FUJI MEDIA HOLDINGS,INC. FY2027 Q1 Earnings Report

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Executive Summary

In Q1, the Company delivered a significant increase in profit, reversing the operating and ordinary losses recorded in the same period of the previous year, with the recovery of the Media and Content Business driving performance. Revenue was ¥1,488.4B (¥1,161.4B in the previous year, YoY+28.2%), Operating Income was ¥160.2B (¥-127.8B in the previous year, YoY+225.4%), and Ordinary Income was ¥173.6B (¥-106.6B in the previous year, YoY+263.0%). Consolidated Net Income, including the portion attributable to non-controlling interests, was ¥104.3B (¥12.1B in the previous year, YoY+762.0%). Of this amount, Quarterly Net Income Attributable to Owners of the Parent was ¥102.2B (¥10.8B in the previous year, YoY+848.4%), and Quarterly Net Income per Share was ¥71.74 (¥5.19 in the previous year). The primary factors behind the increase in profit were the effect of operating leverage resulting from a substantial improvement in the gross profit margin (31.3%, +20.3pt year on year) and a decline in the SG&A expense ratio (20.5%, -1.5pt year on year).

Factors Affecting Performance

【Revenue】Revenue increased 28.2% YoY to ¥1,488.4B. The primary driver was growth in the Media and Content Business, which generated revenue of ¥1,016.6B (66.2% of total segment revenue), up YoY+52.4%, leading company-wide growth. The Urban Development and Tourism Business recorded revenue of ¥450.9B, down YoY-4.7%, while Other Businesses generated ¥67.1B, up YoY+3.2%.

【Profit and Loss】Operating Income was ¥160.2B, turning profitable from -¥127.8B in the same period of the previous year. The gross profit margin improved to 31.3% (10.97% in the previous year), while the SG&A expense ratio declined to 20.5% (21.97% in the previous year), with improvements in the cost structure supporting the recovery in profit. By segment, Operating Income in the Media and Content Business was ¥90.2B (YoY+144.2%, margin 8.9%), leading the return to profitability, while the Urban Development and Tourism Business declined to ¥74.4B (YoY-11.0%) but maintained a high margin of 16.5%. Ordinary Income was ¥173.6B, supported by non-operating income, including dividend income of ¥25.5B, while interest expense increased to ¥17.6B (¥7.3B in the previous year). Quarterly Net Income Attributable to Owners of the Parent was ¥102.2B, with the difference from Ordinary Income reflecting an effective tax rate of 37.9%. The Company achieved both revenue and profit growth, with improvements in the cost structure leading the recovery in profit.

Segment Analysis

The Media and Content Business recorded revenue of ¥1,016.6B (YoY+52.4%) and Operating Income of ¥90.2B (YoY+144.2%, margin 8.9%, improved from 5.9% in the previous year), with the recovery in advertising and content revenue leading the Company’s return to profitability. The Urban Development and Tourism Business recorded revenue of ¥450.9B (YoY-4.7%) and Operating Income of ¥74.4B (YoY-11.0%), resulting in lower revenue and profit, but maintained a margin of 16.5%, higher than those of the other segments. Other Businesses generated revenue of ¥67.1B (YoY+3.2%) and Operating Income of ¥3.7B (YoY+6.9%, margin 5.6%), remaining stable despite its small scale. The Media and Content Business accounted for 66.2% of segment revenue, indicating that the business portfolio has a high degree of dependence on the Media Business.

Key Financial Indicators

【Profitability】The Operating Income margin improved substantially to 10.8% from -11.0% in the same period of the previous year, while the Net Income margin, on a consolidated basis and including the portion attributable to non-controlling interests, increased by +6.0pt to 7.0% (1.0% in the previous year). ROE, based on Quarterly Net Income Attributable to Owners of the Parent, was 1.9%, improving from 0.2% in the same period of the previous year, although its absolute level remains low on a quarterly basis.【Cash Quality】Based on notes and accounts receivable of ¥925.5B, inventories of ¥824.8B, and accounts payable of ¥382.7B, days sales outstanding are approximately 57 days, inventory turnover days are approximately 73 days, and days payable outstanding are approximately 34 days, resulting in a cash conversion cycle of approximately 96 days. The increase in revenue has resulted in a certain degree of funds being tied up in working capital.【Investment Efficiency】Quarterly total asset turnover was 0.102x. The asset composition, in which property, plant and equipment of ¥6,383.5B accounts for 43.9% of total assets, is constraining asset efficiency.【Financial Soundness】The Equity Ratio was 38.1%, improving by +0.8pt from 37.3% in the same period of the previous year. Interest-bearing debt was ¥6,487.1B, equivalent to 1.17x equity of ¥5,541.4B (capital based on total assets), while the interest coverage ratio was 9.1x, indicating that resilience to interest expense remains intact. Meanwhile, the current ratio was 85.2% and the quick ratio was 65.9%. Short-term borrowings of ¥3,174.8B exceeded the combined total of cash and deposits of ¥808.5B and short-term investment securities of ¥606.1B, placing short-term funding conditions at a level requiring monitoring.

Cash Flow Analysis

Cash and deposits were ¥808.5B, a decrease of ¥34.2B from ¥842.7B in the same period of the previous year. Property, plant and equipment was ¥6,383.5B, an increase of ¥224.4B (+3.6%) from ¥6,159.1B in the same period of the previous year. Land accounted for ¥4,013.0B, an increase of ¥127.2B, indicating that investment activities are continuing. In terms of financing, short-term borrowings increased to ¥3,174.8B from ¥2,775.8B in the same period of the previous year, an increase of ¥399.1B (+14.4%), while long-term borrowings declined to ¥3,092.3B from ¥3,155.6B, a decrease of ¥63.3B, indicating a trend toward shorter-term financing. The Company appears to be funding investment in asset expansion with short-term borrowings, making the rollover status of short-term borrowings an important focus for future funding management.

Earnings Quality

Non-operating income was ¥33.9B (2.3% of revenue), primarily consisting of dividend income of ¥25.5B, and remained approximately at the same level as ¥24.6B in the same period of the previous year, indicating stability as a recurring source of income. Non-operating expenses of ¥20.5B consisted mainly of interest expense of ¥17.6B, which increased from ¥7.3B in the same period of the previous year, reflecting the increase in short-term borrowings. Extraordinary income of ¥2.9B, including a gain on sales of investment securities of ¥2.7B, and extraordinary losses of ¥8.5B resulted in a minor net amount of -¥5.6B. This contrasts with the previous year, when a one-off gain on sales of investment securities of ¥216.4B substantially increased non-recurring income. The effective tax rate was 37.9% (income taxes of ¥63.7B / profit before tax of ¥168.0B), and the difference between Ordinary Income of ¥173.6B and Quarterly Net Income Attributable to Owners of the Parent of ¥102.2B was primarily attributable to the tax burden. While the improvement in profit in the same period of the previous year was highly dependent on gains on sales of investment securities, the current period was centered on a fundamental improvement based on the recovery in Operating Income. Accordingly, earnings quality can be assessed as having improved from the same period of the previous year. Comprehensive income was ¥73.3B (¥70.7B attributable to owners of the parent), and the difference from Net Income of ¥102.2B was primarily due to changes in the valuation of available-for-sale securities, including a valuation difference on securities of -¥38.9B.

Earnings Forecast and Guidance

Progress against the Full-Year plan was 23.8% for revenue (¥1,488.4B / ¥6,257.0B), 40.0% for Operating Income (¥160.2B / ¥401.0B), 45.3% for Ordinary Income (¥173.6B / ¥383.0B), and 39.2% for Net Income, based on Net Income Attributable to Owners of the Parent (¥102.2B against the Full-Year plan of ¥261.0B). Revenue progress was slightly below a simple one-quarter benchmark of 25%, while progress for Operating Income, Ordinary Income, and Net Income exceeded that level, indicating that profitability improvements are advancing at a pace faster than planned. No revisions were made to the earnings forecast or dividend forecast in Q1.

Shareholder Returns

The Full-Year dividend forecast is ¥200 per share, and the Company has not revised its dividend forecast as of the current quarter. Based on the Full-Year EPS forecast of ¥183.23, the Payout Ratio is approximately 109.1%, meaning that the plan assumes dividends exceeding Net Income for the current period. Q1 EPS was ¥71.74, representing progress of 39.2% against the Full-Year forecast. If the current pace of profit growth continues, the relationship between dividends and profit may improve. However, given the liquidity structure of cash and deposits of ¥808.5B against short-term borrowings of ¥3,174.8B, a plan with a Payout Ratio exceeding 100% is at a level that needs to be supported by internal funds or improvements in asset efficiency, and monitoring is warranted.

Risk Factors

1. Business Segment Concentration Risk: Revenue from the Media and Content Business was ¥1,016.6B, accounting for 66.2% of total segment revenue, resulting in high sensitivity of company-wide performance to fluctuations in advertising market conditions in this business.

2. Short-Term Liquidity Risk: The current ratio was 85.2% and the quick ratio was 65.9%. Short-term borrowings of ¥3,174.8B exceeded the combined total of cash and deposits of ¥808.5B and short-term investment securities of ¥606.1B, or ¥1,414.6B, indicating a relatively high dependence on short-term funding.

3. Financial Flexibility Risk Associated with a High Payout Ratio: The Full-Year dividend forecast of ¥200 results in a Payout Ratio of approximately 109.1% against the Full-Year EPS forecast of ¥183.23. If the earnings plan falls short, support from retained earnings or improvements in asset efficiency will be required.

Industry Benchmark (For Reference; Compiled by the Company)

Profitability and Return

Profitability exceeds the industry median, placing the Company in the upper-tier group.

Growth and Capital Efficiency

The revenue growth rate substantially exceeds the industry median, placing the Company in the high-growth group within the industry.

※Source: Compiled by the Company

Key Points from the Financial Results

1. The Operating Income margin turned positive at 10.8% (from -11.0% in the same period of the previous year), with improvements in the cost structure—namely, a gross profit margin improvement of +20.3pt and a decline in the SG&A expense ratio of -1.5pt—supporting the recovery in profit.

2. Progress against the Full-Year plan was 40.0% for Operating Income and 39.2% for Net Income, exceeding revenue progress of 23.8%, indicating that profitability improvements are advancing at a faster pace than revenue growth.

3. The planned Payout Ratio of approximately 109.1%, combined with a tight liquidity structure in which short-term borrowings exceed cash and equivalents, warrants monitoring of future earnings progress together with balance sheet trends.

Theoretical Stock Price (Reference Value)

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

Sensitivity: ¥3,393–¥3,579 at ±1% for the cost of equity, and ¥3,471–¥3,492 at ±0.1 for ω.

Notes:

• Because progress of Net Income against the Full-Year forecast (39%) exceeds the standard benchmark (25%), forecast EPS has been adjusted upward within a maximum range of +10% (because companies with leading progress tend to exceed forecasts; adjustments may be excessive for businesses with strong seasonality).
• Because forecast ROE is below the cost of equity, the theoretical value is below book value per share.
• Net assets as of the end of the quarter are used (there is a timing difference from the Full-Year forecast).
• Because net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual income model / Interest rate reference month: 2026-06 / This value is not intended to forecast or guarantee the future stock price)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are 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 professionals as necessary.

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