MINKABU THE INFONOID,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥4.30B
• Operating Income: ¥201M
• Net Income: ¥-294M
• EPS: ¥11.87

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

MINKABU THE INFONOID (TSE:44360) reported FY2026 Q2 consolidated results under JGAAP with revenue of ¥4.30bn, down 9.1% YoY, indicating a top-line contraction in the period. Despite the revenue decline, operating income held flat YoY at ¥201m, suggesting meaningful cost discipline and/or a favorable mix shift. Gross profit of ¥2.08bn implies a solid gross margin of 48.3%, underscoring the structural profitability of the business model even with softer sales. EBITDA was ¥643m (14.9% margin), supported by sizeable depreciation and amortization of ¥442m, indicating a capital/asset base with meaningful amortization, likely from software and intangibles. Ordinary income of ¥126m fell below operating income, reflecting non-operating costs (including ¥38.6m interest expense) and other items. Net income was ¥179m with an effective tax rate essentially 0%, implying the presence of tax loss carryforwards and/or extraordinary/non-operating gains that offset tax, or timing effects. DuPont analysis shows a reported ROE of 20.29%, driven by modest net margin (4.16%), relatively low asset turnover (0.434x), and very high financial leverage (11.22x). The high leverage arises from a small equity base (¥0.88bn) against total assets of ¥9.90bn, magnifying returns but also elevating financial risk. Liquidity is tight with a current ratio of 46.6% and negative working capital of approximately ¥2.34bn, showing reliance on short-term funding and/or prepayments/contract liabilities. Operating cash flow was negative at ¥618m, resulting in an OCF/Net Income ratio of -3.45, flagging weak cash conversion this period due to working capital outflows or receivable build. Interest coverage remains adequate at 5.2x on an operating basis, but cushion could diminish if operating earnings soften. The company reported no dividends (DPS ¥0; payout 0%), which is consistent with the need to preserve liquidity given negative OCF. Several items are unreported in XBRL (e.g., cash and equivalents, investing CF), so certain ratios (equity ratio, FCF) are not fully assessable; zeros should be treated as undisclosed, not true zero values. Overall, the quarter shows resilient operating profit amid revenue pressure, but cash flow and liquidity are the key watchpoints given high leverage and negative OCF. Continued discipline on costs and stabilization of top-line momentum will be important to sustain earnings quality and protect balance sheet flexibility.

Profitability Analysis

roe_decomposition: ROE 20.29% = Net margin 4.16% × Asset turnover 0.434 × Financial leverage 11.22. The ROE is primarily leverage-driven rather than margin or turnover, reflecting a thin equity base. margin_quality: Gross margin is strong at 48.3% (gross profit ¥2,078m on revenue ¥4,299m). Operating margin is ~4.7% (¥201m/¥4,299m), with EBITDA margin at 14.9%. The drop from gross to operating margin reflects opex intensity and substantial D&A (¥442m). Net margin of 4.16% benefits from very low taxes and likely non-recurring/non-operating effects. operating_leverage: Operating income was flat YoY despite a 9.1% revenue decline, indicating positive operating leverage management via cost control or mix, though sustainability is uncertain if revenue pressure persists.

Growth Assessment

revenue_sustainability: Revenue decreased 9.1% YoY to ¥4.30bn, signaling softness in demand or contract timing/mix. Absent segment disclosure, sustainability is unclear; stabilization is needed to prevent further margin pressure. profit_quality: Operating profit stability despite sales decline suggests cost actions or higher-margin contributions, but reliance on very low taxes and non-operating items to reach net profit of ¥179m tempers quality. Ordinary income (¥126m) below operating income points to recurring financing burden. outlook: Near-term outlook hinges on reaccelerating sales and normalizing cash conversion. If revenue stabilizes and working capital normalizes, profitability can be maintained; otherwise, tight liquidity and leverage may constrain growth investments.

Financial Health

liquidity: Current assets ¥2,039m vs current liabilities ¥4,376m yields a current ratio of 46.6% and negative working capital of about ¥2,337m, indicating reliance on short-term funding or favorable payment terms. Quick ratio mirrors current ratio given no inventory reported. solvency: Total liabilities ¥9,662m vs equity ¥882m implies debt-to-equity of 10.96x and financial leverage of 11.22x. Interest coverage at ~5.2x is acceptable but sensitive to earnings fluctuations. capital_structure: Equity base is small relative to assets (high leverage). Equity ratio was not disclosed (reported as 0% in the data), so we rely on liabilities/equity measures for solvency inference.

Cash Flow Quality

earnings_quality: OCF/Net Income is -3.45, pointing to weak earnings-to-cash conversion this period, likely due to working capital outflows or timing effects. Net income benefits from a near-zero effective tax rate. fcf_analysis: Investing CF and cash balance are undisclosed (reported as 0), so Free Cash Flow cannot be reliably computed; the provided FCF value should be treated as not available. Given negative OCF, underlying FCF likely negative unless offset by asset disposals or minimal capex. working_capital: Negative working capital (approximately -¥2.34bn) and negative OCF suggest increases in receivables or reductions in payables/prepayments. Further disclosure is needed to pinpoint drivers.

Dividend Sustainability

payout_ratio_assessment: No dividend (DPS ¥0; payout 0%). With net income positive but OCF negative, initiating or increasing dividends would be challenging without improved cash generation. fcf_coverage: FCF is not assessable due to undisclosed investing CF; however, negative OCF indicates insufficient coverage for distributions in the period. policy_outlook: Given high leverage and liquidity constraints, maintaining a conservative dividend stance is consistent with balance sheet preservation until cash flow stabilizes.

Risk Assessment

Business Risks:

• Revenue decline (-9.1% YoY) indicating demand softness or contract timing/mix risk
• Dependence on maintaining high gross margins (48.3%) to offset opex and D&A
• Potential client concentration or cyclical advertising/data-related exposure (industry-driven)
• Execution risk in cost control to sustain operating profit amid top-line pressure

Financial Risks:

• High leverage (Debt-to-equity 10.96x; financial leverage 11.22x)
• Tight liquidity (current ratio 46.6%; negative working capital ~¥2.34bn)
• Negative operating cash flow (¥-618m) and weak cash conversion (OCF/NI -3.45)
• Earnings sensitivity to non-operating items and low tax rate sustainability
• Refinancing/interest rate risk given interest burden (¥38.6m) and 5.2x coverage

Key Concerns:

• Sustained negative OCF could pressure operations and covenants
• Further revenue declines could compress margins and reduce interest coverage
• Limited equity buffer increases vulnerability to shocks

Investment Implications

Key Takeaways:

• Top line contracted 9.1% YoY to ¥4.30bn, but operating profit was held flat at ¥201m
• Gross margin remains robust at 48.3%, supporting EBITDA margin of 14.9%
• ROE of 20.29% is leverage-driven; equity base is small relative to assets
• Liquidity is tight with a 46.6% current ratio and ~¥2.34bn negative working capital
• OCF is negative (¥-618m), indicating weak cash conversion in this period
• Interest coverage at 5.2x is acceptable but could deteriorate if earnings soften

Metrics to Watch:

• Quarterly OCF and changes in receivables/payables (working capital movements)
• Revenue trajectory and backlog/renewal rates to gauge recovery
• EBITDA and operating margin trend versus D&A burden
• Ordinary income vs operating income gap (financing and other non-operating impacts)
• Leverage metrics (net debt/EBITDA when debt and cash are disclosed) and interest coverage
• Equity base development (retained earnings) and any capital measures

Relative Positioning: Within Japan-listed information/services peers, profitability at the gross and EBITDA level appears competitive, but cash flow conversion, liquidity headroom, and leverage are weaker than typical mid-cap peers that operate with positive OCF and lower balance-sheet gearing.

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