| Metric | Current | Prior | YoY |
|---|---|---|---|
| Revenue | ¥153.9B | ¥132.9B | +15.8% |
| Operating Income | ¥33.0B | ¥24.4B | +35.2% |
| Ordinary Income | ¥32.9B | ¥24.8B | +32.4% |
| Net Income | ¥19.5B | ¥14.7B | +32.8% |
| ROE | 13.0% | 10.6% | - |
FY2025 Q3 results show strong performance with Revenue of 153.9B yen (YoY +15.8%), Operating Income of 33.0B yen (YoY +35.2%), Ordinary Income of 32.9B yen (YoY +32.4%), and Net Income of 19.5B yen (YoY +32.8%). The company achieved robust profit growth exceeding revenue growth, demonstrating operating leverage benefits. Gross profit margin stands at 45.4% with SG&A ratio at 24.0%, resulting in an operating margin of 21.5%. The company operates under a single brand "Anytime Fitness" exclusively in the domestic market. However, no full-year guidance is provided due to the planned delisting following MBO and tender offer procedures announced in December 2025 and January 2026.
Revenue increased 21.0B yen or 15.8% YoY to 153.9B yen, driven by expansion of the fitness club operation business under the single Anytime Fitness brand. The company operates exclusively in domestic fitness facility operations, with growth attributable to increased membership base and store network expansion. Cost of sales increased to 84.0B yen while maintaining a favorable gross profit margin of 45.4%, suggesting pricing power and operational efficiency. SG&A expenses rose to 36.9B yen but grew at a slower rate than revenue, improving the SG&A ratio to 24.0% of revenue and demonstrating operational leverage.
Operating income surged 8.6B yen or 35.2% YoY to 33.0B yen, significantly outpacing revenue growth due to margin expansion. Non-operating items showed net negative contribution of 0.1B yen, with non-operating income of 2.3B yen (including FX gains of 1.5B yen) largely offset by non-operating expenses of 2.5B yen (including commission fees of 2.0B yen). The gap between ordinary income (32.9B yen) and operating income (33.0B yen) of -0.1B yen is immaterial.
Extraordinary items had minimal net impact: extraordinary income of 0.9B yen (including negative goodwill of 0.2B yen from business acquisitions) minus extraordinary losses of 0.4B yen (impairment loss of 0.3B yen and asset disposal loss of 0.4B yen). Income tax expense of 13.8B yen represents an effective tax rate of approximately 41.4%, which is elevated and represents a drag on net profitability. Net income reached 19.5B yen, up 32.8% YoY.
This represents a revenue up/profit up pattern, with profit growth substantially exceeding revenue growth, indicating strong operational efficiency gains and positive operating leverage.
The company operates as a single segment business focused on fitness club operations under the Anytime Fitness brand in the domestic market. Segment-level breakdown is not applicable as all operations are consolidated under the fitness club operation segment.
[Profitability] ROE of 13.0% demonstrates solid return on equity, while operating margin of 21.5% significantly exceeds typical service industry standards, indicating strong pricing power and cost management. Net profit margin of 12.7% reflects high-quality earnings generation, though the effective tax rate of approximately 41.4% represents a headwind to bottom-line profitability. Gross profit margin of 45.4% indicates favorable unit economics. [Cash Quality] Cash and deposits of 79.2B yen cover short-term debt 11.3 times, providing substantial liquidity cushion. The company maintains minimal interest-bearing debt of 7.0B yen with interest coverage ratio of 94.4 times, demonstrating negligible financial burden. [Investment Efficiency] Total asset turnover of 0.667 indicates moderate asset utilization efficiency. The significant increases in goodwill to 12.0B yen (up 170.9% YoY) and intangible assets to 12.3B yen (up 163.1% YoY) reflect recent M&A activity requiring future performance monitoring for impairment risk. [Financial Health] Equity ratio of 65.2% indicates a conservative capital structure with strong financial stability. Current ratio of 183.0% and quick ratio of 176.9% both demonstrate robust short-term liquidity. Debt-to-equity ratio of 0.07 is minimal, reflecting low financial leverage. Retained earnings increased to 107.2B yen, strengthening the equity base.
Cash and deposits increased substantially to 79.2B yen, representing 34.3% of total assets and providing strong liquidity buffer. The minimal interest-bearing debt of 7.0B yen combined with bonds payable of 3.1B yen results in total debt of approximately 10.1B yen, covered 7.8 times by cash holdings. Working capital stood at 49.5B yen with trade receivables of 12.6B yen and inventories of 3.6B yen offset by trade payables of only 1.3B yen, indicating the company operates with limited supplier credit utilization. The increase in inventories by 2.0B yen or 125.5% YoY warrants monitoring for inventory turnover efficiency. Current liabilities of 59.6B yen are fully covered by current assets of 109.1B yen, demonstrating no liquidity stress. Contract liabilities of 19.5B yen represent advance customer payments, providing working capital benefits. Asset retirement obligations of 15.5B yen represent future cash outflows related to facility restoration, though spread over multiple years. The company's interest expense of 0.3B yen is negligible relative to operating profit, confirming minimal financial burden.
Ordinary income of 32.9B yen compared to operating income of 33.0B yen indicates net non-operating expense contribution of approximately 0.1B yen or 0.1% of revenue, demonstrating that earnings are primarily driven by core operations. Non-operating income of 2.3B yen includes FX gains of 1.5B yen and other income of 0.3B yen, while non-operating expenses of 2.5B yen consist primarily of commission fees of 2.0B yen related to M&A or financial transactions, plus interest expense of 0.3B yen and FX losses of 0.1B yen. The substantial commission fees appear non-recurring in nature, likely associated with corporate restructuring activities. Extraordinary items include negative goodwill of 0.2B yen (bargain purchase gain) offset by impairment loss of 0.3B yen and asset disposal loss of 0.4B yen, representing one-time adjustments. The high effective tax rate of 41.4% reduces earnings quality from a shareholder return perspective. The company's strong cash position of 79.2B yen relative to net income of 19.5B yen suggests healthy cash generation capability, though quarterly cash flow statements are not available for direct operating CF comparison. The minimal gap between diluted EPS of 102.80 yen and basic EPS of 104.18 yen indicates limited dilution risk from stock options or convertible securities.
No full-year guidance is provided for FY2025. As disclosed in the company announcements dated December 1, 2025 regarding MBO implementation and January 21, 2026 regarding tender offer results, the company's shares are scheduled for delisting, and therefore full-year consolidated earnings forecasts have been omitted. Based on Q3 cumulative results, if assuming standard quarterly progression (Q3=75% of full year), the implied progress rates would be: Revenue achievement rate not calculable without guidance; Operating Income achievement rate not calculable without guidance. The absence of formal guidance reflects the extraordinary corporate restructuring circumstances rather than operational uncertainty.
As announced on December 1, 2025, the company has revised its dividend forecast to zero for the fiscal year-end, discontinuing dividends in conjunction with the MBO and planned delisting. The Q2 interim dividend was 20 yen per share as previously planned. The originally contemplated year-end dividend of 25 yen per share (total annual 45 yen per share) has been cancelled. Based on the discontinued dividend policy, the theoretical payout ratio against net income would have been approximately 43.3% if the full 45 yen dividend had been paid, within sustainable range given cash reserves of 79.2B yen and retained earnings of 107.2B yen. However, the actual payout for the fiscal year will be limited to the Q2 interim dividend of 20 yen, representing approximately 19.2% payout ratio. The shareholder benefit program has also been discontinued as disclosed. No share buyback activity is disclosed for the period.
Single-brand domestic concentration risk: The company operates exclusively under the Anytime Fitness brand in Japan, creating vulnerability to domestic market saturation, competitive intensification, or brand-specific reputation issues. Any decline in membership trends or pricing pressure would directly impact consolidated results with no geographic or brand diversification buffer.
Intangible asset impairment risk: Goodwill increased 7.6B yen (170.9% YoY) to 12.0B yen and intangible assets increased 7.6B yen (163.1% YoY) to 12.3B yen, reflecting M&A investments totaling approximately 15.2B yen. If acquired businesses fail to generate expected returns or synergies, impairment charges could materially reduce profitability. The combined intangible assets represent 10.5% of total assets, requiring ongoing monitoring of recoverability.
Delisting and governance transition risk: The announced MBO and tender offer process leading to delisting will fundamentally alter shareholder composition, information disclosure standards, and share liquidity. Post-delisting capital allocation policies, dividend sustainability, and corporate governance oversight may diverge from public company standards, creating uncertainty for remaining minority shareholders if any. The elevated commission fees of 2.0B yen in Q3 likely reflect transaction costs associated with this restructuring.
[Industry Position] (Reference - Proprietary Analysis)
The company demonstrates profitability metrics substantially above industry medians. ROE of 13.0% exceeds the IT/Telecom industry median of 8.3% (IQR: 3.6%-13.1%), positioning in the upper quartile. Operating margin of 21.5% significantly surpasses the industry median of 8.2% (IQR: 3.6%-18.0%), ranking among top performers. Net profit margin of 12.7% equals the industry upper quartile threshold of 12.7% (median 6.0%), confirming superior profitability. Revenue growth of 15.8% YoY exceeds the industry median of 10.4% (IQR: -1.2%-19.6%), demonstrating above-average expansion momentum.
Financial health metrics indicate conservative positioning. Equity ratio of 65.2% exceeds the industry median of 59.2% (IQR: 42.5%-72.7%), reflecting lower financial leverage and stronger balance sheet stability. Current ratio of 183.0% is below the industry median of 215.0% (IQR: 157%-362%) but remains well above adequacy thresholds, indicating solid liquidity management with lower excess cash drag than peers. Asset turnover of 0.67 equals the industry median precisely (IQR: 0.49-0.93), suggesting typical capital intensity for the sector.
The company's financial leverage of 1.53 is substantially below the industry median of 1.66 (IQR: 1.36-2.32), confirming conservative debt utilization. Net debt/EBITDA is significantly negative (net cash position) compared to industry median of -2.84, placing the company among the most deleveraged in the sector. Return on assets of 8.7% (calculated from ROE and leverage) exceeds the industry median of 3.9% (IQR: 1.4%-7.0%), demonstrating superior asset productivity.
※ Industry: IT/Telecom (104 companies), Comparison: 2025-Q3 period, Source: Proprietary analysis
Strong operational performance with margin expansion: The company achieved revenue growth of 15.8% YoY while operating income surged 35.2%, demonstrating significant operating leverage as SG&A expenses grew slower than revenue. Operating margin of 21.5% substantially exceeds industry median of 8.2%, and net profit margin of 12.7% matches the industry upper quartile, confirming a high-quality business model with pricing power and cost efficiency. The gross profit margin of 45.4% indicates favorable unit economics in the fitness club operation model.
Fortress balance sheet with minimal leverage: Cash holdings of 79.2B yen represent 34.3% of total assets and cover short-term liabilities 1.3 times, providing substantial financial flexibility. Interest-bearing debt of only 7.0B yen results in negligible interest expense of 0.3B yen and interest coverage of 94.4 times. The equity ratio of 65.2% exceeds industry median of 59.2%, while the debt-to-equity ratio of 0.07 positions the company among the most conservatively capitalized in the sector. This financial strength enabled M&A investments evidenced by goodwill and intangible asset increases totaling 15.2B yen YoY.
Corporate restructuring creates uncertainty: The announced MBO and planned delisting fundamentally alter the investment proposition, with dividend forecast revised to zero for year-end and shareholder benefits discontinued. The Q3 commission fees of 2.0B yen likely reflect transaction costs associated with this restructuring. Post-delisting, transparency, liquidity, and capital allocation policies may diverge from public company standards. The effective tax rate of 41.4% represents a structural drag on net profitability, though private ownership may enable more flexible tax optimization strategies unavailable to public companies.
This report was automatically generated by AI analyzing XBRL earnings data as an earnings analysis tool. This is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled from publicly available earnings data. Please make investment decisions at your own responsibility and consult professionals as needed.