| Metric | Current Period | Prior-Year Period | YoY |
|---|---|---|---|
| Revenue | ¥637.9B | ¥592.5B | +7.7% |
| Operating Income | ¥91.2B | ¥80.3B | +13.5% |
| Ordinary Income | ¥91.4B | ¥76.5B | +19.4% |
| Net Income | ¥23.5B | ¥22.5B | +4.4% |
| ROE | 8.6% | 10.5% | - |
For the fiscal year ended February 2026, Revenue was ¥637.9B (YoY +¥45.4B +7.7%), Operating Income was ¥91.2B (YoY +¥10.9B +13.5%), Ordinary Income was ¥91.4B (YoY +¥14.9B +19.4%), and Net income attributable to owners of parent was ¥51.1B (YoY +¥9.1B +21.8%), achieving both revenue and profit growth. Revenue was driven by steady expansion in the PR & Advertising Business and double-digit growth in the Press Release Distribution Business, and Operating margin rose to 14.3% (up 0.7pt from 13.6% the prior year). While maintaining a gross margin of 66.9%, SG&A was contained, yielding effective operating leverage. Net income was affected by non-recurring items (gain on sale of subsidiary equity ¥21.5B, impairment loss ¥18.9B, etc.), but EPS grew to ¥108.93 (from ¥89.43, +21.8%). Operating Cash Flow (OCF) was ¥103.5B (YoY +82.4%), generating 2.0x of Net income, and Free Cash Flow expanded to ¥72.0B. Cash and deposits accumulated to ¥222.7B (YoY +30.1%), interest-bearing debt was reduced to ¥65.0B (Debt/EBITDA 0.65x). The year-end dividend was ¥33, with a Payout Ratio of 30.3% and FCF coverage of 4.8x, indicating strong shareholder return capacity.
[Revenue] Revenue of ¥637.9B (+7.7%) was led by segment contributions: PR & Advertising Business ¥348.7B (+7.3%), Press Release Distribution Business ¥95.5B (+19.3%), and Direct Marketing Business ¥163.5B (+20.9%). PR & Advertising benefited from stable expansion of strategic PR and taxi signage; Distribution benefited from expansion of the PR TIMES platform customer base and ARPU improvement; Direct Marketing benefited from growth in D2C operations and EC channels. HR Business was ¥29.9B (+0.4%) essentially flat, while Investment Business contracted to ¥2.9B (-88.7%). Revenue mix was PR & Advertising 54.6%, Direct Marketing 25.6%, Distribution 15.0%, and the increased share of the high-margin Distribution business boosted overall profitability.
[Profitability] Cost of sales was ¥211.4B (cost ratio 33.1%), maintaining a gross margin of 66.9%. SG&A was ¥335.3B (SG&A ratio 52.6%) and was controlled to grow only +7.2% versus revenue growth of +7.7%, expanding Operating Income to ¥91.2B (+13.5%). Operating margin improved to 14.3% (prior year 13.6%), reflecting operating leverage. By segment, Distribution posted Operating Income of ¥36.2B (+93.0%, margin 37.9%), expanding high-margin profit; PR & Advertising recorded ¥49.0B (+34.7%, margin 14.0%); Direct Marketing ¥11.4B (+52.2%, margin 7.0%)—all improved. HR Business incurred an operating loss of ¥0.2B, and Investment Business an operating loss of ¥5.2B, remaining in the red. Ordinary Income of ¥91.4B (+19.4%) largely reflected operating profit growth, as non-operating income ¥3.6B (foreign exchange gains, investment partnership income, etc.) and non-operating expenses ¥3.3B (interest expense ¥1.7B, foreign exchange losses ¥1.4B, etc.) roughly offset. Extraordinary items included gains on sales ¥21.5B and impairment losses ¥18.9B, resulting in Pre-tax income of ¥88.9B (+22.0%). After income taxes ¥25.6B (effective tax rate 28.8%) and non-controlling interests ¥12.3B, Net income attributable to owners of parent was ¥51.1B (+21.8%), closing the year with revenue and profit growth.
The PR & Advertising Business posted Revenue ¥348.7B (+7.3%) and Operating Income ¥49.0B (+34.7%), with a margin of 14.0% (improved 2.8pt from 11.2%) driven by improved promotional efficiency and higher project gross margins. The Press Release Distribution Business recorded Revenue ¥95.5B (+19.3%) and Operating Income ¥36.2B (+93.0%), achieving a margin of 37.9% (up 14.4pt from 23.5%), with platform scale advantages and higher customer unit economics driving profit growth. Direct Marketing Business had Revenue ¥163.5B (+20.9%) and Operating Income ¥11.4B (+52.2%), margin 7.0% (up 1.4pt from 5.6%), supported by better product mix and SG&A efficiency. HR Business Revenue was ¥29.9B (+0.4%) with an operating loss of ¥0.2B (prior year operating income ¥0.7B), turning into a loss due to recruitment market fluctuations and upfront investments. Investment Business Revenue fell to ¥2.9B (-88.7%) with an operating loss of ¥5.2B (prior year operating income ¥16.9B), impacted by valuation losses on investment securities and a reduction in deals. Of the companywide Operating Income of ¥91.2B, Distribution accounted for 39.7% and PR & Advertising 53.7%, making these two businesses the pillars of profitability.
[Profitability] Operating margin 14.3% (up 0.7pt from 13.6%), Net margin 8.0% (up 0.9pt from 7.1%), ROE 18.8% (DuPont decomposition: Net margin 8.0% × Total asset turnover 1.35 × Financial leverage 1.74), driven by margin expansion in Distribution and improved profitability in PR & Advertising. [Cash Quality] OCF/Net income 2.0x, Accrual ratio -11.1%, OCF/EBITDA 1.04x, indicating solid cash backing for profits. [Investment Efficiency] Capital expenditure ¥4.6B / Depreciation ¥8.6B = 0.53x, a restrained level with room to expand medium-term growth investments. Goodwill ¥28.6B (10.5% of net assets, 0.29x of EBITDA) at a conservative level. [Financial Soundness] Equity Ratio 57.4% (up 7.6pt from 49.8%), Current Ratio 234.8%, Quick Ratio 224.2%, Cash/Short-term debt 7.7x, indicating very strong short-term liquidity. Interest-bearing debt ¥65.0B (Debt/EBITDA 0.65x), Interest Coverage 53.3x, long-term borrowings ¥36.1B (YoY -40.3%), reflecting high financial safety.
Operating Cash Flow was ¥103.5B (YoY +82.4%). Starting from Pre-tax income ¥88.9B, non-cash expenses such as impairment loss ¥18.9B were added back, and gain on sale of subsidiary equity ¥21.5B was deducted. In working capital, trade receivables increased ¥12.2B, which pressured OCF, but decreases in other receivables ¥15.9B and increases in accounts payable ¥11.1B contributed positively. Inventories decreased ¥1.4B, and after income tax payments ¥27.2B, OCF amounted to ¥103.5B. Investing Cash Flow was -¥31.5B, primarily due to acquisition of subsidiary equity ¥19.0B and intangible asset investments ¥6.3B, partially offset by proceeds from sale of subsidiary equity ¥5.8B. Free Cash Flow was ¥72.0B (OCF ¥103.5B − Investing CF ¥31.5B), ample, and after dividend payments ¥15.0B, repayment of borrowings ¥18.8B, lease liability repayments ¥2.4B and other financing cash flows of -¥20.9B, net increase in cash was ¥51.5B. Year-end cash and deposits of ¥222.7B represented 47.1% of total assets, expanding capacity for strategic investment and shareholder returns.
Recurring earnings were primarily generated by operating profits from PR & Advertising, Distribution, and Direct Marketing, with the majority of Operating Income ¥91.2B coming from core operations. Non-operating items comprised non-operating income ¥3.6B (foreign exchange gains ¥0.8B, investment partnership income ¥0.8B, etc.) and non-operating expenses ¥3.3B (interest expense ¥1.7B, foreign exchange losses ¥1.4B, etc.), roughly offsetting so that Ordinary Income ¥91.4B approximated Operating Income. One-off items included Extraordinary gains ¥21.5B (mainly gain on sale of subsidiary equity) and Extraordinary losses ¥24.1B (impairment loss ¥18.9B, valuation loss on investment securities ¥1.9B, etc.), which affected Net income volatility. OCF ¥103.5B was 2.0x Net income ¥51.1B, with an Accrual ratio of -11.1% and OCF/EBITDA 1.04x, indicating good cash backing. The gap between Ordinary Income and Net income stemmed from extraordinary items and tax burden (effective tax rate 28.8%), while core business profitability remains stable.
Full-year guidance had forecast Revenue ¥680.0B (+6.6%), Operating Income ¥100.0B (+9.7%), and Ordinary Income ¥98.0B (+7.2%). Actuals were Revenue ¥637.9B (vs. forecast -6.2%), Operating Income ¥91.2B (vs. forecast -8.8%), and Ordinary Income ¥91.4B (vs. forecast -6.7%), missing guidance. Factors included the HR Business turning to a loss, significant contraction in Investment Business, and volatility in extraordinary items. Upside in Distribution (+93.0%) and improvement in PR & Advertising (+34.7%) provided support, but losses in negative segments weighed on consolidated results. For the next fiscal year, continued growth in the high-margin Distribution business, operating leverage in PR & Advertising, and profitability improvements in Direct Marketing are expected, while monetization of HR and Investment businesses remain challenges.
The year-end dividend of ¥33 implies a Payout Ratio of 30.3% (Dividend total ¥15.0B / Net income attributable to owners of parent ¥51.1B). Dividend payments represent 20.8% of Free Cash Flow ¥72.0B, and FCF coverage is 4.8x, indicating a sustainable level. The company resumed dividends from ¥0 in the prior year, demonstrating a stable shareholder return stance. No share buyback was disclosed; returns comprise dividends only. Considering cash and deposits ¥222.7B and OCF generation ¥103.5B, there is ample room for future dividend increases.
Segment concentration risk: The PR & Advertising Business accounts for 54.6% of Revenue and 53.7% of Operating Income, so advertising market fluctuations and intensified competition directly affect consolidated results. Although profit growth of +34.7% YoY is strong, resilience in an economic downturn should be monitored.
Volatility from one-off items: Extraordinary gains ¥21.5B (gain on sale of subsidiary equity) and Extraordinary losses ¥24.1B (impairment loss ¥18.9B, valuation loss on investment securities ¥1.9B, etc.) affected approximately 37% of Net income, making it harder to discern core business trends. Impairments in HR and Investment businesses suggest stricter future asset evaluations.
Growth constraint risk from low investment: Capital expenditure ¥4.6B / Depreciation ¥8.6B = 0.53x indicates restrained investment, and insufficient investment in medium-term growth drivers (product enhancement, infrastructure, data/AI investment, etc.) could erode competitiveness. Platform investment for Distribution and brand investment for Direct Marketing are key to sustaining future growth.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 14.3% | 8.1% (3.6%–16.0%) | +6.2pt |
| Net Margin | 3.7% | 5.8% (1.2%–11.6%) | -2.2pt |
Operating Margin exceeds the industry median by 6.2pt, supported by the high profitability of the Distribution business. Net Margin is below the median due to the impact of extraordinary items, but the company maintains an advantage on an Ordinary Income basis.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 7.7% | 10.1% (1.7%–20.2%) | -2.4pt |
Revenue growth is slightly below the industry median, but excluding the contraction in HR and Investment businesses, the growth rate of the three core businesses exceeds the industry average.
※ Source: Company compilation
High-margin expansion in Distribution and operating leverage effect: The Press Release Distribution Business achieved an Operating margin of 37.9% (up 14.4pt from 23.5%), demonstrating platform scale benefits. With Revenue +19.3% and Operating Income +93.0%, fixed-cost dilution is progressing, and continued growth will be a key driver of consolidated margin improvement. Improvement in PR & Advertising margin (14.0%, up 2.8pt from 11.2%) similarly reflects operating leverage; sustaining growth in both businesses points to upside in next-period earnings.
Strengthened financial base and expanded shareholder return capacity: OCF ¥103.5B (YoY +82.4%), Free Cash Flow ¥72.0B, Cash and deposits ¥222.7B (YoY +30.1%) indicate materially improved cash generation and liquidity. Interest-bearing debt was reduced to ¥65.0B (Debt/EBITDA 0.65x) and Interest Coverage is 53.3x, evidencing very strong financial resilience. With a Payout Ratio of 30.3% and FCF coverage 4.8x, return capacity is ample, supporting continued stable dividends and potential increases. There is also capacity for strategic investments and M&A, enabling a financial structure capable of balancing growth investment and shareholder returns.
Monetization of loss-making businesses and optimization of investment levels: The HR Business turned to an operating loss (¥0.2B) and the Investment Business contracted substantially (operating loss ¥5.2B), diluting consolidated margins. The restrained investment level (CapEx/Depreciation 0.53x) contributes to short-term cash generation but may become a bottleneck for medium-term growth drivers (product enhancement, data/AI investment, etc.). Monetizing loss-making segments and increasing growth investment are keys to sustainable growth from the next fiscal year onward.
This report was automatically generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any specific securities. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your responsibility; consult a professional advisor as necessary.