Dividends were ¥47.00 per share annually, composed of a year-end dividend of ¥21.00 and an interim dividend of ¥26.00 (adjusted for share split). Total dividends against Net Income of ¥37.5B amounted to approximately ¥26.4B (shares outstanding 56,122 thousand × ¥47.00), giving a payout ratio of approximately 70.4%. Dividend payments during the period amounted to ¥18.6B, representing coverage of 1.47x relative to Operating CF of ¥27.3B, which is adequate. No share buybacks were conducted (treasury stock acquisitions ¥0.0B in the financing cash flow breakdown); the shareholder return policy is dividend-focused. Note that a 3-for-1 stock split was implemented on December 1, 2025, so simple comparisons of dividend amounts require caution. With abundant cash and deposits of ¥132.8B and investment securities of ¥36.4B, capacity to sustain stable dividends is high, but recovery in Operating CF is a prerequisite for sustainably maintaining payouts.
SG&A ratio increase risk: SG&A of ¥180.0B (YoY +6.8%) outpaced Revenue growth (+4.4%), worsening the SG&A ratio to 53.1% (up +1.3pt from 51.8%). Fixed cost increases such as personnel, recruitment-related expenses, and training are suspected drivers; if Revenue growth slows, Operating margin could be further pressured. The margin of the core HumanResource segment fell to 15.5% (down ▲1.8pt), and because this segment accounts for about 79% of consolidated Operating Income, delayed margin recovery there would materially affect consolidated profitability.
Decline in Operating CF and weakening cash conversion: Operating CF declined to ¥27.3B (down ▲34.4% from ¥41.6B), and the OCF/Net Income ratio remained at 0.73x. Main causes include doubled income tax payments (¥23.0B), decrease in accounts payable (▲¥3.4B), and increase in guarantee deposits (▲¥9.9B), i.e., working capital fluctuations. Free Cash Flow was ¥0.2B, insufficient to internally fund dividends and investments. If acquisitions of investment securities and intangible investments continue, delayed recovery in Operating CF could force further drawdown of cash on hand.
Valuation volatility risk of investment securities: Investment securities were increased substantially to ¥36.4B (up +106% from ¥17.6B), accounting for 14.0% of assets. Other Securities Valuation Differences decreased by ▲¥7.6B this period, and Comprehensive Income of ¥34.0B lagged Net Income. Market value fluctuations of investment securities can impact equity and comprehensive income, and adverse market conditions could trigger realized losses or larger unrealized losses. The Investment Securities Disposal Gains of ¥11.6B were one-off; reproducibility is limited.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 13.5% | 8.1% (3.6%–16.0%) | +5.4pt |
| Net Income Margin | 11.0% | 5.8% (1.2%–11.6%) | +5.2pt |
Both Operating Margin and Net Income Margin materially exceed the industry median, positioning the company as a high-profit firm within the IT & Communications sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 4.4% | 10.1% (1.7%–20.2%) | -5.7pt |
Revenue growth is below the industry median, indicating a comparatively slower growth pace versus peers.
※ Source: Company aggregation
Operating Margin remains at a high level, +5.4pt above the industry median, but contracted ▲0.4pt YoY due to a rise in SG&A ratio (+1.3pt). Margin deterioration in the core HumanResource segment (▲1.8pt) pressured consolidated profitability; recovery of this segment’s profitability is key for margin improvement next fiscal year. Recruiting and Local Information Service are exhibiting high growth and high margins, indicating nascent portfolio diversification benefits.
Net Income increased sharply (+18.1%) driven by Investment Securities Disposal Gains of ¥11.6B, but this is largely a one-off and recurring earnings assessment should focus on operating results (+1.1%). Operating CF was ¥27.3B (73% of Net Income), and higher tax payments and working capital deterioration compressed cash conversion. Free Cash Flow of ¥0.2B does not cover dividends of ¥18.6B, so future investment and return policies depend on recovery in Operating CF.
Financial soundness is very high: Equity Ratio 74.7%, Current Ratio 284.6%, effectively debt-free, so liquidity risk is minimal. With cash of ¥132.8B and investment securities of ¥36.4B, resilience to economic fluctuations or risk crystallization is strong. Although Operating Income exceeded the full-year plan by over 11% and Net Income by over 34%, much of the excess relates to Special Gains; therefore, a cautious stance on next fiscal year’s outlook is warranted.
This report was automatically generated by AI analyzing XBRL financial statement disclosure data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are compiled by the company based on public financial statements and are for reference only. Investment decisions are your own responsibility; please consult a professional advisor as appropriate.