SIGMAXYZ Holdings Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥12.56B
• Operating Income: ¥3.20B
• Net Income: ¥2.29B
• EPS: ¥26.99

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

SigmaMaxis Holdings (6088) reported FY2026 Q2 consolidated results under JGAAP showing flat topline but improved operating profitability. Revenue was ¥12.56bn, essentially unchanged YoY, while operating income rose 12.7% to ¥3.20bn, indicating strong operating leverage and disciplined cost control. Gross profit reached ¥5.65bn with a gross margin of 45.0%, underscoring a healthy value-add per yen of revenue. Operating margin expanded to approximately 25.5%, well above typical domestic consulting/integration peers. Net income declined slightly by 1.2% to ¥2.26bn, implying negative below-the-line impacts despite stronger operations. The DuPont-derived ROE was 15.66%, driven by an 18.03% net margin, 0.695x asset turnover, and modest 1.25x financial leverage. Implied ROA is around 12.5%, reflecting efficient asset utilization for a consulting-oriented business. Cash generation was solid but trailed earnings, with operating cash flow (OCF) at ¥1.73bn and an OCF/Net Income ratio of 0.76, suggesting working capital absorption or timing effects. Liquidity remains strong with a current ratio of roughly 294% and working capital of ¥9.29bn, providing ample buffer for project execution and seasonality. The balance sheet is conservative: liabilities of ¥5.47bn versus equity of ¥14.46bn suggest low leverage and high solvency capacity. Interest expense was negligible (¥0.35m), yielding an interest coverage of over 9,000x, highlighting minimal financial risk. While the provided effective tax rate metric reads 0.0%, the disclosed income tax of ¥654m versus ordinary income of ¥3.38bn implies an effective tax rate in the ~19–20% range. Investing cash flows were not disclosed this period, limiting visibility into capex and inorganic initiatives. Financing cash outflows of ¥2.77bn indicate meaningful shareholder returns or other financing uses despite undisclosed dividend per share, which is reported as 0.00 in this dataset. Overall, SigmaMaxis combines high margins, robust ROE, and low leverage; the main near-term questions center on revenue growth momentum, cash conversion, and the sustainability of elevated operating margins. Data gaps (e.g., investing CF, dividends, shares) temper precision but the available non-zero data points support a view of solid fundamentals with operational improvements.

Profitability Analysis

ROE_decomposition: Calculated ROE is 15.66%, driven by Net Profit Margin 18.03% × Asset Turnover 0.695 × Financial Leverage 1.25. Implied ROA is ~12.5% (2,264m / 18,062m), pointing to strong underlying profitability with modest leverage. margin_quality: Gross margin stands at 45.0% (5,648m/12,558m). Operating margin is ~25.5% (3,198m/12,558m), supported by low D&A (¥116m), indicating a largely people/fee-based cost structure. EBITDA margin is 26.4%, only slightly above OPM, underscoring low non-cash charges. Net margin is 18.03%, compressed versus OPM by taxes (~19–20% implied) and minor financial/other items. operating_leverage: Operating income grew +12.7% YoY on flat revenue, implying favorable mix, utilization gains, and/or SG&A efficiency. The gap between revenue growth (0.0%) and OI growth (+12.7%) evidences positive operating leverage and disciplined cost management.

Growth Assessment

revenue_sustainability: Revenue was flat YoY at ¥12.56bn, suggesting stable demand but limited expansion this half. For a consulting-centric model, growth typically depends on headcount, utilization, and pricing; without backlog or headcount data, sustainability is uncertain. profit_quality: Despite stagnant revenue, margin expansion drove profit growth at the operating level, indicating improved mix (higher-value projects) or tighter delivery. The small decline in net income indicates below-the-line pressure (taxes/other) rather than core weakness. outlook: Key to forward growth will be pipeline conversion, enterprise DX budgets, and capacity expansion. If utilization and pricing remain firm, the company can maintain elevated margins; however, re-acceleration in revenue will require demand tailwinds or strategic wins. Watch for backlog/book-to-bill and hiring trends to gauge H2 momentum.

Financial Health

liquidity: Current assets ¥14.07bn vs current liabilities ¥4.78bn yield a current ratio of ~294% and quick ratio ~294% (inventories not disclosed). Working capital is ¥9.29bn, providing robust short-term flexibility. solvency: Total liabilities are ¥5.47bn against equity of ¥14.46bn; liabilities-to-equity ≈0.38x. Interest expense is de minimis (¥0.35m) with interest coverage ~9,243x (EBIT/interest), indicating very low financial risk. capital_structure: Financial leverage at 1.25x (assets/equity) is modest. The provided equity ratio is 0.0% in the dataset; based on disclosed totals, implied equity ratio is roughly 80% (14.46bn/18.06bn), indicating a conservative balance sheet.

Cash Flow Quality

earnings_quality: OCF of ¥1.73bn vs net income of ¥2.26bn gives OCF/NI of 0.76. This is acceptable but below 1.0, suggesting working capital outflows or timing differences in collections/billing. With low D&A, cash earnings should broadly track profits over time. FCF_analysis: Investing CF is undisclosed (reported as 0). As such, true free cash flow cannot be precisely computed; the provided FCF of 0 reflects missing data rather than zero generation. Using OCF as a proxy implies pre-investment cash generation of ~¥1.73bn in the half. working_capital: Given the consulting model, receivables and unbilled revenue typically drive working capital variability. The sub-1.0 OCF/NI suggests either higher receivables or lower advances; monitoring DSO and contract liability movements will be important.

Dividend Sustainability

payout_ratio_assessment: The dataset shows DPS and payout ratio as 0.00 and 0.0%, respectively; this likely reflects non-disclosure in this period rather than actual zero payments. Net income was ¥2.26bn, providing ample capacity for distributions if policy permits. FCF_coverage: True FCF is not available due to undisclosed investing CF. OCF of ¥1.73bn indicates capacity before investments; however, coverage of dividends cannot be assessed quantitatively this period. policy_outlook: Financing CF outflows of ¥2.77bn suggest shareholder returns and/or other financing uses occurred. Without DPS disclosure, we infer the company continues capital returns, but clarity on dividend policy and any buyback program is needed to assess sustainability.

Risk Assessment

Business Risks:

• Project-based revenue volatility tied to client IT/DX budgets and macro conditions
• Utilization rate fluctuations impacting margins and profitability
• Pricing pressure and competition from global and domestic consulting/integration firms
• Talent acquisition and retention risk in a tight consulting labor market
• Client concentration risk if large accounts dominate revenue
• Execution risk on complex transformation projects and fixed-price engagements

Financial Risks:

• Cash conversion risk (OCF/NI at 0.76) due to receivables and billing timing
• Working capital swings affecting quarterly free cash flow
• Data gaps on investing CF and interest-bearing debt obscure capex and leverage trends
• Potential tax rate variability (implied ~19–20%) affecting net profit

Key Concerns:

• Flat revenue trajectory despite strong margin performance
• Sub-1.0 OCF/NI indicating timing pressure on cash conversion
• Limited disclosure on investing cash flows and dividend details

Investment Implications

Key Takeaways:

• Strong profitability: OPM ~25.5%, EBITDA margin 26.4%, net margin 18.0%
• ROE 15.7% supported by high margins and low leverage
• Revenue flat YoY; operating income up 12.7% evidencing cost/mix leverage
• Robust liquidity with current ratio ~294% and minimal interest burden
• OCF/NI at 0.76 warrants monitoring of working capital discipline
• Financing outflows (¥2.77bn) imply active capital returns despite undisclosed DPS

Metrics to Watch:

• Backlog/book-to-bill and revenue growth re-acceleration
• Utilization rates, headcount growth, and average billing rate
• OCF/NI, DSO, and contract liabilities to track cash conversion
• Operating margin sustainability and SG&A ratio
• Capex/investing CF disclosure for true FCF
• Shareholder return policy: DPS, payout ratio, and buybacks

Relative Positioning: Within domestic consulting/integration peers, SigmaMaxis exhibits above-average margins and ROE with a conservatively levered balance sheet; primary differentiation hinges on sustaining high utilization and mix while reigniting topline growth.

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