- Net Sales: ¥3.75B
- Operating Income: ¥205M
- Net Income: ¥139M
- EPS: ¥5.34
| Item | Current | Prior | YoY % |
|---|
| Net Sales | ¥3.75B | ¥3.54B | +5.8% |
| Cost of Sales | ¥2.56B | - | - |
| Gross Profit | ¥979M | - | - |
| SG&A Expenses | ¥675M | - | - |
| Operating Income | ¥205M | ¥304M | -32.6% |
| Non-operating Income | ¥3M | - | - |
| Non-operating Expenses | ¥3M | - | - |
| Ordinary Income | ¥204M | ¥304M | -32.9% |
| Income Tax Expense | ¥96M | - | - |
| Net Income | ¥139M | ¥208M | -33.2% |
| Basic EPS | ¥5.34 | ¥7.96 | -32.9% |
| Dividend Per Share | ¥15.00 | ¥15.00 | +0.0% |
| Item | Current End | Prior End | Change |
|---|
| Current Assets | ¥10.46B | - | - |
| Cash and Deposits | ¥6.43B | - | - |
| Inventories | ¥143M | - | - |
| Non-current Assets | ¥8.23B | - | - |
| Property, Plant & Equipment | ¥1.34B | - | - |
| Item | Value |
|---|
| Net Profit Margin | 3.7% |
| Gross Profit Margin | 26.1% |
| Current Ratio | 124.3% |
| Quick Ratio | 122.6% |
| Debt-to-Equity Ratio | 1.01x |
| Item | YoY Change |
|---|
| Net Sales YoY Change | +5.7% |
| Operating Income YoY Change | -32.4% |
| Ordinary Income YoY Change | -32.7% |
| Net Income YoY Change | -32.9% |
| Item | Value |
|---|
| Shares Outstanding (incl. Treasury) | 26.34M shares |
| Treasury Stock | 158K shares |
| Average Shares Outstanding | 26.18M shares |
| Book Value Per Share | ¥348.41 |
| Item | Amount |
|---|
| Q2 Dividend | ¥15.00 |
| Year-End Dividend | ¥20.00 |
| Item | Forecast |
|---|
| Net Sales Forecast | ¥17.40B |
| Operating Income Forecast | ¥2.40B |
| Ordinary Income Forecast | ¥2.44B |
| Net Income Forecast | ¥1.69B |
| Basic EPS Forecast | ¥64.31 |
| Dividend Per Share Forecast | ¥17.00 |
This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.
Intelligent Wave Co., Ltd. (48470) reported FY2026 Q1 non-consolidated results under JGAAP with revenue of ¥3,746 million, up 5.7% year over year, indicating continued demand in its solutions/services portfolio. Gross profit was ¥979 million, translating to a gross margin of 26.1%, which suggests a relatively tight contribution after direct costs for a software/services-centric business. Operating income declined 32.4% YoY to ¥205 million, signaling negative operating leverage as expenses outpaced revenue growth in the quarter. Ordinary income was ¥204 million, broadly in line with operating income, implying minimal net non-operating impact in the quarter. Net income was ¥139 million, down 32.9% YoY, with an EPS of ¥5.34, reflecting margin compression below the operating line as well. DuPont decomposition yields a net margin of 3.71%, asset turnover of 0.217x, and financial leverage of 1.89x, producing a calculated ROE of 1.52% for the quarter. Liquidity remains sound with current assets of ¥10,461 million against current liabilities of ¥8,418 million, resulting in a current ratio of 124.3% and working capital of ¥2,043 million. Inventories are modest at ¥143 million, which fits the company’s project/services orientation and lowers inventory risk. Total assets are ¥17,278 million and total equity is ¥9,122 million; while the reported equity ratio is shown as 0.0% (undisclosed), these balances imply a healthy capital base. Total liabilities stand at ¥9,215 million, implying a liabilities-to-equity ratio of approximately 1.01x. The decline in operating income despite higher revenue suggests elevated SG&A, staffing, or project-related costs, or a less favorable mix impacting gross-to-operating conversion. Cash flow figures (OCF/ICF/FCF) are undisclosed in this dataset, limiting assessment of earnings-to-cash conversion for the quarter. Dividend data are also not disclosed here; the DPS and payout ratio fields show zeros and should be treated as unreported rather than actual values. Given the YoY revenue growth but profit contraction, near-term focus should be on cost discipline, project mix, and pricing power. Overall, the quarter demonstrates resilient top-line momentum but weaker profitability, with balance sheet liquidity and solvency remaining adequate. Data limitations around cash flows and dividends constrain a full view of earnings quality and capital allocation in Q1.
ROE_decomposition: ROE (DuPont) = Net margin (3.71%) × Asset turnover (0.217x) × Financial leverage (1.89x) = 1.52%. This indicates modest profitability driven by low net margins and low asset turnover, with moderate balance-sheet leverage.
margin_quality: Gross margin of 26.1% (¥979m gross profit on ¥3,746m revenue) suggests constrained contribution after direct costs. Operating margin is approximately 5.5% (¥205m/¥3,746m), indicating significant SG&A and development spend absorption. Net margin at 3.71% reflects additional tax burden and minor non-operating effects.
operating_leverage: Revenue grew +5.7% YoY while operating income declined -32.4% YoY, implying negative operating leverage in Q1. This likely stems from higher personnel costs, investment in product development, or a project/service mix shift that reduced gross-to-operating conversion. Monitoring SG&A run-rate versus revenue trajectory will be critical to assess whether this is timing-related or structural.
revenue_sustainability: Top-line growth of +5.7% YoY to ¥3,746m suggests ongoing demand in payments/security solutions and maintenance services. Low inventories (¥143m) imply limited hardware exposure and a services/project-driven model; sustaining growth will depend on order intake and backlog conversion.
profit_quality: Profit contraction (OP -32.4% YoY; NP -32.9% YoY) indicates cost pressure or mix deterioration. With gross margin at 26.1% and operating margin ~5.5%, incremental margins appear weak this quarter. Ordinary income tracked operating income, suggesting limited aid from non-operating items.
outlook: If growth is driven by recurring maintenance and stable service contracts, margins could recover as utilization improves; if driven by lower-margin build projects, profitability may remain pressured. Near-term outlook hinges on backlog quality, pricing discipline, and cost control, especially personnel and subcontracting expenses.
liquidity: Current assets ¥10,460,943k vs current liabilities ¥8,417,575k yields a current ratio of 124.3% and quick ratio of 122.6%, indicating satisfactory near-term liquidity. Working capital stands at ¥2,043,368k, providing a buffer for project execution.
solvency: Total liabilities ¥9,215,222k vs total equity ¥9,122,000k implies liabilities/equity of ~1.01x. Although the equity ratio is shown as 0.0% in the feed (undisclosed), balance sheet totals imply a solid capital base relative to assets of ¥17,278,000k.
capital_structure: Financial leverage in DuPont at 1.89x (assets/equity) indicates moderate leverage. Interest expense is shown as 0 (undisclosed), and ordinary income ≈ operating income suggests minimal financial burden.
earnings_quality: OCF/Net income ratio is shown as 0.00 due to undisclosed cash flow data; thus, earnings-to-cash conversion cannot be assessed from this dataset.
FCF_analysis: Free cash flow is undisclosed (shown as 0). Without OCF and capex detail, FCF coverage of investments and shareholder returns cannot be evaluated for Q1.
working_capital: With inventories at only ¥143m and healthy working capital of ¥2,043m, cash conversion is likely driven more by receivables and payables timing than by inventory swings. Detailed movements are not available due to missing cash flow disclosures.
payout_ratio_assessment: Annual DPS and payout ratio are shown as 0.00 (unreported). Given Q1 EPS of ¥5.34, any actual dividend policy or quarterly payment cannot be inferred from this dataset.
FCF_coverage: FCF is undisclosed; consequently, dividend coverage by FCF cannot be assessed for the quarter.
policy_outlook: Absent disclosed DPS/FCF data, sustainability hinges on recurring earnings capacity and cash generation from maintenance and services. Balance sheet strength (liabilities/equity ~1.01x; implied equity base ¥9.1bn) provides some flexibility, but visibility is limited without cash flow details.
Business Risks:
- Margin pressure from project mix (lower-margin system build vs. higher-margin maintenance/licenses).
- Cost inflation in personnel and subcontracting, reducing operating leverage.
- Timing risk in order intake and revenue recognition impacting quarterly volatility.
- Competitive intensity in payments/security solutions leading to pricing pressure.
- Technology transition risk (cloud migration, cybersecurity requirements) necessitating higher R&D and delivery investment.
- Customer concentration risk typical in domestic financial/settlement systems.
Financial Risks:
- Working capital swings affecting cash conversion due to receivables and project milestones.
- Potential increase in leverage if large projects require upfront costs without commensurate billing terms.
- Limited non-operating income and minimal interest burden leaving little buffer below operating line.
- Dividend and cash flow visibility constrained by undisclosed OCF/FCF data in the quarter.
Key Concerns:
- Negative operating leverage in Q1 despite +5.7% revenue growth.
- Compression in operating and net income (-32% to -33% YoY).
- Lack of disclosed cash flow data limiting assessment of earnings quality and dividend capacity.
Key Takeaways:
- Top-line growth of +5.7% YoY to ¥3.75bn shows demand resilience.
- Gross margin at 26.1% and operating margin ~5.5% indicate margin pressure.
- Operating income fell 32.4% YoY, evidencing negative operating leverage.
- ROE at 1.52% (DuPont: 3.71% × 0.217 × 1.89) reflects low margin/turnover.
- Liquidity is adequate (current ratio 124.3%, working capital ¥2.04bn).
- Cash flow and dividend data are undisclosed, limiting capital return analysis.
Metrics to Watch:
- Order backlog and book-to-bill trends.
- Gross margin and SG&A ratio trajectory.
- Operating margin and incremental margin on revenue growth.
- Receivables days and OCF/NI once disclosed.
- Mix of recurring maintenance vs. project revenue.
- Headcount, subcontracting ratio, and wage inflation impact.
Relative Positioning:
Within Japanese IT services and payments/security solution providers, Intelligent Wave shows steady revenue growth but weaker quarterly profitability and modest ROE, with a balance sheet that appears reasonably capitalized; improving operating leverage and cash conversion are key to strengthen its standing versus peers.
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