| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥504.6B | ¥417.2B | +20.9% |
| Operating Income | ¥105.2B | ¥87.2B | +20.7% |
| Profit Before Tax | ¥99.6B | ¥85.1B | +17.1% |
| Net Income | ¥68.1B | ¥73.8B | -7.7% |
| ROE | 8.1% | 9.4% | - |
For the fiscal year ended March 2026, Revenue was ¥504.6B (¥+87.4B YoY, +20.9%), and Operating Income was ¥105.2B (¥+18.0B YoY, +20.7%), maintaining double-digit growth. Ordinary Income was ¥19.6B (¥-1.8B YoY, -8.1%), and Net Income was ¥68.1B (¥-5.7B YoY, -7.7%), reflecting a decline. However, the prior year included ¥14.5B of profit from a discontinued operation (pharmacy support business); on a continuing-operations basis, Net Income was ¥67.7B (prior year ¥58.2B), a +16.3% increase. The operating margin remained high at 20.8%. The Healthcare Big Data segment acted as the growth driver, accounting for 87.3% of Revenue and expanding with +23.8% revenue growth and +22.7% operating income growth.
[Revenue] Revenue grew to ¥504.6B (+20.9%), continuing high growth. By segment, Healthcare Big Data recorded ¥440.7B (+23.8%), representing 87.3% of the total, driven by expanding demand for medical databases and analytics services. TeleMedicine recorded ¥63.9B (+4.5%)—single-digit growth but stable expansion supported by high value-added remote reading services. The prior-year discontinued operation (pharmacy support) was excluded from the current period, making comparisons consistent on a continuing-operations basis. Geographically, domestic operations accounted for over 90%, with domestic healthcare data demand being the core growth axis.
[Profitability] Gross profit was ¥276.9B (gross margin 54.9%), down -2.3pt from 57.2% in the prior year. This likely reflects changes in sales mix and cost structure. SG&A was ¥177.1B (SG&A ratio 35.1%), improving -2.4pt from 37.5% a year earlier, indicating scale economies and cost discipline. As a result, Operating Income was ¥105.2B (operating margin 20.8%, prior 20.9%), maintaining a high level almost flat year-on-year. Financial expenses increased to ¥6.5B (prior ¥2.2B), impacted by full-year effect of prior large financing and increased borrowings. Profit Before Tax was ¥99.6B (+17.1%); after deducting corporate taxes of ¥31.5B (effective tax rate 31.6%), continuing-operations profit for the period was ¥68.1B. Excluding the loss of discontinued operations, continuing operations were profitable on a revenue-and-profit increase basis, preserving the growth-with-profit trend.
The Healthcare Big Data segment posted Revenue of ¥440.7B (+23.8%) and Operating Income of ¥117.2B (+22.7%, margin 26.6%), achieving high growth in both sales and profits. Demand for medical database provision and big data analytics remained firm, with expansion across industry, payers, and providers. The TeleMedicine segment recorded Revenue of ¥63.9B (+4.5%) and Operating Income of ¥24.1B (+7.6%, margin 37.7%); growth is moderate but margins remain high, confirming the profitability of remote reading matching services. Both segments delivered operating profit growth, and segment profit total ¥141.3B (adjustments -¥36.1B) exceeds consolidated Operating Income of ¥105.2B, demonstrating the strength of the business base.
[Profitability] Operating margin remained high at 20.8% (prior 20.9%). ROE was 8.4%, down -1.4pt from 9.8% last year; the main drivers were the loss of prior-year discontinued-operation Net Income and higher financial expenses. Continuing-operations Net Margin was stable at 13.4% (prior-year continuing-operations only 13.9%). [Cash Quality] Operating Cash Flow (OCF) was ¥85.9B, 1.26x Net Income of ¥68.1B, indicating good cash conversion of profits; however, OCF/EBITDA (EBITDA approx. ¥131.8B) was 0.65x, declining due to working capital build-up (Accounts receivable increase -¥30.6B) and higher corporate tax payments of ¥41.8B. DSO (days sales outstanding) is approximately 174 days (Accounts receivable ¥240.2B ÷ daily sales ¥1.38B), showing a lengthening trend and room for cash conversion improvement. [Investment Efficiency] Capital expenditures were ¥5.8B vs. depreciation ¥32.0B, with Capex/Depreciation ratio 0.18x, indicating low tangible investment and a focus on M&A (subsidiary acquisitions ¥88.8B) and intangible asset purchases ¥14.7B. Total asset turnover improved slightly to 0.318x (prior 0.292x). [Financial Soundness] Equity Ratio was 52.8% (prior 54.6%) and interest-bearing debt was ¥414.98B (short-term ¥55.6B + long-term ¥359.4B). Debt/EBITDA was 3.15x (EBITDA approx. ¥131.8B), a moderate level. Interest coverage was about 16.3x (Operating Income ¥105.2B ÷ financial expenses ¥6.5B), indicating low interest burden. Current ratio was 227% (current assets ¥565.7B ÷ current liabilities ¥248.9B), and cash of ¥289.5B far exceeded short-term borrowings of ¥55.6B, indicating sufficient short-term liquidity.
Operating Cash Flow was ¥85.9B (prior ¥146.9B, -41.5%). From a pre-working-capital subtotal of ¥131.4B, corporate tax payments of ¥41.8B (prior ¥24.0B) and accounts receivable increase of ¥30.6B (prior-year collections +¥25.2B) were deducted. A decrease in contract liabilities of ¥9.2B (prior-year increase ¥15.8B) also reduced OCF. Accounts payable increase of ¥32.4B contributed positively, but overall working-capital build-up was the main driver of the OCF decline. Investing Cash Flow was -¥105.6B (prior -¥34.7B), primarily due to subsidiary acquisitions ¥88.8B and intangible asset acquisitions ¥14.7B. The prior year included ¥24.1B of proceeds from subsidiary sales, which did not recur this period, making investing activities a net outflow. Financing Cash Flow was -¥12.7B (prior +¥64.8B); while long-term borrowings raised ¥57.4B, repayments included short-term borrowings ¥0.1B, long-term borrowings ¥47.7B, lease liabilities ¥12.5B, and dividends paid ¥10.5B. Free Cash Flow was -¥19.6B (OCF ¥85.9B + investing CF -¥105.6B), insufficient to cover dividends of ¥10.5B, so the company funded the gap with cash on hand and financing. Cash balance declined to ¥289.5B (prior ¥321.8B), down ¥32.3B, but liquidity remains ample.
Operating Income of ¥105.2B versus Ordinary Income of ¥19.6B shows a large gap, driven by the absence this period of pretax profit from discontinued operations (prior ¥22.7B). Continuing-operations Profit Before Tax was ¥99.6B, broadly consistent with Operating Income after netting financial income ¥0.9B and financial expenses ¥6.5B (net -¥5.6B). The increase in financial expenses (¥2.2B → ¥6.5B) reflects full-year effect of prior large borrowings and additional financings this period. Other income ¥7.2B and other expenses ¥1.7B, together with equity-method income ¥0.0B, form recurring non-operating items. A temporary factor is that prior-year subsidiary sale gains of ¥24.1B may have been included in "other income," and the absence of that this period produces a one-off decline. Comprehensive income was ¥67.6B (parent company ¥67.1B), reflecting other comprehensive income -¥0.5B (FVOCI financial assets -¥0.5B, foreign currency translation differences -¥0.0B) and nearly matching Net Income. Accrual (Net Income - OCF) was -¥17.8B (¥68.1B - ¥85.9B), negative, indicating cash exceeded accounting profit and good accrual quality. Overall, continuing-operations earnings are recurring and sustainable; the loss of discontinued operations and higher financial expenses are temporary profit headwinds.
For FY2027 ending March 2027, guidance forecasts Revenue ¥605.0B (+19.9% YoY), Operating Income ¥115.0B (+9.3%), and Net Income ¥72.0B (+5.7%). Progress ratios (current period / full-year guidance) are high at Revenue 83.4%, Operating Income 91.5%, and Net Income 94.6%, indicating the full-year guidance has been substantially front-loaded by Q2 results. This high progress may suggest revenue recognition skewed to Q2 or temporary profit-increasing factors, but given no guidance revision, the company appears to expect continued solid performance for the full year. The operating margin guidance is 19.0% (¥115.0B ÷ ¥605.0B), down -1.8pt from the current period 20.8% but still high. Net Income guidance implies a +6.3% increase versus prior-year continuing-operations Net Income (¥67.7B), suggesting steady growth. EPS forecast is ¥108.19, up +4.6% from the current period ¥103.44, consistent with the profit increase assumption.
Year-end dividend was set at ¥18, making the annual dividend ¥18 (interim ¥0). Payout Ratio is 17.4% (total dividends ¥10.5B ÷ parent-attributable Net Income ¥67.7B), reflecting a conservative policy and prioritization of retained earnings for growth investment. No share buybacks were conducted; shareholder return consists solely of dividends. Free Cash Flow of -¥19.6B does not cover total dividends ¥10.5B, but with cash balance ¥289.5B and OCF generation capacity ¥85.9B, dividend sustainability is judged high. Given the low payout ratio, upside for future dividend increases is ample, but the company is expected to prioritize growth investments (M&A and intangibles) for the time being while maintaining stable dividends. Total Return Ratio equals the payout ratio at 17.4%.
Goodwill impairment risk: Goodwill of ¥625.7B accounts for 39.5% of total assets and 74.3% of net assets, making M&A-derived intangible value central to the capital structure. Debt/Goodwill ratio is 0.66x, meaning goodwill exceeds interest-bearing debt in scale; failure to meet business plans could result in impairment charges that materially erode Equity Ratio and Net Income. The current period likely uses impairment testing rather than amortization, but future declines in profitability or delayed integration of acquisitions could trigger impairment provisions.
Working capital stagnation risk: Accounts receivable of ¥240.2B (DSO approx. 174 days) is prolonged and growth-related receivables increases are pressuring OCF. Contract liabilities declined to ¥14.8B (prior ¥23.7B), indicating a shift from advance-payment models to post-billing, raising collection delay risk. Contract assets ¥0.5B are minimal, but if recognition-on-progress revenue and billing timing gaps widen, the cash conversion cycle may lengthen.
Segment concentration risk: Healthcare Big Data accounts for 87.3% of Revenue, indicating high dependence on a single segment. Regulatory changes affecting medical data utilization (strengthening of personal data protection laws, revisions to data-sharing guidelines) or increased customer bargaining power could depress segment-wide profitability. TeleMedicine retains high margins (37.7%) but shows slowing growth, making development of alternative growth drivers a priority.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Return on Equity | 8.4% | 10.1% (2.2%–17.8%) | -1.7pt |
| Operating Margin | 20.8% | 8.1% (3.6%–16.0%) | +12.7pt |
| Net Margin | 13.5% | 5.8% (1.2%–11.6%) | +7.7pt |
Operating and Net Margins significantly exceed industry medians, highlighting high profitability, while ROE is slightly below the median, indicating room to improve capital efficiency.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 20.9% | 10.1% (1.7%–20.2%) | +10.8pt |
Revenue growth outperforms the industry median by +10.8pt, positioning the company among high-growth peers.
※ Source: Company compilation
Expansion of healthcare data platform and sustained high profitability: The Healthcare Big Data segment represents 87.3% of Revenue and maintains a high operating margin of 26.6%. Structural expansion of demand for medical databases and analytics is expected, and achievement of the Rule of 40 (growth 20.9% + operating margin 20.8% = 41.7%) indicates a strong balance of growth and profitability. Continued new customer acquisition and ARPU enhancement via cross-sell can remain levers for growth.
Improving cash conversion is key to capital allocation: OCF of ¥85.9B equals 1.26x Net Income, indicating good cash realization, but OCF/EBITDA at 0.65x and prolonged DSO of approx. 174 days are challenges. The decline in contract liabilities suggests a shift to post-billing models; working-capital efficiency (shortening billing/collection cycles, revising contract terms) will determine cash generation. With Free Cash Flow at -¥19.6B, smoothing the M&A investment pace and improving working capital are conditions for expanding cash flexibility.
High goodwill ratio and sustainability of growth investments: Goodwill ¥625.7B (74.3% of net assets) reflects past aggressive M&A and requires steady execution of business plans to preserve capital value. The company continued growth investments with subsidiary acquisitions ¥88.8B this period, but Debt/EBITDA at 3.15x is in a moderate range, limiting scope for additional leverage. With a conservative payout ratio of 17.4% and continued focus on investment efficiency (acquired-company revenue & EBITDA growth, synergy realization), investment returns will be a medium- to long-term differentiator for shareholder value.
This report was automatically generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.