JMDC Inc. FY2027 Q1 Earnings Report

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Executive Summary

The Company posted higher revenue and earnings for the quarter, with expansion of its core Health Big Data Business driving performance. Revenue was ¥126.0B (¥107.2B in the previous year, YoY +17.5%), Operating Income was ¥18.2B (¥15.5B in the previous year, YoY +17.5%), Profit Before Tax was ¥16.9B (¥14.4B in the previous year, YoY +17.1%), and consolidated Net Income was ¥11.3B (¥9.6B in the previous year, YoY +18.3%). The gross margin improved by +2.2pt to 53.5% from 51.3% in the previous year, while the SG&A expense ratio also increased to 39.4% from 37.0%. As a result, the Operating Income margin remained flat at 14.5%, at approximately the same level as the previous year.

Factors Affecting Performance

【Revenue】The Health Big Data Business drove overall growth, generating revenue of ¥109.5B (86.9% of total revenue, YoY +19.1%), while Telemedicine generated revenue of ¥16.5B (13.1% of total revenue, YoY +8.2%), representing moderate growth. Overall revenue growth of YoY +17.5% was primarily attributable to the expansion of the Health Big Data Business.

【Profit and Loss】The gross margin improved to 53.5% from 51.3% in the previous year, but the SG&A expense ratio increased to 39.4% from 37.0%, leaving the Operating Income margin essentially flat at 14.5%, broadly in line with the previous year (14.47%→14.46%). Financial income was ¥0.2B compared with financial expenses of ¥1.5B, resulting in a slight year-on-year increase in net financial expenses; however, Profit Before Tax expanded to ¥16.9B (YoY +17.1%). The effective tax rate declined slightly to 32.9% from 33.6% in the previous year, lifting the growth rate of Net Income to ¥11.3B (YoY +18.3%). No extraordinary gains or losses were identified, and recurring operating results were the main source of earnings growth. In conclusion, the Company achieved higher revenue and earnings.

Segment Analysis

Segment profit is calculated on an EBITDA basis. Health Big Data generated EBITDA of ¥22.5B (YoY +17.2%), with a margin of 20.5%, a slight decline of -0.3pt from 20.9% in the previous year. Telemedicine generated EBITDA of ¥6.5B (YoY +21.8%), with its margin improving to 39.6% from 35.2% in the previous year (+4.4pt). In terms of scale, Health Big Data accounts for the majority of consolidated revenue and profit, while Telemedicine, although smaller in scale, supports consolidated profitability through improved margins as a high-margin business.

Key Financial Indicators

【Profitability】The Operating Income margin was 14.5%, flat from 14.5% in the same period of the previous year, while the Net Income margin improved modestly to 9.0% from 8.9%. The gross margin improved by +2.2pt to 53.5% from 51.3% in the previous year, effectively absorbing the increase in the SG&A expense ratio to 39.4% from 37.0%.【Cash Quality】Operating Cash Flow (OCF) of ¥62.2B was approximately 5.5 times Net Income of ¥11.3B, indicating that cash-generating capacity substantially exceeded the level of reported profit.【Investment Efficiency】ROE was 1.4% (quarterly result). Revenue is relatively small compared with total assets of ¥1,540.6B, and low asset turnover is a constraint on capital efficiency.【Financial Soundness】The Equity Ratio was 53.9%, up +1.1pt from 52.8% in the previous year, and cash and cash equivalents stood at ¥307.8B. Meanwhile, goodwill amounted to ¥625.8B, representing 40.6% of total assets and constituting a notable feature of the asset structure.

Cash Flow Analysis

Operating Cash Flow was ¥62.2B, an increase of +15.8% year on year, representing the subtotal of ¥77.8B after deducting corporate income tax payments of ¥14.4B and interest payments of ¥1.3B. From a working capital perspective, the collection of trade receivables contributed ¥81.1B, while a decrease in trade payables (-¥15.5B) and an increase in contract assets (-¥8.4B) partially offset this contribution; contract liabilities increased by ¥2.8B. Investing Cash Flow was -¥9.7B, primarily comprising acquisitions of property, plant and equipment of -¥1.9B and acquisitions of intangible assets of -¥4.4B, indicating a restrained level of investment. Financing Cash Flow was -¥34.2B, mainly due to repayment of long-term borrowings of -¥20.4B (including ¥9.8B of new borrowings), dividend payments of -¥11.8B, and transactions with non-controlling interests of -¥8.3B. Free Cash Flow was ¥52.5B, sufficiently covering the combined ¥13.7B in dividend payments and capital expenditures during the quarter.

Quality of Earnings

Profit for the quarter was generated primarily by the core business, with non-operating items being minor on a net basis (financial expenses of ¥1.5B versus financial income of ¥0.2B), and no temporary factors equivalent to extraordinary gains or losses were identified. The effective tax rate was 32.9% (33.6% in the previous year), within a normal range. Comprehensive income was ¥10.3B (¥10.2B attributable to owners of the parent), slightly below Net Income of ¥11.3B, as other comprehensive income was negative ¥1.1B. This was primarily attributable to a valuation loss of ¥1.0B on financial assets measured at fair value through other comprehensive income, representing a market-related factor separate from operating results. Operating Cash Flow substantially exceeded Net Income, indicating strong cash generation supporting earnings from an accrual perspective.

Earnings Forecast and Guidance

Progress against the full-year forecast was 20.8% for Revenue (¥126.0B/¥605.0B), 15.9% for Operating Income (¥18.2B/¥115.0B), and 15.7% for Net Income (¥11.3B/¥72.0B), all below the 25% implied by a simple quarterly allocation. Although an earnings forecast revision was indicated for the quarter, no revision was made to the dividend forecast. Contract liabilities increased to ¥17.7B from ¥14.8B at the end of the previous fiscal year, suggesting that a certain amount of potential future revenue recognition has accumulated.

Shareholder Returns

Dividend payments during the quarter totaled ¥11.8B (¥10.4B in the same period of the previous year). These payments relate to the year-end dividend for the previous fiscal year and do not directly correspond to Net Income for the quarter; therefore, the Payout Ratio is not calculated on a single-quarter basis. Free Cash Flow of ¥52.5B substantially exceeded the quarter’s dividend payment of ¥11.8B, indicating that sufficient cash resources were available to fund the dividend. No share repurchases were identified during the quarter.

Risk Factors

1. Goodwill concentration risk: Goodwill amounted to ¥625.8B, representing 40.6% of total assets and approximately 75.2% of net assets. This asset has accumulated through M&A and is large enough to be subject to impairment assessment if profitability declines in the future.

2. Business concentration risk: The Company relies on the Health Big Data Business for 86.9% of revenue, making its business structure susceptible to fluctuations in demand and the effects of the contract structure of a single business segment.

3. Working capital volatility: Trade receivables and notes receivable amounted to ¥159.1B (a significant decrease from ¥240.2B in the same period of the previous year), reflecting progress in collections. Meanwhile, contract assets increased to ¥8.9B from ¥0.5B at the end of the previous fiscal year, creating a structure in which cash flow is susceptible to fluctuations depending on the timing of revenue recognition and billing terms.

Industry Benchmark (Reference; Compiled by the Company)

Industry Benchmark (it_telecom)

Profitability and Return

Both the Operating Income margin and Net Income margin exceed the industry median, placing the Company in the high-profitability group within the industry.

Growth and Capital Efficiency

The Revenue growth rate also exceeds the industry median and is close to the upper bound of the IQR, placing the Company in the high-growth group within the industry.

※Source: Compiled by the Company

Key Takeaways from the Earnings Results

1. The gross margin improved by +2.2pt year on year, but the SG&A expense ratio also increased by +2.4pt, leaving the Operating Income margin at 14.5%, broadly unchanged from the previous year. The key focus going forward is whether revenue growth can translate directly into margin improvement.

2. Full-year progress was 20.8% for Revenue and 15.9% for Operating Income, below the 25% implied by a simple allocation. However, contract liabilities increased from the end of the previous fiscal year, suggesting potential for revenue recognition in the second half.

3. Goodwill represents 40.6% of total assets and 75.2% of net assets, making this a structural feature of the asset base that warrants continued monitoring.

Theoretical Share Price (Reference Value)

This is a reference range mechanically calculated solely from publicly disclosed data using a residual income model (Ohlson-type, explicit 5-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.

Sensitivity: ¥1,205–¥1,275 at ±1% for the cost of equity, and ¥1,238–¥1,240 at ±0.1 for ω.

Notes:

• Because forecast ROE is below the cost of equity, the theoretical value is below book value per share.
• Goodwill represents a high proportion of net assets, and the assumptions would change significantly if impairment were recognized.
• Net assets as of the end of the quarter are used (there is a timing difference from the full-year forecast).

(Calculation model: Residual Income Model / Interest rate reference month: 2026-07 / This value does not forecast or guarantee the future share price)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmark is reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting a professional advisor as necessary.

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