| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥20.88B | ¥19.17B | +8.9% |
| Operating Income | ¥2.20B | ¥2.01B | +9.7% |
| Ordinary Income | ¥2.20B | ¥2.05B | +7.7% |
| Net Income | ¥1.41B | ¥1.53B | -8.2% |
| ROE | 27.8% | 36.5% | - |
Although the company posted higher revenue and operating profit, a key feature was that net income growth slowed relative to growth at the operating income and ordinary income levels. Revenue was ¥20.88B (+8.9% YoY), operating income was ¥2.20B (+9.7%), and ordinary income was ¥2.20B (+7.7%). Net income attributable to owners of the parent was ¥1.50B (+4.3%), while basic EPS was ¥89.80 (¥85.58 in the previous year). Higher demand in the core DX-related business (a single segment) contributed to revenue growth. While the operating margin remained broadly at the previous-year level of 10.5%, the increase in the effective tax rate from 29.7% to 31.8% was a factor behind the slowdown in net income growth.
【Revenue】Revenue increased 8.9% YoY to ¥20.88B. The company operates in a single DX-related business segment, and disclosure of the revenue composition by business category has been omitted. However, revenue from domestic external customers accounts for more than 90% of total revenue, suggesting that expanding domestic demand drove the increase in revenue. Contract liabilities (advances received) increased to ¥0.201B (¥0.131B in the previous year, +53.6%), serving as one indicator of the accumulation of future revenue.
【Profit and Loss】Cost of sales was ¥15.19B (+7.4% YoY), below revenue growth of +8.9%, and the gross profit margin improved to 27.2% from 26.2% in the previous year. Meanwhile, SG&A expenses increased substantially to ¥3.48B (+15.6% YoY), causing the SG&A ratio to rise to 16.7% from 15.7%. As a result, the operating margin was 10.5%, remaining nearly flat compared with 10.5% in the previous year. Ordinary income growth of +7.7% was slightly below operating income growth because non-operating income and expenses resulted in a small net decline. Corporate income taxes and other taxes increased to ¥0.70B (+15.6% YoY) against pretax income of ¥2.20B, resulting in net income growth of only +4.3%. In conclusion, although the company achieved higher revenue and profit, the pace of profit growth slowed due to the increased tax burden.
The company operates in a single DX-related business segment, and disclosure of segment performance and regional revenue (domestic ratio of more than 90%) has been omitted. Given the single-business model, the primary drivers of performance fluctuations are concentrated in overall demand trends for the business.
【Profitability】The operating margin was 10.5%, remaining nearly at the same level as the previous year (10.5%). The net profit margin, based on net income attributable to owners of the parent, was 7.2%, and ROE was 29.7% (net income attributable to owners of the parent ÷ equity at period-end). 【Cash Quality】Operating cash flow was ¥1.84B, equivalent to 1.22 times net income of ¥1.50B, indicating that earnings were supported by cash generation. 【Investment Efficiency】Total asset turnover was approximately 2.5x (revenue of ¥20.88B ÷ total assets of ¥8.56B), indicating high asset efficiency, which was the primary factor supporting ROE. 【Financial Soundness】The equity ratio was 59.1%, improving from 52.4% in the previous year. Total interest-bearing debt was in the ¥0.2B range and small in scale, indicating a low level of financial leverage.
Operating cash flow was ¥1.84B, an increase of +86.7% from ¥0.98B in the previous year, supported by a decrease in income taxes paid to ¥0.52B from ¥0.68B and an improvement in pretax income. Investing cash flow was -¥0.28B, representing a substantial decrease in outflows from -¥0.97B in the previous year, thereby reducing the burden of investment activities. Financing cash flow was -¥1.30B, primarily due to share repurchases of ¥0.65B and repayment of short-term borrowings (-¥0.65B), resulting in a shift to net cash outflow from +¥0.23B in the previous year. As a result, free cash flow was ¥1.55B (operating CF + investing CF), a significant improvement from ¥0.01B in the previous year, demonstrating the strength of the cash-generating capacity of the business.
Net income attributable to owners of the parent of ¥1.50B, calculated by deducting corporate income taxes and other taxes of ¥0.70B from pretax income of ¥2.20B, was nearly equal to comprehensive income of ¥1.50B. The small divergence indicates that temporary factors such as valuation differences had a limited impact, suggesting good earnings quality. No items equivalent to extraordinary gains or losses were identified. Non-operating income and non-operating expenses were both ¥0.04B and limited in scale, indicating that the increase in profit was driven by the earning power of the core business. Meanwhile, equity in earnings of affiliates was ¥0.01B, down from ¥0.04B in the previous year, and sluggish performance at affiliated companies slightly restrained growth at the ordinary income level. The fact that operating cash flow of ¥1.84B exceeded net income of ¥1.50B indicates a high degree of consistency between accounting earnings and cash generation.
The full-year outlook for the next fiscal year calls for revenue of ¥23.00B (+10.2% YoY), operating income of ¥2.43B (+10.4%), and ordinary income of ¥2.45B (+11.2%), indicating expectations for continued revenue and profit growth. Meanwhile, forecast EPS is ¥82.53, below current-period actual EPS of ¥89.80, and forecast net income of ¥1.33B is -11.4% relative to current-period actual net income of ¥1.50B. The fact that forecast net income is below current-period actual net income despite forecasts for higher revenue and profit may reflect assumptions regarding the tax burden or non-recurring items, making future disclosures a key point to monitor.
The company paid a dividend of ¥19 per share for the current period, resuming dividends after paying none in the previous period. Total dividends were ¥0.31B, and the company-reported payout ratio was 21.2%. In addition, the company conducted share repurchases of ¥0.65B. Combined total shareholder returns through dividends and share repurchases amounted to ¥0.96B, resulting in a total return ratio of 63.6% relative to net income attributable to owners of the parent of ¥1.50B. The dividend forecast for the next fiscal year is ¥0, and whether the resumption of dividends in the current period represents a sustained policy shift will depend on future announcements.
Business and Geographic Concentration Risk: The company operates in a single DX-related business segment and depends on domestic customers for more than 90% of its revenue. Given the limited diversification by business and geography, changes in domestic demand and industry trends are likely to be directly reflected in performance.
Increase in Trade Receivables: Notes and accounts receivable increased to ¥3.49B (¥3.27B in the previous year, +6.5%). DSO relative to revenue was approximately 61 days, nearly unchanged from 62 days in the previous year. Although the increase in the balance accompanying revenue growth does not itself indicate a sharp deterioration in collection efficiency, the expanding balance requires continued monitoring from a working capital management perspective.
Composition of Interest-Bearing Debt: Total interest-bearing debt was small, in the ¥0.2B range, and the financial base was conservative, with an equity ratio of 59.1%. However, short-term liabilities, including short-term borrowings and long-term borrowings due within one year, accounted for the majority of the debt structure. Although the scale was small relative to cash and deposits of ¥2.51B, changes in the funding structure should be monitored.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 10.5% | – | – |
| Net Profit Margin | 6.7% | – | – |
Because comparative data within the industry is limited, conclusions regarding relative strengths or weaknesses at an absolute level are deferred.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 8.9% | – | – |
Similarly, industry median data is limited, and the relative positioning of the growth rate will need to await further expansion of the data set.
※Source: Compiled by the Company
Although the company continued to achieve higher revenue and profit, growth in net income attributable to owners of the parent (+4.3%) slowed relative to growth in operating income (+9.7%) and ordinary income (+7.7%). The primary factor was the increase in the effective tax rate from 29.7% to 31.8%, and trends in the tax burden could affect the pace of profit growth going forward.
Operating cash flow increased substantially to ¥1.84B (+86.7% YoY), reaching 1.22 times net income. The decrease in income taxes paid and improved core earnings were the underlying factors, and the quality of cash flow supporting current-period earnings was sound.
The company paid a dividend of ¥19 per share, resuming dividends after paying none in the previous period, and strengthened shareholder returns through share repurchases of ¥0.65B. However, the dividend forecast for the next fiscal year is ¥0, making future company announcements regarding the continuity of the shareholder return policy a key point of interest.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility, after consulting with professionals as necessary.
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These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.