| Metric | Current Period | YoY | YoY |
|---|---|---|---|
| Revenue | ¥14.6B | ¥9.8B | +49.2% |
| Operating Income | ¥3.3B | ¥1.0B | +232.6% |
| Ordinary Income | ¥3.3B | ¥1.0B | +231.7% |
| Net Income | ¥2.9B | ¥1.0B | +178.7% |
| ROE | 5.1% | 1.9% | - |
FY2026 Q1 results delivered substantial top-line and bottom-line growth across all metrics: Revenue ¥14.6B (YoY +¥4.8B, +49.2%), Operating Income ¥3.3B (YoY +¥2.3B, +232.6%), Ordinary Income ¥3.3B (YoY +¥2.3B, +231.7%), and Net Income ¥2.9B (YoY +¥1.9B, +178.7%). Gross profit margin remained high at 73.5%, and the operating margin improved significantly to 22.8% (up +12.6pt from 10.2% in the prior-year period).
[Profitability] ROE 5.1% (improved from 2.8% in the prior-year period), Operating Margin 22.8% (up +12.6pt from 10.2% in the prior-year period), Net Margin 19.8% (up +9.2pt from 10.6% in the prior-year period), Gross Profit Margin 73.5%. [Cash Quality] Cash and Deposits ¥47.9B, Short-term Debt Coverage 2.2x. [Capital Efficiency] Asset Turnover 0.185x (annualized 0.74x). [Financial Soundness] Equity Ratio 71.5%, Current Ratio 331.1%, Debt-to-Equity Ratio 0.39x.
Cash and deposits increased by ¥0.9B YoY to ¥47.9B, maintaining ample liquidity. Retained earnings rose by ¥2.9B from ¥4.1B at the beginning of the period to ¥7.0B, indicating capital accumulation with the full amount of current net income retained internally. Cash coverage of short-term borrowings of ¥21.5B is 2.2x, indicating sufficient liquidity. Deposits received of ¥16.1B reflect a current liabilities structure aligned with business characteristics; however, given the larger cash balance, resilience against refund risk is high. Working capital is positive at ¥49.6B, maintaining a conservative funding structure with cash and deposits far exceeding accounts receivable of ¥5.8B.
Ordinary Income of ¥3.3B and Operating Income of ¥3.3B are nearly the same level, indicating a very limited impact from non-operating items. Non-operating income, including interest and dividends received, was ¥0.01B, and non-operating expenses were ¥0.01B, demonstrating that earnings are primarily driven by core operations. The effective tax rate on Net Income of ¥2.9B is approximately 13.3%, indicating a light tax burden. The operating margin of 22.8% reflects the difference between the gross profit margin of 73.5% and the SG&A ratio of 50.7%, confirming a high gross margin structure and disciplined SG&A control. While Operating Cash Flow is not disclosed, the increase in retained earnings nearly matches net income, indicating a clear accounting profit recognition process.
Dependence on a high gross margin structure poses a risk, as maintaining a gross profit margin of 73.5% underpins profitability; any decline in margin due to changes in product/service mix or price competition would have a significant impact on profits. Regarding refund risk on deposits received of ¥16.1B, monitoring is required for potential cash outflows from sudden cancellations or contract changes; however, short-term payment capacity is secured with cash holdings of ¥47.9B. Asset turnover is low at 0.185x; if sales generation relative to total assets of ¥79.2B does not improve, enhancement of capital efficiency will be limited. The Full Year forecast embeds a decline in profits from Q2 onward, with Operating Income of 400百万円 (Q1 progress rate 83.4%), warranting attention to potential seasonality and cost increases.
[Position within Industry] (Reference information; in-house research) The company’s Operating Margin of 22.8% has improved significantly from 10.2% in the prior-year period, confirming a trend of profitability enhancement. ROE at 5.1% has improved from 2.8% in the prior-year period; however, the absolute level remains low compared to general profitability benchmarks, suggesting room for improvement in capital efficiency. The revenue growth rate of 49.2% indicates high growth, but the asset turnover of 0.185x is at a level requiring improvement from an asset efficiency perspective. The Equity Ratio of 71.5% indicates a conservative financial structure and high financial soundness. Versus historical results, both the operating margin and net margin reached record levels in FY2026 Q1, showing a pronounced improvement in earnings quality.
Key takeaways include: first, the sustained high gross profit margin of 73.5% and the significant improvement in the operating margin to 22.8%, quantitatively demonstrating improved earnings quality driven by a higher mix of high-margin products/services and SG&A control. Second, the ratio of cash and deposits of ¥47.9B to total assets of ¥79.2B stands at 60.5%, indicating abundant liquidity, and under a no-dividend policy, a conservative capital policy prioritizing internal reserves continues. Third, versus the Full Year forecast, with Operating Income of 400百万円 and Q1 at ¥3.3B (progress rate 83.4%), earnings appear front-loaded, suggesting the importance of monitoring earnings trends and cost progression from Q2 onward.
This report is an earnings analysis document automatically generated by AI based on XBRL financial summary data. It does not constitute a recommendation to invest in any particular security. The industry benchmark is reference information compiled by our company based on publicly available financial statements. Investment decisions are your own responsibility; consult a professional as needed before making any decisions.