ROUND ONE Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥91.98B
• Operating Income: ¥14.95B
• Net Income: ¥8.85B
• EPS: ¥33.75

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Round One (4680) delivered solid top-line and operating performance in FY2026 Q2 under IFRS, with revenue of 919.85 (100M JPY), up 6.9% YoY, and operating income of 149.49 (100M JPY), up 7.4% YoY, indicating modest operating leverage. Gross profit reached 168.97 (100M JPY), translating to a gross margin of 18.4%, while EBITDA was strong at 360.92 (100M JPY), implying a high EBITDA margin of 39.2% for an asset-intensive leisure format. Net income was 88.52 (100M JPY), up 1.8% YoY, lagging operating income growth due to net non-operating headwinds and a normalized tax burden. Profit before tax of 133.47 (100M JPY) was 16.0 (100M JPY) below operating income, suggesting negative non-operating items partly offset by 1.21 (100M JPY) of equity-method income. The effective tax rate was 26.9%, broadly consistent with domestic statutory levels. From a DuPont perspective, ROE was 12.0%, decomposed into a net margin of 9.6%, asset turnover of 0.339x, and financial leverage of 3.68x, highlighting a leverage-assisted return profile with modest capital efficiency. The equity ratio stood at 27.2%, and the debt-to-equity ratio at 2.62x, indicating a balance sheet more leveraged than average, typical of an asset-heavy, facility-based operator. Operating cash flow was robust at 298.49 (100M JPY), 3.37x net income, pointing to strong earnings-to-cash conversion. Free cash flow was comfortably positive at 190.49 (100M JPY), after investing cash outflows of 108.00 (100M JPY) and capex of 107.74 (100M JPY). Liquidity appears adequate with cash and equivalents of 511.54 (100M JPY), though current ratio and quick ratio are not computable due to unreported current liabilities. Dividend outflows were 20.23 (100M JPY), with a calculated payout ratio of 26.1% and FCF coverage of 8.25x, indicating headroom for distributions while funding investments. Book value per share was calculated at 281.06 JPY, with average shares of 262.30 million and diluted EPS of 33.63 JPY. The revenue growth and operating margin resilience suggest stable demand and cost control, while depreciation of 211.43 (100M JPY) underscores the capital-intensive nature of the model. The net non-operating drag is a watchpoint given unreported interest expense details and potential FX effects. Overall, profitability quality is supported by cash flow, but solvency depends on maintaining earnings power given relatively high leverage. Data gaps remain (e.g., non-operating breakdown, debt composition, current liabilities), so conclusions are based on disclosed non-zero items only.

Profitability Analysis

ROE_decomposition: Reported ROE is 12.0%, consistent with DuPont: Net profit margin 9.6% x Asset turnover 0.339x x Financial leverage 3.68x. Returns are primarily leverage-assisted with moderate margins and low asset turnover typical for facility-heavy operations. margin_quality: Gross margin is 18.4% and operating income stands at 149.49 on revenue of 919.85, implying an operating margin of about 16.3% on a pre-D&A basis when using EBITDA, and roughly 16.3% operating margin if we interpret SG&A of 28.74 as reported. Note: the unusually low SG&A relative to gross profit suggests classification differences under IFRS; we rely on the reported operating income for margin assessment. EBITDA margin is high at 39.2%, supported by significant depreciation (211.43), evidencing asset intensity. Net margin at 9.6% compresses from operating level due to non-operating losses and taxes. operating_leverage: Revenue grew 6.9% YoY while operating income rose 7.4% YoY, indicating mild positive operating leverage. The gap between operating and net income growth (+1.8% YoY) reflects non-operating drag and tax normalization.

Growth Assessment

revenue_sustainability: Top-line growth of 6.9% YoY suggests steady demand, likely driven by stable footfall and utilization of core amusement formats. Asset turnover of 0.339x indicates capacity remains underutilized relative to asset base, leaving room for productivity gains. profit_quality: Operating income growth outpaced sales slightly, showing cost discipline. However, profit before tax at 133.47 vs operating income at 149.49 indicates non-operating headwinds (e.g., finance costs or FX), which diluted net income growth to 1.8% YoY. outlook: With high EBITDA and solid OCF, the company appears positioned to fund ongoing capex while maintaining dividends. Sustainability of growth will depend on maintaining utilization, controlling energy and labor costs, and mitigating non-operating drags. Given data limitations (no segment disclosures, no non-operating detail), we assume current trends persist into the near term.

Financial Health

liquidity: Cash and equivalents total 511.54 (100M JPY). Current ratio and quick ratio are not computable due to unreported current liabilities; working capital shown equals current assets (647.94), implying current liabilities were not disclosed and thus true working capital is unknown. solvency: Total assets are 2,717.35 with equity of 737.77, implying financial leverage of 3.68x and an equity ratio of 27.2%. Debt-to-equity is 2.62x, indicating higher leverage; detailed interest-bearing debt and maturity profile are unreported, limiting granular solvency analysis. capital_structure: Retained earnings are 317.23 and capital surplus 263.41, supporting equity base. Absence of disclosed interest-bearing debt breakdown, current vs noncurrent liabilities, and interest expense prevents assessment of refinancing risk and interest coverage.

Cash Flow Quality

earnings_quality: OCF/Net income is 3.37x (298.49 vs 88.52), indicating strong cash conversion and low accrual risk. The large D&A (211.43) is consistent with an asset-heavy model and underpins the gap between operating income and EBITDA. FCF_analysis: FCF is 190.49 (100M JPY) after capex of 107.74, reflecting ample internal funding capacity. Investing CF of -108.00 aligns closely with capex, suggesting limited M&A or financial asset movements in the period. working_capital: Accounts receivable (31.90) and inventories (49.08) are modest versus revenue scale, consistent with a cash-heavy retail/amusement model. Lack of current liabilities detail limits analysis of payables and timing effects; nonetheless, positive OCF provides comfort on working capital management.

Dividend Sustainability

payout_ratio_assessment: Calculated payout ratio is 26.1% based on disclosed EPS and interim DPS figures, indicating a conservative distribution relative to earnings. FCF_coverage: Dividends paid were 20.23 (100M JPY) versus FCF of 190.49, implying FCF coverage of 8.25x, providing substantial buffer for dividends under current conditions. policy_outlook: With solid OCF and moderate payout, the company appears able to maintain distributions alongside investment needs, subject to stable earnings and no adverse shifts in non-operating items or capex requirements. Annual DPS is unreported; we assume a progressive but disciplined dividend stance given the payout metrics.

Risk Assessment

Business Risks:

• Demand volatility in leisure/amusement affected by consumer sentiment and seasonality
• Energy and utility cost inflation impacting operating margins
• Labor cost pressures and staffing constraints
• Execution risk on new store openings, refurbishments, and format upgrades
• Competitive intensity from alternative entertainment options
• Event risk from weather or natural disasters affecting footfall

Financial Risks:

• High leverage (D/E 2.62x) with limited visibility on debt terms and maturities
• Interest rate risk and potential increases in finance costs (interest expense not disclosed)
• FX exposure if overseas operations exist (non-operating negative suggests possible FX impacts)
• Refinancing risk due to low equity ratio (27.2%) if credit conditions tighten

Key Concerns:

• Negative non-operating result reducing PBT relative to operating income
• Data gaps: current liabilities, interest expense, and debt structure unreported
• Asset turnover at 0.339x indicates reliance on leverage rather than capital efficiency for ROE

Investment Implications

Key Takeaways:

• Revenue growth of 6.9% YoY with operating income up 7.4% demonstrates mild operating leverage
• ROE of 12.0% is supported by leverage (3.68x) and moderate net margin (9.6%)
• Strong cash generation: OCF 298.49 and FCF 190.49 with OCF/NI of 3.37x
• High EBITDA margin (39.2%) reflects asset intensity and scale benefits
• Balance sheet is leveraged: equity ratio 27.2% and D/E 2.62x; interest coverage not computable
• Dividend appears well-covered with a 26.1% payout and 8.25x FCF coverage

Metrics to Watch:

• Store-level utilization and same-store sales growth
• Operating margin and EBITDA margin trends versus energy and labor costs
• Non-operating income/expense breakdown and effective interest rate
• OCF/Net income ratio and working capital swings
• Capex intensity and returns on new investments
• Leverage (D/E), equity ratio, and any refinancing activities
• Effective tax rate stability

Relative Positioning: Within domestic leisure/amusement peers, Round One exhibits strong EBITDA generation and cash conversion but higher financial leverage and lower asset turnover, implying greater sensitivity to demand and non-operating costs while maintaining capacity to self-fund investments and dividends under stable conditions.

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