RareJob,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥4.64B
• Operating Income: ¥38M
• Net Income: ¥128M
• EPS: ¥-2.80

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

RareJob (6096) reported FY2026 Q2 consolidated results under JGAAP showing top-line resilience amid profitability pressure. Revenue was ¥4,643 million, down 3.5% YoY, indicating a modest contraction in demand or mix that did not collapse the business base. Gross profit of ¥2,068 million implies a robust gross margin of 44.5%, suggesting pricing power and/or cost discipline at the direct cost level remain intact. However, operating income fell sharply to ¥38 million (-82.5% YoY), compressing operating margin to approximately 0.8% and signaling significant operating expense pressure or deliberate investment spending. Ordinary income of ¥44 million remained positive, aided by manageable financial costs (interest expense ¥8 million), but bottom line turned to a net loss of ¥26 million (net margin -0.56%). The DuPont profile shows ROE of -1.39% driven primarily by a negative net margin, with asset turnover of 0.724 and financial leverage of 3.43 amplifying the loss at the equity level. Despite the accounting loss, operating cash flow was positive at ¥288 million, resulting in a high OCF-to-net income ratio of -11.06, indicating earnings quality that is stronger in cash terms than accrual terms for the period. Liquidity is adequate with a current ratio of 141.2% and working capital of approximately ¥1,004 million, providing cushion for near-term obligations. Solvency appears acceptable with debt-to-equity of 2.12x and interest coverage of 4.7x, though earnings softness narrows headroom. Equity-to-asset ratio calculated from non-zero items is about 29.1% (¥1,869m equity / ¥6,415m assets), even though the reported field shows 0.0% (unreported). EBITDA was ¥153 million (EBITDA margin ~3.3%), highlighting limited operating leverage at current scale and cost structure. Dividend remains suspended (DPS ¥0), which is prudent given negative net income and uncertain free cash flow disclosure (investing cash flows not disclosed). With inventories unreported (likely not applicable for a service-heavy model), working capital dynamics hinge on receivables and payables management. Overall, the company maintains cash-generative operations and adequate liquidity, but profitability compression and negative ROE warrant close monitoring of cost actions, pricing, and utilization. Data gaps (cash balance, investing CF, share count) limit precision in FCF, per-share, and capital intensity assessments, but the available non-zero metrics support a cautious view on near-term earnings repair potential. Management’s ability to stabilize operating margin while sustaining gross margin will be critical for restoring ROE.

Profitability Analysis

ROE_decomposition: ROE -1.39% = Net margin (-0.56%) × Asset turnover (0.724x) × Financial leverage (3.43x). The negative net margin is the dominant driver of the negative ROE, while moderate asset turnover and relatively high leverage amplify the margin effect. margin_quality: Gross margin is solid at 44.5%, indicating healthy unit economics. However, operating margin is only ~0.8% (¥38m OI on ¥4,643m revenue), pointing to elevated SG&A, investments in growth, or cost inflation. The spread between gross and operating margin suggests overhead absorption issues and/or marketing and development costs weighing on profitability. operating_leverage: With EBITDA margin at 3.3% and operating margin at 0.8%, incremental sales have limited flow-through under the current cost base. Given the revenue decline (-3.5% YoY) and an 82.5% contraction in operating income, operating leverage is adverse at present: small revenue declines disproportionately reduced profits. Restoring margin likely requires SG&A discipline and utilization gains.

Growth Assessment

revenue_sustainability: Revenue decreased 3.5% YoY to ¥4,643m, implying soft demand or product mix headwinds but not a structural collapse. The high gross margin suggests the core offering retains value, though volume or pricing may be under pressure. profit_quality: Ordinary income remained positive (¥44m) but net income was negative (¥-26m). The positive OCF (¥288m) relative to a net loss implies non-cash charges and working capital helped cash generation, signaling better cash-than-accrual earnings quality this quarter. outlook: Near-term profit recovery hinges on stabilizing sales, improving operating efficiency, and containing SG&A. If revenue stabilizes and cost measures take effect, margins could revert toward historical averages; however, the current low operating margin suggests only limited buffer against further top-line softness.

Financial Health

liquidity: Current assets ¥3,444m vs current liabilities ¥2,440m yields a current ratio of 141.2% and working capital of ~¥1,004m, indicating adequate near-term liquidity. Quick ratio matches the current ratio due to unreported inventories, consistent with a service-oriented model. solvency: Debt-to-equity is 2.12x, implying moderate leverage. Interest coverage at 4.7x indicates manageable debt service capacity, albeit with reduced headroom due to compressed operating profits. capital_structure: Total assets ¥6,415m and total equity ¥1,869m imply an equity ratio of ~29.1% (calculated from available non-zero data). Leverage (financial leverage 3.43x) supports ROE in normal times but magnifies losses when margins are negative.

Cash Flow Quality

earnings_quality: Operating CF of ¥288m versus net income of ¥-26m (OCF/NI -11.06) indicates strong cash conversion driven by non-cash items (e.g., depreciation ¥115m) and/or favorable working capital movements. This suggests current-period earnings understate cash generation. FCF_analysis: Investing cash flow is unreported (shown as 0), preventing a clean free cash flow calculation. EBITDA of ¥153m and positive OCF support the view that underlying cash generation before investment is positive, but capex intensity and capitalized development are unknown for the period. working_capital: With inventories unreported and working capital at ~¥1,004m, cash conversion likely depends on receivables collection and payables terms. Positive OCF suggests working capital was a tailwind or neutral this period.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0 and payout ratio is 0%, appropriate given negative net income (-¥26m). FCF_coverage: FCF coverage cannot be assessed due to unreported investing cash flows; reported FCF coverage metric is 0.00x but should be treated as not disclosed rather than zero. policy_outlook: Given negative earnings and the focus on restoring operating margin, a conservative dividend stance is likely to continue until profitability normalizes and consistent FCF is demonstrable.

Risk Assessment

Business Risks:

• Demand softness leading to further revenue declines (-3.5% YoY in the period).
• Operating cost inflation or elevated growth investments depressing operating margin (0.8%).
• Competitive pricing pressure in online education/services affecting gross-to-operating margin translation.
• Execution risk in SG&A optimization and utilization improvements to restore margins.

Financial Risks:

• Negative ROE (-1.39%) with leverage (D/E 2.12x) amplifying earnings volatility.
• Reduced interest coverage (4.7x) if operating profits decline further.
• Limited buffer if liquidity tightens despite current ratio of 141.2%.
• Potential cash flow variability due to working capital swings.

Key Concerns:

• Sharp drop in operating income (-82.5% YoY) and negative net margin (-0.56%).
• Data gaps on cash balances and investing cash flows, obscuring true FCF.
• Sustaining 44.5% gross margin while cutting SG&A to lift operating margin.

Investment Implications

Key Takeaways:

• Top line down 3.5% YoY to ¥4,643m; core gross margin resilient at 44.5%.
• Operating margin compressed to ~0.8%; ordinary income positive but net loss of ¥26m.
• ROE -1.39% driven by negative margin; asset turnover 0.724x; leverage 3.43x.
• Operating cash flow robust at ¥288m vs accounting loss, indicating strong cash conversion.
• Liquidity adequate (current ratio 141.2%, working capital ~¥1.0bn); interest coverage 4.7x.
• Equity ratio ~29.1% based on available non-zero items, despite reported field being unreported.

Metrics to Watch:

• Operating margin trajectory and SG&A as a percentage of sales.
• Revenue growth reacceleration and retention/ARPU trends.
• Cash conversion cycle components (receivables and payables) given OCF strength.
• Capex and development investments (investing CF) to gauge true FCF.
• Interest coverage and D/E as earnings normalize.
• Sustainability of gross margin at ~44–45%.

Relative Positioning: Within education and online service peers, RareJob shows comparatively strong gross margins but weaker operating leverage in the period, with adequate liquidity and moderate leverage providing runway to execute a margin recovery.

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