CASIO COMPUTER CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥132.65B
• Operating Income: ¥9.49B
• Net Income: ¥3.57B
• EPS: ¥35.30

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Casio Computer Co., Ltd. (TSE: 6952) reported FY2026 Q2 consolidated results under JGAAP showing resilient profitability despite modest topline pressure. Revenue was ¥132.7bn, down 3.1% YoY, indicating soft demand or FX headwinds in core categories. Gross profit was ¥61.1bn with a robust gross margin of 46.0%, suggesting pricing discipline and/or a favorable mix offsetting cost pressures. Operating income fell 8.2% YoY to ¥9.49bn, implying negative operating leverage as fixed SG&A did not fully flex with lower sales. Ordinary income reached ¥10.73bn, outpacing operating income due to positive non-operating items, while interest expense remained low at ¥0.26bn. Net income surged 124.9% YoY to ¥8.05bn, aided by lower non-operating burdens and a lighter effective tax versus the prior year. EBITDA was ¥14.73bn (11.1% margin), evidencing adequate cash earnings capacity relative to sales. DuPont decomposition shows a net margin of 6.07%, asset turnover of 0.394x, and financial leverage of 1.50x, yielding ROE of 3.59%, which is modest for an electronics company. Cash generation was strong with operating cash flow of ¥12.95bn, representing 1.61x net income, indicating solid earnings quality and likely favorable working capital dynamics. The balance sheet remains conservative with total liabilities of ¥112.7bn against equity of ¥224.1bn (liability-to-equity ~0.50x), and liquidity is ample with a current ratio of 3.84x and working capital of ¥174.5bn. Interest coverage is very strong at 36.8x, reflecting low financial risk and ample headroom against rate movements. Reported effective tax rate in the summary metrics shows 0.0%, but using disclosed tax expense and ordinary income suggests a more realistic ~12% in this period. Investing cash flow, cash balance, inventories, and share data are not disclosed in this dataset (zeros indicate unreported), which limits deeper capital allocation and inventory efficiency analysis. Dividend data for the period is also not disclosed; the shown DPS and payout ratios are placeholders and should not be interpreted as actual zero. Overall, Casio demonstrates decent margin quality, healthy cash conversion, and a strong balance sheet, albeit with subdued ROE and pressure on operating profit from lower sales.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 6.07%
• asset_turnover: 0.394x
• financial_leverage: 1.50x
• calculated_ROE: 3.59%
• interpretation: ROE is primarily constrained by modest asset turnover and mid-single digit net margin; balance sheet leverage is low and not a major ROE driver. margin_quality:
• gross_margin: 46.0% (¥61.1bn/¥132.7bn), strong for consumer electronics, implying favorable mix and/ or pricing discipline.
• operating_margin: 7.16% (¥9.49bn/¥132.7bn), down YoY alongside revenue decline, indicating some fixed-cost drag.
• ordinary_margin: 8.09% (¥10.73bn/¥132.7bn), boosted by net non-operating gains.
• net_margin: 6.07%, aided by lower non-operating burden and relatively light tax this period.
• EBITDA_margin: 11.1%, consistent with adequate cash earnings relative to sales. operating_leverage: Revenue declined 3.1% YoY while operating income fell 8.2% YoY, evidencing negative operating leverage as SG&A did not fully flex. The spread between gross and operating margins suggests SG&A absorption remains a key lever for margin recovery.

Growth Assessment

revenue_sustainability: Topline contraction of 3.1% YoY indicates softer demand or FX headwinds; product and geographic mix likely influenced the relatively resilient gross margin. profit_quality: Despite lower sales, gross margin held at 46.0%, and ordinary income exceeded operating income, suggesting non-operating support (e.g., FX gains, other income). Interest expenses are minimal, limiting drag on bottom line. outlook: Near-term growth hinges on stabilizing demand in core categories and maintaining pricing/mix discipline. Operating leverage can turn positive if volumes recover or if SG&A efficiencies materialize. Non-operating contributions may normalize; sustaining profit growth will depend on operational levers rather than financial ones.

Financial Health

liquidity:

• current_ratio: 384.2% (¥235.9bn/¥61.4bn), indicating ample short-term coverage.
• quick_ratio: 384.2% (inventories not disclosed; ratio equals current ratio in this dataset).
• working_capital: ¥174.5bn, providing significant buffer for operations and investment needs. solvency:
• debt_to_equity: 0.50x (total liabilities/equity), reflecting conservative leverage.
• interest_coverage: 36.8x (operating income/interest expense), very strong and supportive against rate increases.
• equity_base: Total equity of ¥224.1bn vs. assets of ¥336.6bn; financial leverage 1.50x is modest. capital_structure: Balance sheet relies primarily on equity with moderate liabilities. No evidence of near-term liquidity stress; ability to fund operations and shareholder returns from internal cash flow appears solid.

Cash Flow Quality

earnings_quality: OCF of ¥12.95bn vs. net income of ¥8.05bn yields OCF/NI of 1.61x, indicating strong cash conversion supported by non-cash charges (D&A ¥5.24bn) and likely working capital release. FCF_analysis: Investing cash flow is not disclosed in this dataset; therefore, free cash flow cannot be reliably derived. On a proxy basis, OCF of ¥12.95bn provided coverage for total financing outflows of ¥10.89bn. working_capital: Current assets are sizable relative to current liabilities, but inventories and receivables/payables detail are not disclosed here, limiting analysis of turnover and cycle efficiency.

Dividend Sustainability

payout_ratio_assessment: EPS is ¥35.30 with net income of ¥8.05bn; DPS is not disclosed in this dataset (displayed as 0.00), so an actual payout ratio cannot be determined. FCF_coverage: Free cash flow is not derivable due to absent investing cash flow and capex detail; however, OCF of ¥12.95bn would have been sufficient to cover the period’s total financing outflows of ¥10.89bn, implying capacity for shareholder returns if maintained. policy_outlook: Without disclosed DPS or stated policy in this period, dividend trajectory cannot be inferred. Given low leverage and healthy liquidity, capacity exists, but sustainability depends on maintaining OCF and avoiding adverse working capital swings.

Risk Assessment

Business Risks:

• Demand cyclicality in consumer electronics categories (e.g., timepieces, education devices, musical instruments).
• Pricing pressure and product mix shifts impacting gross margin.
• Technology substitution and competition from smart devices.
• FX volatility affecting export sales and margins.
• Supply chain constraints and component cost fluctuations.
• Geographic concentration risks and geopolitical exposure in key markets.

Financial Risks:

• ROE at 3.59% is modest, creating pressure to improve capital efficiency.
• Potential normalization of non-operating gains that supported ordinary income.
• Working capital sensitivity not fully observable due to limited disclosure on inventories and receivables.
• Tax rate variability; an unusually low rate in the prior year base may distort YoY comparisons.
• Uncertainty around capex and investment needs given lack of investing CF disclosure.

Key Concerns:

• Negative operating leverage with revenue decline weighing on operating income.
• Dependence on non-operating items to bridge operating-to-ordinary income gap.
• Limited visibility on inventory levels and capex, constraining FCF assessment.

Investment Implications

Key Takeaways:

• Topline declined 3.1% YoY, but gross margin remained strong at 46.0%.
• Operating margin compressed to 7.16%, reflecting negative operating leverage.
• Ordinary income exceeded operating income, indicating supportive non-operating items.
• ROE is modest at 3.59%, constrained by both margin and asset turnover.
• Cash conversion is solid with OCF/NI at 1.61x.
• Balance sheet strength (current ratio 3.84x; liabilities/equity 0.50x) reduces financial risk.
• Interest coverage of 36.8x provides ample cushion against rate or earnings shocks.
• Dividend capacity exists from OCF, but actual DPS/payout not disclosed this period.
• Data gaps (inventories, investing CF, cash balance) limit deeper capital allocation and efficiency analysis.

Metrics to Watch:

• Revenue growth by segment and geography; FX impact on sales and margins.
• Operating margin trajectory and SG&A efficiency.
• OCF/NI ratio and working capital movements (inventory and receivables days).
• Capex levels and investing cash flows to assess true FCF.
• Gap between operating and ordinary income (sustainability of non-operating gains).
• Tax rate normalization trends and impacts on net income.
• Capital return announcements (dividends/buybacks) and balance sheet leverage.

Relative Positioning: Within Japan-listed consumer electronics peers, Casio exhibits strong balance sheet conservatism and cash conversion but delivers subdued ROE; margin resilience is a positive, while achieving sustainable growth and operating leverage improvement remains the key differentiator.

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