Adventure,Inc. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥6.97B
• Operating Income: ¥536M
• Net Income: ¥329M
• EPS: ¥38.18

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

Adventure Inc. (6030) reported FY2026 Q1 consolidated IFRS results with revenue of 69.67 (100M JPY), up 4.8% YoY, but operating income fell 38.2% YoY to 5.36, indicating notable margin compression. Using disclosed revenue and cost of sales, we estimate gross profit at 45.89 and a gross margin of approximately 65.9%, pointing to a primarily commission-driven model with low inventory intensity. SG&A expenses were 34.02, equating to 48.8% of revenue, which, together with a modest top-line increase, drove the decline in operating profit. Profit before tax was 5.14 and net income was 2.83, down 42.0% YoY, implying further pressure below the operating line and a high effective tax rate of 65.5%. DuPont metrics show a net margin of 4.1%, asset turnover of 0.263x, and financial leverage of 2.75x, resulting in an ROE of 2.9% for the quarter (not annualized). Total assets stood at 265.14 and total equity at 96.27 (equity ratio 35.0%), with liabilities of 181.80, translating to a debt-to-equity (broad, using total liabilities) of 1.89x. Liquidity appears strong with cash and equivalents at 163.45, representing roughly 61.7% of equity and 61.7% of current assets, supporting operational resilience. Accounts receivable were 37.66 versus accounts payable of 81.43, consistent with a negative working-capital model typical of online agency platforms; inventories were minimal at 0.34. Operating margin based on disclosed figures is approximately 7.7% (5.36/69.67), materially lower YoY given operating profit contraction against growing revenue. While reported XBRL margins are N/A, the period data allows estimation of key profitability ratios; however, comparability with prior periods may be affected by differing revenue recognition or mix shifts. The high tax burden dampened bottom-line conversion and should be monitored for normalization in subsequent quarters. Balance sheet quality is supported by substantial cash and low tangible working capital requirements, though concentration in payables introduces timing and supplier-side risk. Cash flow statements were not disclosed, limiting assessment of earnings-to-cash conversion and free cash flow coverage. Dividend information is unreported for the quarter; thus, payout sustainability cannot be assessed from cash flows at this stage. Overall, the quarter shows modest revenue growth but notable margin pressure and an elevated tax rate, yielding subdued ROE despite leverage, with ample liquidity providing a buffer for execution on growth and cost control.

Profitability Analysis

ROE_decomposition: Net margin 4.1% x Asset turnover 0.263 x Financial leverage 2.75x = ROE 2.9% (quarterly, not annualized). The main drag QoQ/YoY is margin, not turnover or leverage. margin_quality: Estimated gross margin ~65.9% (gross profit 45.89 = 69.67 - 23.78). Operating margin ~7.7% (5.36/69.67), down significantly YoY given operating income -38.2% vs revenue +4.8%. SG&A intensity at 48.8% of revenue indicates higher marketing, personnel, or system costs, compressing margins. operating_leverage: Revenue rose 4.8% while operating income fell 38.2%, implying negative operating leverage in the quarter due to cost growth outpacing sales. Fixed cost absorption appears weaker, and mix effects may have reduced unit economics.

Growth Assessment

revenue_sustainability: Top-line grew 4.8% YoY to 69.67. Growth appears modest; with payables and receivables dynamics typical of a platform model, revenue likely reflects booking volume and commission rates. Sustainability will depend on travel demand and take-rate stability. profit_quality: Profit before tax 5.14 vs operating income 5.36 suggests limited non-operating drag this quarter, but the effective tax rate at 65.5% compressed net income to 2.83. Margin compression at the operating level reduces profit quality despite stable gross economics. outlook: If SG&A normalization and tax rate mean-reversion occur, incremental operating leverage could recover. Conversely, continued higher customer acquisition costs or take-rate pressure would cap margin recovery. Lack of CF data limits visibility on reinvestment capacity in the near term.

Financial Health

liquidity: Cash and equivalents 163.45 provide substantial liquidity relative to equity (≈170% of net income x many quarters) and to total assets (61.7% of current assets). Current liabilities are unreported, so classic ratios (current/quick) cannot be computed. solvency: Equity ratio 35.0% and total liabilities/equity 1.89x indicate moderate leverage for a platform business with low tangible assets. Interest-bearing debt is unreported; solvency risk appears manageable given cash on hand. capital_structure: Total assets 265.14 funded by equity 96.27 and liabilities 181.80. With payables 81.43 exceeding receivables 37.66, the firm benefits from supplier credit; this structurally lowers invested capital but introduces reliance on counterparties.

Cash Flow Quality

earnings_quality: Net income 2.83 with high tax rate suggests temporary distortions; absence of OCF prevents triangulation of accrual intensity. Receivables (37.66) vs payables (81.43) profile implies favorable cash conversion in normal conditions. FCF_analysis: Operating and investing cash flows are unreported; free cash flow cannot be derived. Cash balance at 163.45 provides a cushion for variability in operating cash generation. working_capital: Inventories minimal at 0.34. Receivables to revenue at ~54% of quarterly sales (37.66/69.67) may reflect timing seasonality in bookings. Payables exceed receivables, consistent with a negative net working capital cycle that can enhance cash generation.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and total dividends paid are unreported for the quarter; payout ratio cannot be calculated. With quarterly ROE at 2.9% and elevated tax rate, near-term distributable profit appears constrained versus prior year. FCF_coverage: Not assessable due to unreported OCF and capex. Substantial cash holdings provide theoretical coverage, but policy and cash needs for growth must be considered. policy_outlook: No guidance is provided in the data. Given the business model’s low capex nature, sustained payouts are plausible in steady-state, but current margin pressure argues for caution until profitability normalizes.

Risk Assessment

Business Risks:

• Demand volatility in travel and airline ticketing affecting booking volumes and commissions
• Take-rate pressure from competition and supplier negotiations
• Customer acquisition cost inflation impacting SG&A intensity and margins
• FX and international travel policy shifts affecting cross-border demand
• Execution risk in technology/platform reliability and cybersecurity

Financial Risks:

• High effective tax rate (65.5%) depressing net profitability
• Reliance on accounts payable financing; adverse changes in payment terms could strain liquidity
• Potential mismatch in receivables/payables timing during demand shocks
• Concentration risk if large suppliers or payment processors adjust terms
• Limited visibility due to unreported cash flow statements

Key Concerns:

• Operating margin compression despite revenue growth (operating income -38.2% YoY)
• Elevated SG&A at 48.8% of revenue reducing operating leverage
• Tax rate well above statutory norms depressing net income (-42.0% YoY)

Investment Implications

Key Takeaways:

• Revenue grew modestly (+4.8% YoY) to 69.67, but profits declined sharply
• Operating margin around 7.7%, down YoY given -38.2% operating income
• High cash balance (163.45) enhances resilience despite profit softness
• ROE at 2.9% reflects compressed net margin and moderate leverage
• Working capital structure leverages payables; monitor any term changes

Metrics to Watch:

• Operating margin and SG&A-to-revenue ratio each quarter
• Effective tax rate normalization trajectory
• Receivables and payables turnover and any shift in net working capital
• Cash balance and disclosure of OCF/FCF when available
• Revenue growth drivers (booking volumes vs take-rate/mix)

Relative Positioning: The company exhibits a capital-light, cash-rich balance sheet typical of online agency platforms, but faces near-term margin pressure and a high tax burden versus peers; recovery hinges on cost control and tax normalization while maintaining stable take-rates.

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