Ubiteq,INC. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥386M
• Operating Income: ¥31M
• Net Income: ¥-77M
• Earnings per Unit (EPU): ¥2.11

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Unit Information

Segment Information

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Verdict: FY2026 Q1 appears profitable on the face of reported figures, with strong liquidity and conservative leverage, but the quarter contains internal data inconsistencies that limit confidence in margin analysis and earnings quality. Revenue was 3.86 (億円), up a robust 51.9% YoY, indicating a strong topline rebound or project-driven uptick. Reported operating income was 0.31 (億円), translating into an operating margin of roughly 8.0% based on provided metrics. Net income was also 0.31 (億円), implying a net margin of about 8.0% and EPS of 2.11 JPY. Balance sheet quality is a highlight: cash and deposits of 12.43 (億円) underpin a very high current ratio of 854.6% and working capital of 15.02 (億円). Leverage appears conservative with a reported D/E of 0.13x and total liabilities of only 2.04 (億円). However, there are material internal inconsistencies: revenue minus cost of sales implies gross profit of 1.83 (億円), not the 0.51 (億円) disclosed; further, gross profit of 0.51 minus SG&A of 1.27 would ordinarily yield an operating loss, yet operating income is reported positive at 0.31 (億円). Also, profit before tax is reported at -0.75 (億円) while net income is +0.31 (億円) with minimal tax expense (0.01), which is arithmetically inconsistent absent large undisclosed extraordinary gains. Due to these inconsistencies, precise margin decomposition (e.g., gross vs operating drivers) cannot be reliably concluded. We cannot quantify margin expansion/compression in basis points versus prior periods because prior-period profit metrics were not disclosed and current-line items are internally inconsistent. Operating cash flow was unreported, so we cannot assess earnings quality through OCF/NI reconciliation or working capital impacts. Equity remains solid at 15.46 (億円), but retained earnings are negative (-0.83), indicating a still-present accumulated deficit despite the current quarter’s profit. ROE (calculated) is 2.0% for the quarter based on provided DuPont inputs; the low asset turnover of 0.221 reflects a cash-heavy balance sheet. If the reported ROIC of 10.2% is comparable to management’s definition, it suggests acceptable investment efficiency, but the source context is unclear for this issuer. Forward-looking, the strong liquidity gives operational flexibility, yet profit sustainability is uncertain without clarity on gross profitability, the nature of the revenue surge, and reconciliation of PBT to net income. Monitoring disclosure corrections in the next filing, plus any commentary on project timing and mix, will be key to validating the run-rate of margins and earnings.

Profitability Analysis

ROE decomposition (DuPont): Net Profit Margin (NPM) ~8.0% × Asset Turnover (AT) 0.221 × Financial Leverage (FL) 1.13x ≈ ROE 2.0%. The primary drag on ROE is low asset turnover, driven by very high cash levels relative to sales (cash and deposits 12.43 (億円) vs total assets 17.50 (億円)). NPM appears healthy at ~8% this quarter, but the gross profit, SG&A, and operating income lines are internally inconsistent, so the quality of reported NPM cannot be validated. The business reason for weak AT likely stems from a conservative balance sheet posture and/or timing of receipts relative to cash accumulation; the YoY revenue surge also suggests early-cycle scaling with assets not yet optimized. Sustainability: improving AT would require either sustained revenue growth or capital deployment of excess cash; NPM sustainability is unclear without reconciled gross margin. Concerning trends: SG&A reported at 1.27 (億円) versus gross profit reported at 0.51 (億円) suggests an apparent negative operating leverage, but this conflicts with positive operating income; we flag this as a data inconsistency rather than a structural cost overrun. No equity-method income relevance here (non-trading company).

Growth Assessment

Revenue growth +51.9% YoY is strong, indicating either successful project deliveries or recovery in core demand. Profit growth cannot be benchmarked due to missing YoY operating and net income comparatives. Without a reliable gross margin, we cannot isolate mix versus pricing effects. The reported operating margin (~8%) is consistent with a profitable quarter, but reconciliation issues (gross profit and PBT inconsistencies) prevent high-confidence conclusions on margin quality. Near-term sustainability depends on order backlog, project timing, and repeatability of Q1 wins; none were disclosed. Efficiency (AT 0.221) is low, so revenue scaling has headroom to lift returns if volumes persist. Outlook: if the topline can hold above 3.5–4.0 (億円) per quarter and SG&A remains stable, operating leverage could support continued profitability; however, this is contingent on validated gross margins in subsequent disclosures.

Financial Health

Liquidity is very strong: current assets 17.01 (億円) vs current liabilities 1.99 (億円) yield a current ratio of 8.55x, far above the healthy benchmark (>1.5x). Quick ratio equals current ratio given minimal inventories reported, reinforcing liquidity strength. No warning triggers: Current Ratio >> 1.0 and D/E of 0.13x is conservative (<1.5x). Maturity mismatch risk appears low: cash and deposits 12.43 (億円) cover current liabilities multiple times; accounts receivable 2.40 (億円) further support near-term obligations. Interest-bearing debt details are unreported; however, total liabilities are small at 2.04 (億円), suggesting low solvency risk. Off-balance sheet obligations are not disclosed; no guarantees/commitments noted in provided data. Equity is robust at 15.46 (億円) though retained earnings remain negative (-0.83), implying limited historical profitability; capital stock and surplus provide the equity cushion. No short-term refinancing risks evident from the snapshot.

Cash Flow Quality

Operating cash flow was not disclosed, so OCF/Net Income cannot be computed; we cannot validate accrual quality or working capital effects. Free cash flow and capex are unreported, preventing assessment of reinvestment needs versus cash generation. Given the large cash balance and small liability base, near-term liquidity is not a concern, but earnings quality remains unverified. No signs of working capital manipulation can be assessed from the limited data (inventories and payable turnover detail missing). Absent OCF, we cannot confirm whether the quarter’s profit was cash-conversion friendly.

Dividend Sustainability

Dividend data were not disclosed for the period; DPS and payout ratios are N/A. With net income positive and a significant cash buffer, capacity to pay a dividend exists in theory, but the accumulated deficit (retained earnings -0.83 (億円)) may constrain policy flexibility under JGAAP corporate practice. FCF coverage cannot be assessed without OCF and capex. Policy outlook remains unknown; any resumption or increase would require demonstrated cash-generative profitability across multiple quarters and resolution of the reported line-item inconsistencies.

Risk Assessment

Business Risks:

• Revenue concentration risk given project-like growth (+51.9% YoY) without disclosed customer or backlog detail
• Margin uncertainty due to conflicting gross profit and operating income disclosures
• Execution risk in scaling with low asset turnover (0.221), implying underutilized assets or conservative cash hoarding
• Potential product mix and pricing risk if growth driven by lower-margin contracts

Financial Risks:

• Data inconsistency between PBT (-0.75 (億円)) and net income (+0.31 (億円)) with minimal tax, obscuring earnings quality
• Accumulated deficit (retained earnings -0.83 (億円)) despite current profit, highlighting thin historical profit buffers
• Limited visibility into interest-bearing debt and lease obligations (unreported), though total liabilities are small

Key Concerns:

• Inability to validate gross margin (Revenue 3.86 - COGS 2.03 should yield GP 1.83 (億円), not 0.51 (億円))
• SG&A (1.27 (億円)) vs reported GP (0.51 (億円)) suggests an operating loss absent adjustments, yet OP is +0.31 (億円)
• Unreported cash flow statements impede earnings quality assessment and dividend capacity analysis

Investment Implications

Key Takeaways:

• Topline rebounded strongly (+51.9% YoY) to 3.86 (億円)
• Reported profitability: operating income 0.31 (億円), net income 0.31 (億円), NPM ~8%
• Balance sheet strength: cash 12.43 (億円), current ratio 8.55x, D/E 0.13x
• ROE is modest at 2.0% due to low asset turnover (0.221) and low leverage (1.13x)
• Material inconsistencies in P&L lines and PBT vs NI require clarification before relying on margins

Metrics to Watch:

• Corrected gross profit and gross margin in the next filing; reconciliation of COGS and SG&A to operating income
• Operating cash flow and FCF; target OCF/NI > 1.0 for robust earnings quality
• Revenue run-rate sustainability (>3.5–4.0 (億円) per quarter) and order backlog disclosure
• Asset turnover improvement (AT trending toward >0.5 over time) to lift ROE
• Resolution of retained earnings deficit through sustained profitability

Relative Positioning: Within small-cap electronics/IoT peers, the company shows superior liquidity and low leverage but lags on validated profitability transparency; if growth sustains and disclosures reconcile, operating leverage could compare favorably, yet current inconsistencies place it below peers on earnings quality visibility.

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