PORT INC. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥12.94B
• Operating Income: ¥1.86B
• Net Income: ¥1.27B
• EPS: ¥95.40

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

Port Inc. (TSE:7047) delivered strong topline momentum in FY2026 Q2 (IFRS, consolidated), with revenue of 129.36 (100M JPY), up 30.4% YoY, indicating robust demand across its digital media and marketing solutions. Gross profit reached 68.11, reflecting a healthy gross margin of 52.7%, consistent with asset-light, content- and performance-marketing–driven models. Operating income rose 18.4% YoY to 18.56, implying some operating margin compression to 14.4% as SG&A investments outpaced gross profit growth. Net income increased 31.4% YoY to 12.61, supported by a stable effective tax rate of 32.0% and no visible drag from unreported non-operating items. DuPont decomposition shows a calculated ROE of 13.3%, driven by a 9.8% net margin, 0.485x asset turnover, and 2.82x financial leverage, indicating balanced profitability and efficiency. EBITDA of 21.83 (margin 16.9%) and D&A of 3.27 confirm a capital-light operating base with solid cash earnings. Operating cash flow (OCF) of 18.92 equates to 1.50x net income, signaling good earnings quality and cash conversion. Free cash flow (FCF) was negative at -13.03, primarily due to sizable investing cash outflows of -31.95, which appear growth-oriented rather than maintenance capex (capex only -1.20). Financing cash flow was a net inflow of 14.34, despite share repurchases of -5.35 and dividends of -0.26, suggesting incremental debt or equity funding to support investments. The balance sheet shows total assets of 266.53 and equity of 94.47 (equity ratio 35.5%), with liabilities-to-equity at 1.51x, a moderate leverage posture for a recurring-revenue media platform. Liquidity granularity is limited as current liabilities and cash composition are unreported; cash and equivalents stand at 25.43. Accounts receivable are 40.20, implying a DSO of roughly mid-50s days, reasonable for the business model. Dividend intensity remains low, with a calculated payout ratio of 2.8%, consistent with a reinvestment-led strategy supplemented by opportunistic buybacks. Overall, Port is executing on growth with acceptable profitability and cash conversion, while leaning on external financing to fund inorganic/strategic investments. Key watchpoints are margin discipline amid growth investments, investment returns on deploying -31.95 in investing CF, and maintenance of the equity ratio near mid-30s%. Data limitations (notably non-operating items, debt detail, and current liabilities) constrain full ratio analysis, but available metrics point to healthy fundamentals with active capital allocation.

Profitability Analysis

ROE_decomposition: Calculated ROE 13.3% = Net margin 9.8% × Asset turnover 0.485 × Financial leverage 2.82x. Net margin benefited from solid gross margin (52.7%) and controlled D&A, while leverage contributed meaningfully given an equity ratio of 35.5%. margin_quality: - Gross margin: 52.7% (68.11/129.36), robust for a digital/media platform, indicating favorable unit economics. - Operating margin: ~14.4% (18.56/129.36), down YoY from ~15.8% (back-calculated), reflecting increased SG&A investment (42.4% of revenue). - EBITDA margin: 16.9%, showcasing healthy operating cash earnings with modest D&A (3.27). - Effective tax rate: 32.0%, within a normal range for Japan-based IFRS filers. operating_leverage: Revenue grew 30.4% YoY while operating income rose 18.4% YoY, implying negative operating leverage in the period due to step-up in SG&A to support growth. SG&A ratio at 42.4% suggests investment in salesforce, marketing, and product development. With revenue scale, margin recapture is plausible if SG&A growth normalizes below gross profit growth.

Growth Assessment

revenue_sustainability: Topline growth of +30.4% YoY indicates strong demand and likely expansion in core verticals (e.g., HR/finance-related media and performance marketing). Recurring/retainer-type client relationships and lead-generation exposure generally support durability, though macro and advertiser budgets can introduce cyclicality. profit_quality: Net income +31.4% YoY outpaced operating income, with no reported drag from non-operating items. OCF/NI at 1.50x corroborates cash-backed earnings. EBITDA growth implied by higher OI and steady D&A indicates operational scalability, albeit with near-term SG&A intensity. outlook: Short-term, revenue momentum appears intact; key will be balancing growth with margin discipline. Medium-term, conversion of investing CF (-31.95) into revenue/EBITDA accretion is critical. If acquisition or product investments integrate well, asset turnover may improve toward ~0.5–1.0 annualized, supporting ROE at low-teens or better.

Financial Health

liquidity: Cash and equivalents of 25.43 provide flexibility, but current liabilities are unreported, so current and quick ratios are not calculable. Accounts receivable of 40.20 suggest DSO around ~56–57 days ((40.20/129.36)×~182 days), acceptable for the model. Working capital printed as 72.87 equals current assets due to unreported current liabilities; thus true working capital cannot be determined. solvency: Total liabilities 142.22 vs equity 94.47 yields liabilities-to-equity of 1.51x. Equity ratio at 35.5% indicates a moderate cushion. Interest-bearing debt detail is unreported, so interest coverage cannot be assessed. capital_structure: Financing CF +14.34 alongside buybacks (-5.35) and dividends (-0.26) implies net inflows from borrowings or equity issuance to fund investing activities. Absent debt disclosures, we treat leverage as moderate, anchored by a mid-30s equity ratio.

Cash Flow Quality

earnings_quality: OCF of 18.92 vs net income of 12.61 (1.50x) indicates strong cash conversion, reducing concerns about accrual-driven earnings. Effective tax cash burden appears aligned with P&L (32%). FCF_analysis: FCF was -13.03 despite capex of only -1.20, driven by broader investing CF of -31.95 (likely M&A, software, or strategic investments). This suggests a growth/inorganic expansion phase rather than deterioration in core cash generation. working_capital: Accounts receivable at 40.20 relative to revenue imply DSO in the mid-50s days; payables data are limited (AP 2.29) and current liabilities are unreported, preventing full CCC analysis. No red flags on cash conversion given OCF/NI strength.

Dividend Sustainability

payout_ratio_assessment: Calculated payout ratio is 2.8%, indicating a conservative dividend stance with ample coverage from earnings. FCF_coverage: FCF coverage of dividends is negative (FCF -13.03), but this is due to discretionary growth investments; coverage from OCF is strong with dividends of only -0.26. Therefore, the current low dividend is not pressured by core cash generation. policy_outlook: With low payout and active buybacks (-5.35), capital returns appear opportunistic and secondary to growth. Continuation of a low, sustainable dividend alongside selective repurchases is likely, contingent on maintaining OCF strength and equity ratio around mid-30s%.

Risk Assessment

Business Risks:

• Advertising and client budget cyclicality affecting lead volumes and CPMs/CPCs
• Segment concentration in HR/finance media and performance marketing
• Regulatory changes in labor placement, personal finance, and data privacy
• Platform dependency (search/social algorithms) impacting traffic acquisition costs
• Execution risk in M&A and integration of acquired assets (given sizable investing CF)
• Competition from larger internet platforms and niche specialists

Financial Risks:

• Limited visibility on interest-bearing debt and current liabilities hampers liquidity assessment
• Potential leverage increase to fund investments could pressure equity ratio
• Working capital swings from receivables and advertiser settlement terms
• Impairment risk on intangibles/goodwill if acquisitions underperform (detail unreported)
• Refinancing/interest-rate risk if debt usage has increased (interest expense unreported)

Key Concerns:

• Operating margin compression despite strong revenue growth
• Negative FCF driven by heavy investing CF; need for clear returns on investment
• Data gaps on debt structure and current liabilities limiting solvency and liquidity analysis

Investment Implications

Key Takeaways:

• Strong topline growth (+30.4% YoY) with robust gross margin (52.7%)
• Operating margin moderated to ~14.4% as SG&A investments rose
• ROE at 13.3% supported by solid margins and moderate leverage (equity ratio 35.5%)
• Cash earnings quality is good (OCF/NI 1.50x)
• Negative FCF reflects strategic investment (-31.95 investing CF) rather than weak operations
• Capital returns are modest; low payout (2.8%) and active buybacks (-5.35)
• Balance sheet shows moderate leverage; detailed debt metrics unreported

Metrics to Watch:

• SG&A-to-sales ratio and operating margin trajectory
• Returns on invested capital for recent investments/M&A
• OCF/NI ratio and FCF normalization post-investment
• Equity ratio and liabilities-to-equity trend (signs of rising leverage)
• Accounts receivable and DSO trends
• EPS progression and share count movements post-buybacks

Relative Positioning: Within Japan’s digital media/performance marketing and HR/finance lead-generation peers, Port exhibits above-average gross margins and double-digit operating margins, coupled with mid-teens ROE. Growth is strong, but current period shows investment-led margin pressure; overall positioning is that of a scalable, asset-light platform with moderate leverage and active capital allocation.

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