| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥182.7B | ¥174.3B | +4.8% |
| Operating Income | ¥37.8B | ¥31.4B | +20.4% |
| Ordinary Income | ¥39.6B | ¥30.9B | +28.1% |
| Net Income | ¥27.7B | ¥21.6B | +28.7% |
| ROE | 12.2% | 10.0% | - |
The FY2026 Q3 cumulative results recorded Revenue of ¥182.7B (YoY +¥8.4B +4.8%), Operating Income of ¥37.8B (YoY +¥6.4B +20.4%), Ordinary Income of ¥39.6B (YoY +¥8.7B +28.1%), and Net Income of ¥27.7B (YoY +¥6.2B +28.7%). Results show both top-line and bottom-line growth, with profit growth materially outpacing revenue growth. Operating margin improved to 20.7% (up +2.7pt from 18.0% in the prior year), driven mainly by containing SG&A to 26.2% (prior year 28.8%) while maintaining a gross margin of 46.9%. Ordinary Income benefited from non-operating income of ¥1.9B, including securities disposal gains of ¥0.9B, supporting further profit improvement. After an effective tax rate of 30.0%, Net Income margin improved to 15.2% (up +2.8pt from 12.4%). Progress against full-year guidance stands at Revenue 73.1%, Operating Income 75.5%, Ordinary Income 79.2%, and Net Income 79.2%, tracking standard seasonality (Q3 cumulative = 75%), indicating a high probability of achieving the full-year plan.
Revenue: Top-line was ¥182.7B, a YoY increase of 4.8%. Growth was driven by the single segment (comprehensive content provision services centered on weather information), with contract assets maintained at ¥12.1B (prior year ¥11.7B) and accounts receivable of ¥36.1B (prior year ¥32.8B, +10.0%), indicating ongoing project progress supporting revenue. Conversely, contract liabilities decreased to ¥2.0B from ¥6.7B a year earlier (−69.6%), reflecting a thinning of the advance-receipt structure.
P&L: Cost of sales was ¥97.0B (cost of sales ratio 53.1%), yielding a stable high gross margin of 46.9% (prior year 46.8%). SG&A declined to ¥47.9B (prior year ¥50.1B, −4.6%), and SG&A ratio improved to 26.2% (prior year 28.8%, −2.6pt), with fixed-cost absorption and cost efficiency driving the operating margin improvement to 20.7% (prior year 18.0%). Non-operating income included interest income of ¥0.2B and securities disposal gains of ¥0.9B, while forex losses of ¥0.8B offset part of the non-operating income net ¥1.9B. Non-operating expenses were minor at ¥0.1B, resulting in Ordinary Income of ¥39.6B (YoY +28.1%). No extraordinary items were disclosed, so profit before tax = Ordinary Income ¥39.6B. After corporate taxes of ¥11.9B (effective tax rate 30.0%), Net Income was ¥27.7B (+28.7%); non-controlling interests were ¥0.0B, so Net Income attributable to owners of the parent ≒ Net Income. The securities disposal gain of ¥0.9B is a one-off factor with limited recurrence next fiscal year. In conclusion, stable gross margin combined with significant SG&A reduction drove operating profit growth well in excess of revenue growth.
Profitability: Operating margin of 20.7% improved +2.7pt from 18.0% and well exceeds the industry median of 8.2% (IQR 3.6%–18.0%, IT & Communications 2025-Q3). Net Income margin of 15.2% (up +2.8pt from 12.4%) also compares favorably to the industry median of 6.0% (IQR 2.2%–12.7%). ROE at 12.2% (improved from approx. 10.0% prior year) beats the industry median of 8.3% (IQR 3.6%–13.1%), primarily due to Net Income margin improvement. ROA is 10.8% (Net Income ¥27.7B ÷ Total Assets ¥258.7B), far above the industry median 3.9% (IQR 1.4%–7.0%), reflecting a light asset base and high profitability.
Cash Quality: DSO (days sales outstanding) is 72 days (Accounts Receivable ¥36.1B ÷ Daily Sales ¥0.50B), roughly in line with the industry median 61 days (IQR 46–83 days) but extended from 67 days a year earlier, indicating lengthening collection cycles. Days payable outstanding is 3 days (Accounts Payable ¥0.7B ÷ Daily Cost of Sales ¥0.27B), far below the industry median 35 days, reflecting a predominantly cash-settlement working capital structure. The substantial reduction in contract liabilities (−¥4.6B) reduces advance-receipt cushions and is a short-term headwind to OCF generation.
Investment Efficiency: Total asset turnover is 0.71x (Revenue ¥182.7B ÷ Total Assets ¥258.7B), similar to the industry median 0.67x (IQR 0.49–0.93), indicating efficient asset utilization.
Financial Soundness: Equity Ratio is 88.2% (up +4.7pt from prior year 83.5%), substantially above the industry median 59.2% (IQR 42.5%–72.7%), indicating a very conservative capital structure. Current Ratio is 919.3% (Current Assets ¥224.2B ÷ Current Liabilities ¥24.4B), far exceeding the industry median 215% (IQR 157%–362%), implying no short-term liquidity risk. Financial leverage of 1.13x is well below the industry median 1.66x, characterizing low-leverage operations. Net cash of ¥166.2B (cash and deposits − interest-bearing debt ≒ cash and deposits) implies net debt/EBITDA is negative (effectively debt-free), and compares very favorably to the industry median −2.84x.
Although the cash flow statement is not disclosed, balance sheet movements were analyzed to infer cash dynamics. Cash and deposits stand at ¥166.2B, down ¥3.6B from ¥169.8B a year earlier; despite Net Income of ¥27.7B, the cash decrease was modest, suggesting continued cash generation from operating activities. However, accounts receivable increased by ¥3.3B from ¥32.8B to ¥36.1B and DSO extended from 67 to 72 days, indicating a time lag between profit recognition and cash collection. Contract liabilities decreased by ¥4.6B from ¥6.7B to ¥2.0B, so payout of advance receipts contributed to working capital cash outflow. Accounts payable decreased by ¥0.6B from ¥1.3B to ¥0.7B, indicating supplier payments progressed. Conversely, accrued taxes payable decreased by ¥5.0B from ¥9.5B to ¥4.5B, reflecting tax payments that caused cash outflow. Fixed assets were flat at ¥34.6B (prior year ¥34.6B), indicating no large-scale investment activity. Intangible assets fell from ¥2.3B to ¥1.5B, reflecting software amortization. There was no material movement in interest-bearing debt; financing activity was limited. Overall, with ample liquidity (¥166.2B), operating cash generation continues, but increases in accounts receivable and reductions in contract liabilities, accounts payable, and tax payables caused working capital cash outflows that offset the ¥27.7B Net Income. Sustainability of FCF generation depends on future collection of receivables and re-accumulation of contract liabilities.
The ¥1.8B gap between Operating Income ¥37.8B and Ordinary Income ¥39.6B represents net non-operating items and includes one-off/non-recurring elements such as securities disposal gains ¥0.9B, interest income ¥0.2B, and subsidy income ¥0.3B, so core earnings should be evaluated primarily at the Operating Income level. Forex losses of ¥0.8B indicate currency fluctuation impacts, though forex gains of ¥0.4B were also recorded, resulting in a small net negative contribution. The difference between Comprehensive Income ¥28.9B and Net Income ¥27.7B (¥1.2B) comprises foreign currency translation adjustments ¥1.0B and securities valuation differences ¥0.1B, indicating valuation gains beyond realized profit were minor. Increases in accounts receivable (+¥3.3B) and extended DSO (72 days) show divergence between revenue recognition and cash collection, implying some delay in cash backing of profits from an accrual perspective. The large decrease in contract liabilities (−¥4.6B) reflects realization of previously received advances but also indicates weak accumulation of new advances, thinning future revenue recognition buffers. High gross margin 46.9% and operating margin 20.7% are both high and suggest persistence of operating-level earnings; however, the securities disposal gains of ¥0.9B included in non-operating income are transitory and should not be expected to contribute to Ordinary Income in subsequent years.
Full-year guidance is Revenue ¥250.0B (YoY +6.4%), Operating Income ¥50.0B (YoY +10.7%), Ordinary Income ¥50.0B (YoY +11.9%), Net Income ¥35.0B, EPS ¥78.94. Progress of Q3 cumulative results against the full-year forecast is Revenue 73.1%, Operating Income 75.5%, Ordinary Income 79.2%, and Net Income 79.2%, aligning with standard seasonality (Q3 cumulative = 75%), supporting a high likelihood of plan attainment. Full-year Operating margin is assumed at 20.0% (¥50.0B ÷ ¥250.0B), slightly below the Q3 cumulative 20.7%, with Q4 standalone Operating margin assumed at 18.0% (Q4 Operating Income ¥12.2B ÷ Q4 Revenue ¥67.3B), incorporating moderate slowdown. The Q3 cumulative Net Income progress of 79.2% against the full-year Net Income ¥35.0B implies an expected Q4 Net Income of ¥7.3B, consistent with assumptions on effective tax rate and one-off items. There has been no revision to the forecasts, and the company appears confident in achieving its plan.
The Q2-end dividend was ¥45 (actual), and full-year dividend forecast is ¥57.5. The payout ratio against full-year EPS forecast ¥78.94 is 72.9%, a high level. Note that a 1:2 stock split was implemented effective 1 December 2024; on a pre-split basis, the FY2026 year-end dividend equals ordinary dividend ¥22.5 + commemorative dividend ¥35 = ¥57.5, and annual dividend on a pre-split basis would be ¥160. Based on Q3 cumulative Net Income ¥27.7B and an average number of shares during the period of 44,375 thousand shares, EPS calculated is ¥62.48, which is consistent with the full-year EPS forecast ¥78.94 and implies some profit recognition in Q4. Cash available for dividends is ample at ¥166.2B, and with an Equity Ratio of 88.2% and near net-debt-free balance sheet, dividend sustainability is high. However, the payout ratio of 72.9% is elevated, so if future profit levels decline, maintaining the dividend would require monitoring. The commemorative dividend of ¥35 is a one-off shareholder return measure, and assessment is needed on the appropriateness of the ordinary dividend level (ordinary dividend portion) going forward. No share buybacks were disclosed; shareholder returns are concentrated in dividends.
Industry Position (reference, company research): Compared with the IT & Communications industry 2025 Q3 benchmark (median, n ≈ 100 companies), Operating margin 20.7% substantially exceeds the industry median 8.2% (IQR 3.6%–18.0%), positioning the company among the industry leaders in profitability. Net Income margin 15.2% also outperforms the industry median 6.0% (IQR 2.2%–12.7%). ROE 12.2% exceeds the industry median 8.3% (IQR 3.6%–13.1%), and ROA 10.8% is markedly higher than the industry median 3.9% (IQR 1.4%–7.0%), highlighting a high-profit, light-asset business model. Equity Ratio 88.2% is well above the industry median 59.2% (IQR 42.5%–72.7%), placing the company among the most conservative capital structures in the sector. Current Ratio 919.3% is also extremely high compared with the industry median 215% (IQR 157%–362%), indicating minimal short-term liquidity risk. However, Revenue growth +4.8% trails the industry median 10.4% (IQR −1.1%–19.5%), placing the company below median on growth. The Rule of 40 (Revenue growth + Operating margin = 25.5%) is around the industry median 20% (IQR 6%–34%), reflecting a mature profile biased toward profitability rather than growth. Total asset turnover 0.71x is in line with the industry median 0.67x (IQR 0.49–0.93). DSO 72 days aligns roughly with the industry median 61 days (IQR 46–83 days). Overall, the company’s positioning is “high profitability, high financial soundness, low growth,” with a management style emphasizing stability and profitability.
This report was automatically generated by AI analyzing XBRL financial statement filings. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on public financial disclosures. Investment decisions are your responsibility; consult a professional advisor as appropriate.