| Metric | Current Period | Prior-Year Period | YoY |
|---|---|---|---|
| Revenue | ¥671.4B | ¥727.0B | -7.6% |
| Operating Income | ¥233.2B | ¥233.8B | -0.3% |
| Ordinary Income | ¥250.8B | ¥243.7B | +2.9% |
| Net Income | ¥179.2B | ¥169.1B | +6.0% |
| ROE | 11.0% | 11.0% | - |
FY2026 Q3 consolidated results were Revenue ¥671.4B (YoY -¥55.6B, -7.6%), Operating Income ¥233.2B (YoY -¥0.6B, -0.3%), Ordinary Income ¥250.8B (YoY +¥7.1B, +2.9%), and Net Income ¥179.2B (YoY +¥10.1B, +6.0%). Despite lower revenue, operating income was essentially flat; increased non-operating income supported growth in ordinary income, and net income exceeded the prior year. The company maintained a high gross profit structure with a Gross Profit Margin of 53.4%, and preserved a highly profitable profile with an Operating Margin of 34.7%. For the full-year outlook, the company forecasts Revenue of ¥880.0B (YoY -12.7%) and Operating Income of ¥260.0B (YoY -19.8%), implying declines in both revenue and earnings; progress through Q3 is consistent with plan.
[Profitability] ROE 11.0% (DuPont: Net Profit Margin 26.7% × Total Asset Turnover 0.350 × Financial Leverage 1.17x), Operating Margin 34.7% (essentially flat from 34.8% a year earlier), Ordinary Income Margin 37.4% (improved +3.9pt from 33.5% a year earlier), Net Profit Margin 26.7% (improved +3.4pt from 23.3% a year earlier), and Gross Profit Margin remains high at 53.4%. [Cash Quality] Cash and deposits ¥885.3B; short-term debt coverage 3.7x. Accounts receivable ¥219.2B (down -25.4% from ¥293.8B a year earlier) and accounts payable ¥151.7B (down -31.5% from ¥221.3B a year earlier) indicate a contraction in working capital and improved cash collection efficiency. Working capital is a substantial positive at ¥1,051.9B. [Investment Efficiency] Total Asset Turnover 0.350x; investment securities ¥232.0B with valuation gains of ¥91.5B recognized. [Financial Soundness] Equity Ratio 85.1% (improved +4.9pt from 80.2% a year earlier), Current Ratio 541.2%, and debt-to-equity 0.17x, indicating a conservative capital structure. Treasury stock is ¥14.1B (up +86.5% from ¥7.5B a year earlier), suggesting share repurchases during the period.
Cash and deposits increased by ¥46.8B YoY to ¥885.3B, supported by high gross margins and a trend of rising operating earnings. In working capital efficiency, accounts receivable declined ¥74.6B YoY (-25.4%) and accounts payable declined ¥69.6B (-31.5%), with both sides contracting; changes in sales mix and strengthened collection management are presumed to have contributed to improved cash conversion. The substantial decline in receivables indicates collection improvements exceeding the revenue decrease, serving as a source of operating funds. Cash coverage of short-term liabilities of ¥238.4B is 3.7x, indicating very ample liquidity. The 86.5% increase in treasury stock suggests execution of shareholder return measures during the period; in Financing Cash Flow, cash outflows likely occurred for dividends and share repurchases. Comprehensive Income was ¥191.5B, exceeding Net Income of ¥179.2B; valuation gains of ¥91.5B on investment securities contributed to Other Comprehensive Income.
Against Ordinary Income of ¥250.8B and Operating Income of ¥233.2B, net non-operating income was roughly ¥17.6B. The main contributors are presumed to be financial income such as interest and dividend income, equity in earnings of affiliates, and gains on sale of investment securities. An Extraordinary Gain of ¥7.4B from the sale of securities was recorded, with this one-time factor contributing to the uplift in net income. Non-operating income accounts for approximately 2.6% of revenue, indicating a certain scale of income from outside core operations. The Net Profit Margin of 26.7% improved significantly from 23.3% a year earlier; this improvement reflects not only sustained high gross margins but also contributions from non-operating income and extraordinary gains. The substantial decline in accounts receivable indicates working capital improvements that likely enhanced the quality of Operating Cash Flow; although the cash flow statement is undisclosed, limiting quantitative assessment, the cash backing of earnings is presumed to be sound.
[Position within the industry] (Reference information; in-house survey) Compared with the IT & Communications sector (N=68 companies, as of Q3 2025), the company’s profitability indicators are notably high. The Operating Margin of 34.7% far exceeds the sector median of 6.4% (IQR: 2.0–13.5%) and ranks within the top 5%. The Net Profit Margin of 26.7% also far exceeds the sector median of 4.8% (IQR: 0.6–9.4%), reflecting the characteristics of a high-gross-margin business model. ROE 11.0% surpasses the sector median of 7.3% (IQR: 0.9–12.1%) and is within the top 30%; return on total assets is approximately 9.3% on a converted basis, exceeding the sector median of 3.8% (IQR: 0.5–6.0%). Meanwhile, the revenue growth rate of -7.6% trails the sector median of +12.0% (IQR: +2.0–+24.5%), indicating relatively weak topline expansion within the sector. In financial soundness, the Equity Ratio of 85.1% significantly exceeds the sector median of 55.2% (IQR: 42.5–67.3%), and the Current Ratio of 541.2% also surpasses the sector median of 208.0% (IQR: 156–301%), indicating an extremely conservative financial structure. The net debt/EBITDA multiple is substantially negative (effectively net cash), consistent with the sector median of -2.88 (IQR: -5.75–-0.29), implying a very light debt burden. Overall, the company holds an outstanding position in profitability and financial safety within the sector, while growth is relatively subdued.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by our firm based on publicly available earnings data. Investment decisions are your own responsibility; consult a professional as needed before making any investment decisions.