Infcurion,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥4.28B
• Operating Income: ¥272M
• Net Income: ¥382M
• EPS: ¥20.47

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

Infcurion reported solid topline expansion in FY2026 Q2 with revenue of ¥4,279 million, up 25.4% year over year, indicating sustained demand across its service lines. Gross profit reached ¥1,962.963 million, implying a healthy gross margin of 45.9%, which suggests pricing power and/or a favorable mix. Operating income was ¥272 million (+25.7% YoY), yielding an operating margin of approximately 6.4%, broadly consistent with revenue growth and indicating stable operating leverage in the period. Ordinary income of ¥245 million reflects modest non-operating headwinds, primarily interest expense of ¥16.056 million and other net non-operating items. Net income surged to ¥382 million (+167.6% YoY), outpacing operating profit growth, driven by a negative income tax line (¥-136.729 million), which likely reflects tax credits or one-off tax effects. The net margin printed at 8.93%, benefitting from the tax effect and exceeding the operating margin by a wide gap, which may not be recurring. DuPont analysis shows ROE of 13.64% from an 8.93% net margin, 0.655x asset turnover, and 2.33x financial leverage, pointing to balanced contributions from profitability and leverage. Liquidity appears strong with a current ratio of 241.0% and a quick ratio of 235.5%, supported by working capital of ¥2,341 million. Solvency metrics are moderate, with a debt-to-equity ratio of 1.01x and interest coverage of 16.9x, indicating manageable financial risk at current earnings power. Operating cash flow was negative at ¥-688 million, implying significant working capital outflows amid growth, and the company leaned on financing inflows of ¥990 million to support operations and expansion. Investing cash flow and depreciation/amortization were not disclosed under the provided taxonomy, limiting full visibility into capital intensity and free cash flow. The effective tax rate metric is shown as 0.0% due to the negative tax expense, which is unlikely to be a normalized rate. No dividends were declared (DPS ¥0.00), consistent with reinvestment of cash into growth and/or balance sheet considerations. The equity ratio was reported as 0.0% within the dataset, which is a placeholder rather than an economic figure, and total equity disclosure (¥2,800 million) appears lower than the implied residual when comparing total assets and liabilities; this may reflect undisclosed line items (e.g., non-controlling interests, valuation differences) or reporting taxonomy differences. Overall, profitability momentum is encouraging, but cash flow quality in the half is weak due to working capital build, and earnings were flattered by non-recurring tax effects. Near-term focus should be on normalization of operating cash flow, visibility into capex/intangibles, and the sustainability of margins as growth scales.

Profitability Analysis

ROE_decomposition: ROE 13.64% = Net margin 8.93% x Asset turnover 0.655 x Financial leverage 2.33. The DuPont bridge indicates margin strength as the largest contributor, with modest asset utilization and measured leverage supporting returns. margin_quality: Gross margin is 45.9% (¥1,962.963m/¥4,279m), indicating a high-value mix. Operating margin is ~6.4% (¥272m/¥4,279m), stable YoY given operating income growth (+25.7%) matched revenue growth (+25.4%). Net margin at 8.93% is elevated relative to operating margin due to a tax credit/benefit (income tax ¥-136.729m), which may not recur. operating_leverage: SG&A implied at ~¥1,690.963m (Gross profit minus operating income), or ~39.5% of revenue, suggests disciplined cost management alongside growth. Operating profit grew in line with revenue, signaling neutral operating leverage in the period.

Growth Assessment

revenue_sustainability: Revenue grew 25.4% YoY to ¥4,279m, reflecting strong demand and likely successful scaling of core services. Sustainability will depend on client acquisition/retention, cross-sell, and market growth in the company’s served verticals. profit_quality: Operating income growth (+25.7%) matched revenue growth, suggesting quality in underlying profit generation. However, net income growth (+167.6%) was materially aided by a tax benefit; excluding such effects, bottom-line momentum would be closer to operating income growth. outlook: With high gross margins and a scalable cost base, the company appears positioned to maintain mid- to high-teens ROE if margins hold and asset turnover improves. Key determinants include maintaining pricing/mix, controlling SG&A as a percent of sales, and normalizing working capital to support self-funded growth.

Financial Health

liquidity: Current ratio 241.0% and quick ratio 235.5% indicate ample short-term liquidity. Working capital stands at ¥2,341,378,000, offering a sizable buffer for operations. solvency: Debt-to-equity ratio is 1.01x, consistent with moderate leverage. Interest coverage is 16.9x (EBIT/interest), implying strong ability to service debt at current earnings. capital_structure: Total assets ¥6,528m and total liabilities ¥2,819.941m. Total equity disclosed at ¥2,800m, with an equity ratio field showing 0.0% (placeholder). The asset-liability-equity relationship suggests additional undisclosed components or classification differences; leverage should be assessed using the provided D/E and coverage ratios rather than the placeholder equity ratio.

Cash Flow Quality

earnings_quality: Net income of ¥382m contrasts with operating cash flow of ¥-688m (OCF/NI = -1.80), indicating earnings not yet converting to cash, likely due to working capital expansion during growth. FCF_analysis: Investing cash flow and depreciation/amortization were not disclosed in the dataset, and the presented Free Cash Flow metric is a placeholder. As a result, true FCF cannot be derived; however, negative OCF combined with financing inflows of ¥990m suggests the company is funding growth and working capital externally in the half. working_capital: Inventories of ¥91m are small relative to revenue; the OCF shortfall likely stems from receivables and other current asset changes not itemized here. Monitoring DSO/DPO trends and contract billing terms will be critical to cash conversion.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0.00 and payout ratio is shown as 0.0%, consistent with a reinvestment stance. Given negative OCF this half, conserving cash is prudent. FCF_coverage: FCF coverage cannot be assessed due to unreported investing cash flows and capex detail. On available data, distributions would not be covered by OCF in this period. policy_outlook: With growth investment needs and reliance on financing inflows this half, a conservative dividend policy is likely to persist until cash conversion normalizes and sustainable FCF is evidenced.

Risk Assessment

Business Risks:

• Revenue growth concentration risk if dependent on a limited number of large clients or projects.
• Margin sensitivity to pricing, mix, and utilization as scale increases.
• Execution risk in onboarding and delivering larger or more complex contracts.
• Sector competition and technological shifts that could pressure pricing or require ongoing investment.
• Regulatory or compliance changes impacting service delivery in financial/technology-related activities.

Financial Risks:

• Negative operating cash flow requiring external financing in the half.
• Potential normalization of tax expense could lower net margins versus current period.
• Moderate leverage (D/E 1.01x) could become more sensitive if earnings soften.
• Working capital volatility affecting cash conversion and liquidity buffers.
• Data limitations on capex/intangibles create uncertainty around capital intensity and future amortization.

Key Concerns:

• Sustainability of net margin uplift driven by a non-recurring tax benefit.
• Timing and magnitude of operating cash flow normalization.
• Visibility into investment needs (capex/intangibles) and their returns.

Investment Implications

Key Takeaways:

• Topline growth robust at +25.4% YoY with stable operating margin (~6.4%).
• Net income strength inflated by negative tax; underlying profit growth aligns with operating profit.
• Cash conversion weak in the half (OCF/NI -1.80), implying working capital build.
• Liquidity strong (current ratio 241%) and interest coverage high (16.9x).
• Leverage moderate (D/E 1.01x), supported by financing inflow of ¥990m.
• High gross margin (45.9%) provides foundation for operating leverage as scale builds.

Metrics to Watch:

• Operating cash flow and cash conversion cycle (DSO/DPO/working capital).
• Operating margin trend versus SG&A ratio to sales.
• Recurring versus one-off tax impacts and normalized effective tax rate.
• Capex and intangible investments to gauge capital intensity and future amortization.
• Order intake/backlog or pipeline indicators supporting revenue visibility.
• Leverage and interest coverage as growth continues.

Relative Positioning: Based on the presented metrics, the company exhibits above-average growth and gross margins with moderate leverage, but trails best-in-class peers on near-term cash conversion due to working capital outflows; sustained execution that converts growth into cash would strengthen its relative standing.

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