| Indicator | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥162.9B | ¥140.7B | +15.7% |
| Operating Income | ¥22.0B | ¥13.9B | +58.7% |
| Ordinary Income | ¥22.0B | ¥14.1B | +56.3% |
| Net Income | ¥13.9B | ¥9.8B | +42.7% |
| ROE | 19.3% | 17.9% | - |
For the fiscal year ended March 2026, Revenue was ¥162.9B (YoY +¥22.2B +15.7%), Operating Income was ¥22.0B (YoY +¥8.2B +58.7%), Ordinary Income was ¥22.0B (YoY +¥7.9B +56.3%), and Net Income attributable to owners of the parent was ¥13.9B (YoY +¥4.2B +42.7%), achieving both top-line and bottom-line growth. Operating margin improved to 13.5% from 9.9% in the prior year (+3.6pt), and gross margin also improved to 78.7% (prior year 77.0%) (+1.7pt). Net margin improved to 8.5% (prior year 6.9%) (+1.6pt), reflecting notable operating leverage. ROE improved to 19.3% year-on-year, and Equity Ratio strengthened to 53.9% (prior year 47.6%), indicating improved financial soundness. The CloudSign Business drove company results with Revenue of ¥87.6B (+25.6%), Operating Income of ¥29.7B (+49.3%), and a margin of 33.9%, while the Professional Support Business also performed steadily with Revenue of ¥75.3B (+6.1%), Operating Income of ¥18.7B (+22.8%), and a margin of 24.9%.
Revenue: Revenue of ¥162.9B (YoY +15.7%) maintained double-digit growth. By segment, the CloudSign Business led corporate growth with ¥87.6B (+25.6%), driven by expansion of enterprise adoption of the contract management platform "CloudSign" and ARPU improvements. The Professional Support Business continued steady growth at ¥75.3B (+6.1%), supported by the legal consultation portal "Bengo4.com" and services for professionals. Segment revenue composition was CloudSign 53.8% and Professional Support 46.2%, increasing CloudSign’s weight. Gross margin improved to 78.7% from 77.0% (+1.7pt), attributable to declining marginal costs and mix improvement as the SaaS model scaled.
Profitability: Operating Income rose substantially to ¥22.0B (YoY +58.7%), with Operating Margin improving to 13.5% (prior year 9.9%, +3.6pt). SG&A was ¥106.2B (65.2% of Revenue), up from ¥94.4B, but revenue growth outpaced expense growth, realizing operating leverage. By segment, CloudSign margin was 33.9% and Professional Support 24.9%, both improving and enabling greater absorption of corporate costs. Ordinary Income was ¥22.0B (+56.3%), roughly in line with Operating Income; non-operating income was ¥0.6B and non-operating expenses ¥0.7B, with minor net impact. Special gains/losses resulted in a net loss of ▲¥2.2B, mainly due to an impairment on available-for-sale securities of ¥2.0B. Profit before tax was ¥19.8B (+20.7%), with income taxes of ¥4.7B and an effective tax rate of 23.8% (prior year 36.1%), declining due to deferred tax benefit of ▲¥1.7B which lowered tax burden. Net Income attributable to owners of the parent was ¥13.9B (+42.7%). In conclusion, high growth in CloudSign and improved operating leverage produced strong revenue growth and significantly higher profits.
The CloudSign Business delivered Revenue of ¥87.6B (YoY +25.6%), Operating Income of ¥29.7B (+49.3%), and a margin of 33.9% (improved +2.4pt from prior year 31.5%), maintaining high growth and high profitability. Enterprise adoption expansion and ARPU improvement for the contract management platform drove growth, and SaaS scale benefits supported margin expansion. The Professional Support Business recorded Revenue of ¥75.3B (+6.1%), Operating Income of ¥18.7B (+22.8%), and a margin of 24.9% (improved +3.4pt from prior year 21.5%); while top-line growth was modest, profitability improved significantly due to stronger monetization of the "Bengo4.com" portal and services for professionals, and cost efficiencies. Both segments improved margins, with CloudSign driving company profitability while Professional Support continued stable profit contribution.
Profitability: Operating Margin of 13.5% improved +3.6pt from 9.9%, and ROE at 19.3% indicates strong returns on equity. Gross Margin of 78.7% (prior year 77.0%) reflects the low marginal cost nature of the SaaS model and continued scale improvements. By segment, CloudSign margin was 33.9% and Professional Support 24.9%, both at high levels.
Cash Quality: Operating Cash Flow (OCF) to Net Income ratio was 1.16x (¥16.2B ÷ ¥13.9B), meeting the benchmark (≥1.0x), indicating generally good cash realization of profits. However, OCF to EBITDA ratio was 0.54x (¥16.2B ÷ ¥30.1B; EBITDA = Operating Income ¥22.0B + Depreciation ¥8.1B) and relatively low, with accounts receivable growth (working capital ▲¥4.0B) pressuring cash conversion.
Investment Efficiency: ROA was 10.4% (Ordinary Income ¥22.0B ÷ Average Total Assets ¥122.2B), and Total Asset Turnover was 1.22x (Revenue ¥162.9B ÷ Average Total Assets), indicating stable asset efficiency. Intangible assets were ¥35.3B (26.4% of total assets), reflecting development investment and goodwill, and an IP-focused asset composition.
Financial Soundness: Equity Ratio was 53.9% (prior year 47.6%) and Current Ratio was 226.1%, indicating a strong balance sheet. Interest-bearing debt was ¥25.3B (Short-term borrowings ¥2.5B + Long-term borrowings ¥18.5B + Current portion of long-term borrowings ¥6.3B) while cash was ¥52.0B, yielding net cash of ¥26.7B. Debt/EBITDA was 0.84x (¥25.3B ÷ ¥30.1B), low, and Interest Coverage was 111.6x (Operating Income ¥22.0B ÷ Interest expense ¥0.2B), indicating very high interest-bearing capacity.
OCF was ¥16.2B (YoY +18.4%). Starting from Profit before tax ¥19.8B, non-cash expenses including Depreciation ¥8.1B and goodwill amortization ¥0.7B were added back, and working capital impacts included accounts receivable increase ▲¥4.0B, accounts payable increase ¥3.2B, and slight increase in advance receipts ¥0.03B. After cash income tax payments of ¥7.5B, OCF was ¥16.2B. Investing Cash Flow was ▲¥10.4B, mainly due to acquisition of intangible assets ▲¥8.5B (primarily software development investment) and acquisition of tangible fixed assets ▲¥0.5B. Acquisition of available-for-sale securities ▲¥1.7B was partially offset by sales proceeds ¥2.3B, resulting in Free Cash Flow of ¥5.8B (OCF ¥16.2B − Investing CF ¥10.4B). Financing Cash Flow was a net inflow of ¥4.5B, as borrowings of ¥7.3B exceeded repayments of ▲¥4.9B, and short-term borrowings increased by ¥2.5B. Share buybacks were ▲¥0.006B (minor), and disposal of treasury stock produced an inflow of ¥0.2B. Cash increased by ¥10.3B to an ending balance of ¥52.0B. While OCF to Net Income ratio 1.16x is healthy, OCF to EBITDA ratio 0.54x is low due to working capital absorption (accounts receivable increase), slowing cash conversion; improving collection cycles is a future focus.
Ordinary Income of ¥22.0B was nearly the same as Operating Income, indicating core operating profitability. Non-operating income of ¥0.6B consisted mainly of interest income ¥0.04B and equity-method investment gains ¥0.5B; non-operating expenses of ¥0.7B were mainly interest expense ¥0.2B, so financial costs were minor. Special gains/losses comprised an impairment on available-for-sale securities of ¥2.0B and gains on sales of securities of ¥2.3B, netting to a loss of ▲¥2.2B, considered temporary. Goodwill amortization of ¥0.7B is included in operating expenses and is a recurring downside under JGAAP, but goodwill / net assets ratio of 11.2% and goodwill / EBITDA multiple of 0.27x suggest sufficient impairment resilience. The difference between OCF ¥16.2B and Net Income ¥13.9B was mainly due to Depreciation ¥8.1B and working capital ▲¥4.0B; accrual ratio was ▲2.6%, which is satisfactory. The gap between Ordinary Income and Net Income was due to special losses ¥2.2B and taxes ¥4.7B, not structural recurring items; overall quality of earnings is assessed as high.
Full-year guidance forecasts Revenue ¥205.0B (YoY +25.9%), Operating Income ¥30.0B (+36.1%), Net Income attributable to owners of the parent ¥20.0B, and EPS ¥87.47. The forecast assumes Operating Margin of 14.6%, improving +1.1pt from 13.5% in the current year, with continuation of mid-20% growth for the CloudSign Business and absorption of corporate costs as key to achieving guidance. Progress rates (first-half actual / full-year forecast) are Revenue 79.5%, Operating Income 73.5%, and Net Income 69.5%, generally on track; accelerating growth in the second half and disciplined cost control are focal points for plan realization. Dividend forecast is ¥0 (no dividend), maintaining a no-dividend policy to prioritize growth investment.
Interim dividend ¥0 and year-end dividend ¥0, resulting in annual dividend of ¥0 and continuation of no dividend. Although Net Income attributable to owners of the parent was ¥13.9B and Free Cash Flow was ¥5.8B, capital allocation prioritized growth investments (intangible asset acquisitions ¥8.5B, etc.). Payout Ratio is 0% and share buybacks were limited at ▲¥0.006B. Retained earnings increased to ¥58.7B (prior year ¥43.6B, +34.7%), building internal reserves to support future growth investment and financial buffers. Given cash of ¥52.0B and low leverage (Debt/EBITDA 0.84x), there is sufficient financial capacity to resume dividends in the future, but continuation of no dividend is judged rational in the current growth phase.
Business Concentration Risk: The CloudSign Business accounts for 53.8% of Revenue and 61.3% of segment profit, creating high dependence on a single business. If electronic contract market growth slows or competition intensifies, CloudSign’s growth rate and margins could decline, materially impacting corporate performance. There is also a limited impairment risk on goodwill of ¥8.0B (11.2% of net assets).
Working Capital Efficiency Risk: Accounts receivable increased to ¥24.7B (YoY +19.3%), growing faster than revenue, and OCF to EBITDA ratio of 0.54x indicates weak cash conversion efficiency. If collection periods lengthen or bad debts rise, cash flow deterioration could reduce growth investment capacity. Advance receipts of ¥8.5B are a stable short-term funding source, but higher cancellation rates could slow accumulation of advance receipts.
Available-for-sale Securities Valuation Risk: Holdings of available-for-sale securities totaled ¥4.9B (3.7% of total assets), and a valuation loss of ¥2.0B was recorded this period. If market conditions or investee performance deteriorate, additional valuation losses could reoccur and pressure Net Income through special losses. Market value volatility of financial assets is limited but requires active monitoring of the investment portfolio.
Profitability & Returns
| Indicator | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 13.5% | 8.1% (3.6%–16.0%) | +5.4pt |
| Net Margin | 8.5% | 5.8% (1.2%–11.6%) | +2.7pt |
Profitability significantly exceeds the industry median, with both Operating and Net Margins above the 3rd quartile.
Growth & Capital Efficiency
| Indicator | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 15.7% | 10.1% (1.7%–20.2%) | +5.6pt |
Revenue growth rate exceeds the industry median by 5.6pt, placing the company in the high-growth group within the IT & Communications sector.
※Source: Company compilation
The high-growth, high-profitability model of the CloudSign Business is driving corporate revenue, with Revenue ¥87.6B (+25.6%) and margin 33.9%, evidencing notable operating leverage. The Professional Support Business also improved margin to 24.9%; monitoring whether both segments can sustain margin improvements is important. At the same time, CloudSign’s 53.8% revenue concentration poses a concentration risk that requires monitoring of sustainability of growth and margins.
OCF of ¥16.2B versus Net Income ¥13.9B (ratio 1.16x) is healthy, but OCF to EBITDA ratio of 0.54x indicates low cash conversion efficiency. Accounts receivable increase (working capital ▲¥4.0B) is the primary cause; improving collection cycles and strengthening advance receipts accumulation are keys to cash flow improvement. While maintaining Free Cash Flow of ¥5.8B, the company continues investment in intangible assets of ¥8.5B, keeping a balanced allocation of funds.
Financial soundness is high: Equity Ratio 53.9%, Debt/EBITDA 0.84x, Interest Coverage 111.6x, indicating no issues with financial resilience. With cash of ¥52.0B and low leverage, there is sufficient capacity for growth investments to achieve next-term guidance (Revenue ¥205.0B +25.9%, Operating Income ¥30.0B +36.1%). Continued no-dividend policy aligns with the growth phase, but accumulated retained earnings and low leverage leave room to resume shareholder returns in the future.
This report was auto-generated by AI analyzing XBRL earnings release data to produce a financial results analysis document. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are reference information compiled by the company based on publicly disclosed financial statements. Investment decisions are your own responsibility; consult professional advisors as necessary before making investment decisions.