True Data Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥867M
• Operating Income: ¥42M
• Net Income: ¥37M
• EPS: ¥7.65

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

True Data (44160) reported FY2026 Q2 standalone results under JGAAP with steady top-line growth and improving bottom-line conversion. Revenue was 867 million yen, up 13.0% YoY, indicating solid demand for its data/analytics offerings. Operating income was 42 million yen, up 10.2% YoY, with an operating margin of about 4.8%, suggesting modest operating leverage but also ongoing cost investments. Ordinary income reached 47 million yen and net income was 37 million yen, surging 494.6% YoY off a low base, translating to an estimated net margin of 4.27%. Gross profit was disclosed at 440.7 million yen, implying a 50.8% gross margin, which is healthy for a data platform/services model; note that the disclosed cost of sales figure appears lower than implied by the gross margin, likely reflecting classification/timing differences. Cash generation was strong: operating cash flow (OCF) of 88.5 million yen was 2.39x net income, indicating high earnings quality and favorable working-capital dynamics. The balance sheet is conservative with total assets of 1.39 billion yen and total equity of 1.12 billion yen, implying an equity ratio of roughly 80.6% (the 0.0% equity ratio shown should be treated as undisclosed). Liquidity is ample: current assets of 1.14 billion yen versus current liabilities of 278 million yen yield a current ratio of about 4.1x and sizable working capital of 864 million yen. Leverage is low with total liabilities of 282 million yen (debt-to-equity of about 0.25x), and interest expense was negligible at 47 thousand yen, producing essentially unconstrained interest coverage. EBITDA was 61.4 million yen, giving an EBITDA margin of roughly 7.1%, reflecting room for operating scale benefits as the company grows. The tax line of 5.8 million yen implies an effective tax rate in the low-teens (around 13–14%), not 0.0% as shown in the metrics block. Free cash flow could not be assessed because investing cash flows were not disclosed; however, positive OCF suggests underlying capacity to self-fund absent heavy capex. DPS and payout ratio were not disclosed; coupled with growth investments and modest profitability, retained earnings likely remain a priority. Per-share data is partially unavailable; however, EPS of 7.65 yen implies roughly 4.8 million shares outstanding. Overall, the company exhibits healthy growth, strong cash conversion, conservative capitalization, and optionality to invest, with the main watchpoints being margin expansion pace and visibility on capex/intangibles. Data limitations (undisclosed items shown as zero) constrain full FCF and shareholder return analysis, but the available non-zero datapoints support a picture of improving fundamentals.

Profitability Analysis

ROE is estimated at 3.30% per the provided DuPont set, decomposed into a net margin of 4.27%, asset turnover of 0.624x, and financial leverage of 1.24x. This indicates that ROE is currently driven more by margin and turnover than by leverage, consistent with a conservative balance sheet. The operating margin stands near 4.8% (42 million yen OI on 867 million yen revenue), with ordinary margin around 5.4% and net margin 4.27%, suggesting modest but positive operating efficiency. Gross margin of 50.8% is healthy for a data/analytics model, supporting a path to operating margin expansion if fixed costs scale. The slight gap between revenue growth (+13.0% YoY) and operating income growth (+10.2% YoY) indicates limited operating leverage this period, likely due to higher SG&A or growth investments. EBITDA of 61.4 million yen (7.1% margin) provides a buffer above operating income, with D&A of 19.4 million yen suggesting moderate capital intensity or past software capitalization amortization. Interest expense was de minimis (47 thousand yen), giving effectively unconstrained coverage and minimal drag on ordinary income. The reported cost of sales (326.6 million yen) and gross profit (440.7 million yen) are internally inconsistent; based on the disclosed gross margin, implied cost of sales would be approximately 426–427 million yen, so margin interpretation should rely on the stated gross margin percentage. Overall profitability is improving but still in early scaling phase, with structural gross margins underpinning potential operating leverage as the revenue base expands.

Growth Assessment

Revenue growth of 13.0% YoY to 867 million yen indicates sustained demand and successful sales execution in the core data analytics businesses. Operating income growth of 10.2% YoY lagged revenue, suggesting incremental costs (sales capacity, product development, or data procurement) partially offset scale benefits. Net income jumped 494.6% YoY, likely from a low prior-year base and improved non-operating items; sustainability should be judged on operating metrics rather than the outsized headline growth. The gross margin of 50.8% supports a scalable model with potential for operating leverage as fixed costs are absorbed over a larger revenue base. Asset turnover of 0.624x is moderate and may reflect a high cash/current asset buffer; efficiency could improve as growth deploys balance sheet resources. Forward-looking growth will hinge on new client wins, upselling analytics modules, and maintaining low churn; the strong OCF suggests customer prepayments or favorable collections that can fund expansion. Clarity on product pipeline, partner channels, and contract mix (subscription vs. project) would refine sustainability assessment. While capex and intangible investment were not disclosed this period, prior D&A of 19.4 million yen implies ongoing product investment cadence. Near-term outlook: continued mid-teens revenue growth with a focus on stabilizing operating margins, contingent on cost discipline and sales productivity.

Financial Health

Total assets were 1.39 billion yen with total equity of 1.12 billion yen, implying an equity ratio of approximately 80.6% (the listed 0.0% is not reflective of the balance sheet). Total liabilities of 281.8 million yen produce a low debt-to-equity of about 0.25x, indicating low leverage. Liquidity is strong: current assets of 1,142.3 million yen vs. current liabilities of 278.0 million yen result in a current ratio of roughly 4.1x and ample working capital of 864.3 million yen. Quick ratio is effectively the same given no inventories were disclosed. Interest burden is negligible (47 thousand yen), and implied interest coverage is extremely high, minimizing solvency risk. The capital structure is equity-heavy, affording flexibility to invest without balance sheet strain. No material refinancing or covenant risks are apparent from the disclosed items.

Cash Flow Quality

Operating cash flow of 88.5 million yen equals 2.39x net income (37 million yen), indicating strong cash conversion and solid earnings quality. The high OCF/NI ratio may reflect favorable working-capital movements such as higher collections or upfront billings; monitoring deferred revenue and receivables would clarify the drivers. D&A of 19.4 million yen supports the bridge from operating to cash earnings and suggests moderate capital intensity. Investing cash flows were not disclosed (shown as zero), so free cash flow cannot be determined from the provided data; the reported FCF of zero should be treated as undisclosed rather than an actual zero. Given positive OCF, FCF is likely positive in the absence of large capex or capitalized development, but visibility is limited. Financing cash flow was an outflow of 17.7 million yen, potentially reflecting lease repayments or minor equity-related cash movements (details not disclosed). Overall, cash flow quality is strong on the operating side, with the key gap being the lack of investing cash flow disclosure to fully assess sustainable FCF.

Dividend Sustainability

Dividend per share (DPS) and payout ratio are shown as 0.00, which should be treated as undisclosed for this period. With net income of 37 million yen and strong OCF, the company has capacity to consider distributions; however, the current phase appears focused on reinvestment and scale, given modest operating margins. Absent disclosed capex/intangibles and a formal dividend policy, free cash flow coverage of dividends cannot be assessed. If DPS were to be initiated or resumed, sustainability would depend on maintaining positive OCF after growth investments and preserving the strong balance sheet. Policy outlook remains unclear without management guidance; retained earnings to fund growth is a reasonable near-term assumption given the profitability profile.

Risk Assessment

Business Risks:

• Customer concentration risk typical of B2B analytics providers
• Contract renewal and churn risk affecting recurring revenue visibility
• Competitive intensity from larger domestic/global analytics and data platforms
• Data privacy, compliance, and data sourcing risks
• Execution risk in scaling sales capacity and partner channels
• Pricing pressure and procurement cycles among retail/CPG clients
• Project mix risk (subscription vs. non-recurring services)

Financial Risks:

• Potential margin pressure from increased data procurement or cloud costs
• Uncertainty around capex/intangible investments due to undisclosed investing CF
• Small-cap liquidity and share price volatility
• Working capital swings if billing terms or collections change

Key Concerns:

• Limited visibility on free cash flow due to undisclosed investing cash flows
• Modest operating margin despite healthy gross margin, implying need for tighter cost control or greater scale
• Inconsistency between disclosed cost of sales and gross profit suggests classification/timing differences that need clarification

Investment Implications

Key Takeaways:

• Healthy top-line growth (+13% YoY) with improving but modest profitability (OPM ~4.8%)
• Strong operating cash conversion (OCF/NI 2.39x) supports reinvestment capacity
• Conservative balance sheet (equity ratio ~80.6%, D/E ~0.25x) limits financial risk
• Gross margin of 50.8% underpins potential operating leverage as scale increases
• Visibility on capex/intangibles and investing CF is the main missing piece for full FCF assessment

Metrics to Watch:

• Operating margin progression and EBITDA margin expansion
• Deferred revenue and accounts receivable trends to gauge cash conversion durability
• Capex/intangible additions and resulting free cash flow
• Customer concentration and renewal rates (churn, net retention)
• AR days and working capital turns
• Headcount and SG&A per revenue to monitor operating leverage

Relative Positioning: Within Japan’s data/analytics space, True Data appears to combine healthy gross margins and strong cash conversion with a conservative capital structure, positioning it as a disciplined grower; however, operating margins remain modest versus best-in-class peers, and disclosure gaps on investing flows temper FCF visibility.

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