| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥553.3B | ¥453.6B | +22.0% |
| Operating Income | ¥43.1B | ¥26.4B | +63.6% |
| Ordinary Income | ¥43.5B | ¥23.8B | +82.7% |
| Net Income | ¥28.7B | ¥13.4B | +113.2% |
| ROE | 26.7% | 18.6% | - |
The FY2026 results delivered a substantial revenue and profit increase, supported by a recovery in leisure and entertainment demand. Revenue was ¥553.3B (YoY +¥99.7B +22.0%), Operating Income ¥43.1B (YoY +¥16.7B +63.6%), Ordinary Income ¥43.5B (YoY +¥19.7B +82.7%), and Net Income ¥28.7B (YoY +¥15.3B +113.2%), achieving double-digit growth across all profit stages. Operating margin improved to 7.8% (up +2.0pt from 5.8% a year earlier), and net margin expanded to 5.2% (up +2.2pt from 3.0%), reflecting marked improvement in the earnings structure driven by operating leverage.
[Revenue] Revenue of ¥553.3B (YoY +22.0%) was driven by normalization of event demand and expansion of handled transaction volumes. Gross profit was ¥217.1B (gross margin 39.2%), reflecting growth equivalent to YoY +28.2%, aided by a favorable mix toward higher-margin items such as commission income and system services. The Company’s core segment is leisure and entertainment-related businesses, with domestic (Japan) sales accounting for over 90%. The primary contributors to revenue growth were an increase in the number of live events and concerts, relaxation of attendance restrictions leading to higher transaction counts, and expansion of ancillary services through platform strengthening.
[Profitability] SG&A was ¥174.0B (SG&A ratio 31.4%), up YoY +21.7%, but below revenue growth (+22.0%), resulting in a significant increase in Operating Income to ¥43.1B (YoY +63.6%). Operating margin improved to 7.8% (from 5.8% prior year), with strong operating leverage. Ordinary Income of ¥43.5B (YoY +82.7%) largely reflected operating improvement; non-operating income totaled ¥4.9B (including interest income ¥0.4B and equity-method income ¥0.9B), while non-operating expenses were ¥4.6B (including interest expense ¥3.3B), roughly balanced. An impairment loss of ¥0.6B was recorded as an extraordinary loss but had a minor impact on Ordinary Income. After deducting income taxes of ¥9.7B (effective tax rate 22.6%), Net Income totaled ¥28.7B (YoY +113.2%), benefiting from improvement at the operating level and resulting in substantial revenue and profit growth.
[Profitability] Operating margin 7.8% (improved +2.0pt from 5.8% prior year) and Net margin 5.2% (improved +2.2pt from 3.0%) demonstrate sequential improvement in profitability. Gross margin 39.2% improved +1.9pt from 37.3% a year earlier, aided by mix effects from commissions and ancillary services. ROE 26.7% exceeded prior-year 24.9%, maintaining high shareholder returns.
[Cash Quality] Operating Cash Flow (OCF) ¥131.4B is 4.6x Net Income of ¥28.7B, and the OCF/EBITDA ratio is 1.95x, indicating very strong cash conversion of earnings. The accrual ratio is substantially negative, indicating earnings are backed by cash to a large extent.
[Investment Efficiency] Total asset turnover is 0.47x, and tangible fixed asset turnover is 4.95x; although total assets have expanded due to build-up of settlement-related assets and liabilities, turnover has been maintained. Capex/depreciation ratio is 0.10x, showing restrained tangible investment, while intangible asset investment was ¥24.0B (software, etc.), indicating active growth investment.
[Financial Soundness] Equity Ratio 9.2% (improved +2.1pt from 7.1% prior year) remains low but is steadily improving through retention of Net Income. Current Ratio 104.1% and Quick Ratio 103.9% indicate minimum short-term liquidity is secured. Long-term borrowings are ¥148.0B and short-term repayment portion ¥10.2B, so interest-bearing debt totals ¥158.2B. Debt/EBITDA is 2.13x and Interest Coverage is 12.9x, showing repayment capacity in the investment-grade range. D/E is 9.90x, indicating high leverage; note that non-interest-bearing liabilities such as accounts payable ¥678.1B and advances received ¥91.8B are large due to the business model.
Operating Cash Flow ¥131.4B (YoY -14.3%) started from profit before tax ¥42.8B plus depreciation ¥26.5B, with working capital changes including an increase in trade receivables of -¥45.1B, increase in trade payables of +¥76.1B, and increase in advances received of +¥28.9B contributing, resulting in an OCF/Net Income ratio of 4.6x and high-quality cash generation. Investing Cash Flow was -¥28.9B, consisting primarily of acquisition of tangible fixed assets -¥2.7B and acquisition of intangible fixed assets -¥24.0B. Financing Cash Flow was -¥18.1B, including long-term borrowings repayment -¥18.1B and dividend payments -¥5.5B. As a result, Free Cash Flow was ¥102.6B (OCF + Investing CF), maintaining abundant cash generation, and Cash and Deposits increased to ¥547.5B, up +¥84.5B. DSO was 213 days and DPO was 737 days, lengthening the settlement cycle, but CCC is effectively negative, supporting cash generation.
Operating profit of ¥43.1B flowed through to Ordinary Income ¥43.5B and Net Income ¥28.7B with non-operating items broadly neutral (Non-operating income ¥4.9B - Non-operating expenses ¥4.6B = +¥0.3B). The extraordinary loss of ¥0.6B (impairment) was minor and temporary. The difference between Ordinary Income and Net Income is attributable to income taxes of ¥9.7B; the effective tax rate of 22.6% is standard. OCF ¥131.4B / Net Income ¥28.7B = 4.6x indicates cash-led high-quality earnings and accruals are substantially negative. Breakdown of non-operating income includes interest income ¥0.4B and equity-method income ¥0.9B, indicating recurring income sources. Comprehensive income of ¥34.1B comprises Net Income ¥28.7B plus Other Comprehensive Income ¥0.9B (including ¥0.8B actuarial adjustments for retirement benefits), with limited impact from OCI items.
Against the full-year guidance (Revenue ¥480.0B, Operating Income ¥25.0B, Ordinary Income ¥23.0B, EPS ¥97.70, Dividend ¥0), actual results materially exceeded forecasts: Revenue ¥553.3B (progress 115.3%), Operating Income ¥43.1B (progress 172.4%), Ordinary Income ¥43.5B (progress 189.1%), EPS ¥216.37 (progress 221.5%). Relative to a standard progress rate of 100%, Revenue was +15.3pt and Operating Income +72.4pt above guidance, driven by stronger-than-expected demand recovery and cost efficiency. Event counts, transaction volumes, and ancillary revenues outperformed assumptions at guidance formulation, and operating leverage amplified results, significantly surpassing the conservative guidance.
A year-end dividend of ¥35 was paid (Payout Ratio 16.2%). As there was no dividend in the prior year, this marks a resumption of dividends. Dividend total was ¥5.5B against Free Cash Flow ¥102.6B, yielding dividend coverage of 18.7x, indicating ample room. Given the low Equity Ratio of 9.2%, priority is to strengthen the financial base through retained earnings while implementing gradual shareholder returns. Total Return Ratio is calculated only on dividends as no share buybacks were conducted.
Event supply and regulatory variability risk: Revenue is highly dependent on leisure and entertainment-related businesses, and changes in external conditions—such as the number of event executions, attendance restrictions, and safety regulations—can materially affect earnings. While YoY +22.0% revenue growth was supported by demand recovery, during demand cycles operating leverage can work in the opposite direction and amplify declines.
High-leverage structure and weak equity base: Equity Ratio 9.2% and D/E 9.90x indicate high leverage and limited buffers against external shocks. Large non-interest-bearing liabilities such as accounts payable ¥678.1B and advances received ¥91.8B make cash flow sensitive to settlement flow changes. Although Debt/EBITDA 2.13x and Interest Coverage 12.9x indicate repayment capacity at present, deterioration in earnings could rapidly worsen metrics.
Concentration on intangible investment and technology obsolescence risk: Intangible investment ¥24.0B vs. tangible investment ¥2.7B shows a strong bias toward intangible assets. As dependence on platforms and systems increases, risks of obsolescence rise with intensified technological innovation and UX competition. The impairment loss of ¥0.6B was minor, but visibility of investment outcomes (ARPU, utilization KPIs) is key to sustainability.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.8% | 8.1% (3.6%–16.0%) | -0.3pt |
| Net Margin | 5.2% | 5.8% (1.2%–11.6%) | -0.7pt |
| Profitability is close to the industry median, with operating and net margins in the mid-range and at standard levels. |
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 22.0% | 10.1% (1.7%–20.2%) | +11.9pt |
| Revenue growth outperformed the industry median by +11.9pt, achieving top-quartile growth. Capture during the demand recovery phase was effective. |
※Source: Company compilation
Realization of operating leverage: With Revenue +22.0% and Operating Income +63.6%, operating leverage strongly contributed, improving Operating Margin to 7.8% (up +2.0pt from 5.8%). OCF/Net Income 4.6x and Free Cash Flow ¥102.6B demonstrate robust cash generation and high quality of earnings. Guidance progress rates were 115.3% (Revenue) and 172.4% (Operating Income), confirming strong demand environment and execution capabilities.
Gradual improvement in financial base and dividend resumption: Equity Ratio improved to 9.2% (up +2.1pt from 7.1%) through internal retention of Net Income, strengthening the financial base. Dividend resumption at ¥35 (Payout Ratio 16.2%) is sustainable given Free Cash Flow coverage of 18.7x. However, D/E 9.90x indicates persistent high leverage, and strengthening resilience against demand volatility remains a priority.
Growth strategy led by intangible investment and visibility of outcomes: Intangible investment ¥24.0B vs. tangible investment ¥2.7B highlights a growth strategy centered on platform and system enhancement. Visualization of investment outcomes (ARPU improvement, utilization stability, release velocity KPIs) and addressing technology obsolescence risk are key to sustained growth.
This report was automatically generated by AI analyzing XBRL financial disclosure data and is a financial analysis document. It does not constitute a recommendation to invest in specific securities. Industry benchmarks are reference information compiled by the Company based on public financial data. Investment decisions are your own responsibility; consult a professional advisor as needed.