Property Data Bank,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥1.59B
• Operating Income: ¥375M
• Net Income: ¥290M
• EPS: ¥22.76

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Property Data Bank Co., Ltd. (4389) posted modest topline growth in FY2026 Q2 with revenue of ¥1,589m (+1.7% YoY), while profitability softened as operating income declined 12.7% YoY to ¥375m, indicating cost growth outpaced sales. Gross profit reached ¥954.8m, translating to a robust gross margin of 60.1%, consistent with a high-value software/service mix. EBITDA was ¥496.5m with an EBITDA margin of 31.2%, suggesting healthy unit economics but some operating leverage headwinds this period. Ordinary income of ¥406m exceeded operating income by about ¥31m, implying net non-operating gains (likely interest income or miscellaneous gains) with negligible interest expense of only ¥44k. Net income came in at ¥267m (-7.7% YoY), and EPS was ¥22.76. On a DuPont basis, ROE is 6.61% with net margin of 16.8%, asset turnover of 0.330x, and low financial leverage of 1.19x, reflecting a conservative balance sheet and solid profitability but modest capital efficiency typical of cash-rich, asset-light models. Liquidity is very strong: current assets of ¥3,258m vs. current liabilities of ¥856m produce a current ratio of 380%, and the absence of inventories is consistent with a software-centric business. Total liabilities are ¥988m against equity of ¥4,039m, implying low leverage (debt-to-equity 0.24x) and an implied equity ratio of roughly 83.9% (equity/assets), despite the reported equity ratio field being unreported. Operating cash flow was ¥651m, 2.44x net income, signaling strong cash conversion from earnings and likely favorable working capital (e.g., deferred revenue inflows or disciplined collections). Investing CF and cash/equivalent balances are not disclosed in this dataset, limiting free cash flow and cash runway analysis; the reported FCF of 0 should be treated as “not disclosed.” The effective tax expense recorded (¥156m) implies an effective tax rate around 37% on this interim basis, although the provided effective tax rate field is unreported. Dividend fields show 0 for DPS and payout, which likely reflects the interim period’s disclosure timing rather than an explicit zero-dividend policy. Overall, the company exhibits strong margins, excellent liquidity, and solid cash generation, but faces near-term margin pressure as costs outpace subdued revenue growth. Continued monitoring of expense discipline, recurring revenue momentum, and non-operating income contributions is warranted. Data limitations (unreported cash position, investing cash flows, shares outstanding, and certain ratios) constrain precision in some areas, but the available figures support a view of a fundamentally sound, low-leverage profile with conservative financial risk.

Profitability Analysis

DuPont ROE is 6.61%, decomposed as: net profit margin 16.80% × asset turnover 0.330 × financial leverage 1.19. The margin is healthy for a software/services model, but asset turnover is modest, a common outcome with substantial cash and low tangible assets. Operating margin compression is evident: revenue grew 1.7% YoY while operating income fell 12.7% YoY, indicating higher SG&A or personnel costs and limited operating leverage at current scale. Gross margin of 60.1% remains strong, supporting value-add in the offering; the spread between gross and EBITDA margins (approx. 29 ppts) reflects the SG&A intensity required to drive growth and support product. EBITDA margin at 31.2% shows solid underlying profitability even as operating income softened. Ordinary income outpaced operating income by roughly ¥31m, suggesting supportive non-operating income, which cushions bottom line results. Interest expense is immaterial (¥44k) and interest coverage is extremely high (8,523x), underscoring negligible financing drag. The implied effective tax rate from disclosed taxes (¥156.4m) and net income (¥267.0m) is about 36.9% on an interim basis. Overall, profitability quality is good, but the quarter’s expense growth has diluted operating margin and muted ROE despite strong gross economics.

Growth Assessment

Revenue growth of +1.7% YoY indicates deceleration or a softer demand environment versus typical software peers; timing of projects or slower expansion within existing accounts may be factors. Operating income declined 12.7% YoY, pointing to near-term cost growth outpacing sales, possibly from headcount additions, wage inflation, or go-to-market investments. Net income decreased 7.7% YoY; the gap relative to operating income decline was narrowed by non-operating gains. With gross margin steady at 60.1%, the growth challenge appears more on the demand/scale side than unit economic deterioration. Sustainability of growth will hinge on recurring revenue retention/expansion, backlog, and new logo acquisition; these inputs are not disclosed here. Outlook commentary cannot be derived from the provided data, but maintaining expense discipline and reigniting topline momentum will be key to restoring operating leverage. The current profitability base and cash generation provide room to invest for growth if returns are attractive.

Financial Health

Total assets ¥4,815m; equity ¥4,039m; liabilities ¥988m. Implied equity ratio is ~83.9% (equity/assets), despite the reported equity ratio field being unreported in this dataset. Current assets ¥3,258m vs. current liabilities ¥856m produce a current ratio and quick ratio of ~380%, indicating ample short-term liquidity and no reliance on inventories. Working capital is ¥2,402m, providing a sizable buffer for operating needs. Debt-to-equity is 0.24x on a total liabilities basis, consistent with very conservative leverage; interest burden is negligible. Ordinary income exceeding operating income suggests positive non-operating contributions, potentially from interest income on cash equivalents (not disclosed) or other gains. Overall solvency risk is low, and the balance sheet provides flexibility for investment or downside protection.

Cash Flow Quality

Operating cash flow of ¥651m is 2.44x net income (¥267m), indicating strong cash conversion and potentially favorable working capital dynamics (e.g., collections or deferred revenue inflows). Depreciation and amortization totals ¥121.5m, and EBITDA of ¥496.5m aligns with healthy non-cash add-backs supporting OCF. Investing CF is unreported (shown as 0), so true free cash flow cannot be determined; the displayed FCF of 0 should be treated as “not disclosed,” not as an economic zero. Financing CF was -¥119.9m, suggesting modest shareholder returns or debt changes, but details are not provided. Cash and equivalents are unreported, limiting analysis of cash runway and net cash position; nevertheless, very low interest expense implies minimal debt. Overall earnings quality appears high given the OCF/NI ratio and strong margins, but a full FCF assessment awaits investing cash flow and capex detail.

Dividend Sustainability

Dividend fields show DPS 0 and payout 0%, which likely reflects interim-period non-disclosure rather than a definitive zero dividend decision. Without investing CF and cash balance disclosure, FCF coverage of dividends cannot be precisely assessed; the reported FCF coverage of 0.00x is not usable. Profitability and OCF are strong, suggesting capacity to fund distributions if policy permits, but growth investment priorities and seasonality should be considered. Historical payout policy and year-end DPS guidance (not provided here) would be necessary to assess sustainability and trajectory. In the absence of full cash and capex data, dividend sustainability assessment remains constrained.

Risk Assessment

Business Risks:

• Slower revenue growth (+1.7% YoY) indicating potential demand softness or project timing risk
• Operating leverage risk from cost inflation (personnel, SG&A) outpacing sales growth
• Customer concentration or renewal risk in enterprise/CRE software deployments
• Competitive pressure from larger software vendors or niche proptech entrants
• Execution risk on product roadmap and cloud/service quality
• Cybersecurity and data privacy risks inherent in enterprise software handling property data
• Macroeconomic exposure to real estate investment cycles and IT budget timing

Financial Risks:

• Limited visibility on cash and investing cash flows due to unreported items
• Potential reliance on non-operating gains to support ordinary income in weaker quarters
• Interim tax rate variability impacting net income

Key Concerns:

• Margin compression with operating income down 12.7% YoY despite positive revenue growth
• Decelerating topline momentum and the need to reignite ARR/booking growth
• Data gaps (cash balance, capex/investing CF, share count) limiting precision in valuation and dividend analysis

Investment Implications

Key Takeaways:

• Strong gross (60.1%) and EBITDA (31.2%) margins confirm attractive unit economics
• Operating income decline (-12.7% YoY) highlights near-term cost pressure and weaker operating leverage
• OCF robust at ¥651m (2.44x net income), indicating high earnings quality
• Balance sheet conservative with implied equity ratio ~83.9% and debt-to-equity 0.24x
• Ordinary income exceeds operating income by ~¥31m due to non-operating gains
• Low financial leverage (FL 1.19) keeps ROE modest at 6.61% despite solid margins
• Revenue growth modest at +1.7% YoY; restoring momentum is key for margin recovery

Metrics to Watch:

• ARR growth, net revenue retention (NRR), and churn rates
• Bookings and backlog to gauge forward revenue visibility
• SG&A-to-sales ratio and headcount growth to track operating leverage
• Deferred revenue and receivables turnover for cash conversion durability
• Gross margin stability vs. cloud/vendor cost trends
• Non-operating income components and sustainability
• Capex/intangibles investment (once disclosed) to assess true FCF

Relative Positioning: Relative to TSE-listed software/proptech peers, the company exhibits stronger-than-average balance sheet strength and cash conversion, with competitive gross/EBITDA margins, but currently slower revenue growth and compressed operating leverage; net leverage is near zero, supporting resilience but moderating ROE compared with more leveraged or faster-growing peers.

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