ヤガミ (7488) FY2026 Q3 Earnings Report

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Executive Summary

All four key indicators—Revenue, Operating Income, Ordinary Income, and Net Income—recorded double-digit increases, resulting in higher revenue and profit, with a clear improvement in profitability. Revenue was ¥83.5B (+7.6% YoY), Operating Income was ¥16.7B (+24.3%), Ordinary Income was ¥17.2B (+24.4%), and Net Income was ¥11.7B (+25.3%). While all three segments posted revenue growth, Operating Income expanded at a faster pace than revenue, particularly due to the strong growth of Health and Medical Equipment (+14.0%) and the sustained high gross margin (43.9%).

Factors Affecting Financial Performance

【Revenue】Revenue increased 7.6% YoY to ¥83.5B. All three segments secured revenue growth, exceeding the previous year’s results: Scientific Instruments and Equipment (52.4% of total, +6.4%), Health and Medical Equipment (+14.0%), and Industrial Equipment (+4.0%). In particular, “Other Income” related to leasing in the Health and Medical Equipment segment increased to ¥554.7M (¥300.7M in the previous year), supporting growth.

【Profit and Loss】Operating Income increased 24.3% to ¥16.7B, while Ordinary Income increased 24.4% to ¥17.2B, with profit growth substantially exceeding the rate of revenue growth. As the increase in cost of sales was below the rate of revenue growth, the gross margin improved to 43.9% (41.6% in the previous year), while the SG&A ratio was contained at 22.9%, indicating operating leverage. Extraordinary gains and losses were limited to a ¥0.2B loss on disposal of fixed assets, and the difference between Ordinary Income and Net Income was primarily attributable to income taxes, etc. (an effective tax rate of approximately 31.6%). The Company delivered higher revenue and profit.

Segment Analysis

Scientific Instruments and Equipment, the largest segment, recorded revenue of ¥43.8B (+6.4%) and Ordinary Income of ¥9.1B (+26.2%, margin of 20.7%), with accelerated profit growth. Health and Medical Equipment posted revenue of ¥20.2B (+14.0%) and Ordinary Income of ¥3.9B (+35.6%, margin of 19.2%), representing the highest growth rate among the three segments, supported by the expansion of leasing-related revenue. Industrial Equipment recorded revenue of ¥19.5B (+4.0%) and Ordinary Income of ¥4.2B (+12.5%, margin of 21.6%), maintaining the highest profit margin. By region, Japan accounts for the majority of revenue, while Asia and other regions combined account for only approximately 18% of total revenue, indicating a relatively high dependence on domestic demand.

Key Financial Indicators

【Profitability】The Operating Income margin was 20.0%, the gross margin was 43.9%, and the Net Income margin was 14.1%, all at high levels, with profit growth exceeding revenue growth. 【Cash Flow Quality】Although Operating Cash Flow (OCF) and Free Cash Flow (FCF) have not been disclosed, working capital fluctuations were significant, with inventories increasing 37.1% YoY and accounts payable increasing 71.4% YoY; the turnover efficiency of accounts receivable and inventories appears to be declining. 【Investment Efficiency】ROE (annualized) was 11.6%; although total asset turnover was relatively low, the high profit margin contributed positively. Intangible fixed assets increased substantially from ¥0.21B to ¥1.21B, indicating a change in investment trends. 【Financial Soundness】The Equity Ratio was 76.2%, and cash and deposits were ¥76.7B, maintaining a conservative capital structure against total liabilities of ¥42.1B.

Cash Flow Analysis

As the statement of cash flows has not been disclosed, cash flow trends are analyzed based on balance sheet changes. Cash and deposits were ¥76.7B, down from ¥83.4B in the previous year, while inventories increased 37.1% from ¥11.5B to ¥15.8B, suggesting that some funds may have been tied up in inventory. Meanwhile, accounts payable increased substantially by 71.4%, from ¥4.0B to ¥6.9B, indicating that changes in payment terms and increased procurement associated with inventory buildup may have partially mitigated cash outflows. The current ratio was 440.0% and the quick ratio was also extremely high at 389.5%, with no concerns regarding short-term liquidity. However, the declining turnover efficiency of inventories and accounts receivable requires monitoring as a factor that could affect future cash generation capacity.

Earnings Quality

The increase in Ordinary Income (+24.4%) substantially exceeded revenue growth (+7.6%), and both non-operating income and expenses were immaterial (non-operating income of ¥0.5B and non-operating expenses of ¥0.0B). Accordingly, the primary source of profit growth was the expansion of Operating Income from the core business. Extraordinary gains and losses consisted solely of a ¥0.2B loss on disposal of fixed assets, limiting the impact of temporary factors, while the difference between Ordinary Income and Net Income is almost entirely explained by income taxes, etc. (¥0.5B, effective tax rate of approximately 31.6%). Comprehensive Income was ¥12.0B, close to Net Income of ¥11.7B; even including the ¥0.3B contribution from valuation differences on securities, the divergence between the two was small, indicating good earnings quality. On the other hand, the significant changes in inventories and accounts payable suggest an expansion in accruals—the difference between accounting profit and cash flow—and therefore the pace of cash conversion requires attention.

Earnings Forecast and Guidance

The full-year earnings forecast is Revenue of ¥110.4B (+1.5% YoY), Operating Income of ¥21.3B (+9.7%), and Ordinary Income of ¥21.8B (+9.6%), with no revisions to either the earnings forecast or the dividend forecast. For the nine months ended Q3, Revenue reached 75.6% of the full-year forecast and Operating Income reached 78.2%. Since the cumulative quarterly profit growth rate (+24.3%) exceeds the full-year forecast growth rate (+9.7%), progress is generally on track. The full-year forecast can be interpreted as assuming slower growth in Q4 than in the previous year, and the likelihood of achieving the full-year targets is considered high.

Shareholder Returns

The Q2 dividend of ¥146.00 per share has already been paid, and the full-year dividend forecast is ¥284.00 (above the previous year’s full-year dividend actually paid). Based on the full-year Net Income forecast of ¥14.87B and the number of shares outstanding excluding treasury shares (approximately 5.245M shares), the Payout Ratio calculated is at a relatively high level; this assessment covers the Payout Ratio based solely on dividends. No share repurchase has been disclosed, and the Total Return Ratio has not been calculated. Given the conservative financial foundation of cash and deposits of ¥76.7B and an Equity Ratio of 76.2%, concerns regarding near-term dividend sustainability are limited. However, if the upward trend in working capital (inventories and accounts receivable) continues, monitoring consistency with cash flow would be advisable.

Risk Factors

1. Declining working capital efficiency: Inventories increased 37.1% YoY (from ¥11.5B to ¥15.8B), while accounts payable also expanded 71.4% (from ¥4.0B to ¥6.9B). Inventory buildup substantially exceeding revenue growth (+7.6%) suggests a delay in cash conversion and the potential risk of future inventory valuation losses.

2. Segment concentration risk: The Scientific Instruments and Equipment segment accounts for 52.4% of revenue, resulting in a structure where supply-and-demand trends in this area have a relatively significant impact on overall performance.

3. Geographic concentration risk: The majority of revenue is generated domestically, while Asia and other regions combined account for approximately 18% of total revenue. The Company has a relatively high dependence on domestic market conditions.

Industry Benchmarks (For Reference; Compiled by the Company)

Industry Benchmarks (general)

Profitability and Returns

Both the Operating Income margin and Net Income margin substantially exceed the industry median, placing profitability at a high level within the industry.

Growth and Capital Efficiency

The Revenue growth rate also slightly exceeds the industry median, indicating a relatively favorable growth pace within the industry.

※Source: Compiled by the Company

Key Takeaways from the Financial Results

1. All three segments posted revenue growth, and operating leverage was observed, with the profit growth rate exceeding the revenue growth rate while maintaining high profitability, including a 20.0% Operating Income margin and a 43.9% gross margin.

2. Working capital fluctuations were significant, with inventories increasing 37.1% YoY and accounts payable increasing 71.4%; changes in the turnover efficiency of inventories and accounts receivable may affect future cash flow trends.

3. Progress against the full-year earnings forecast for the nine months ended Q3 was 75.6% for Revenue and 78.2% for Operating Income. With no revisions to the earnings or dividend forecasts, progress was generally solid.

Theoretical Share Price (Reference Value)

Sensitivity: ¥2,572–¥2,706 at cost of equity ±1%; ¥2,637–¥2,639 at ω±0.1.

Notes:

• Net assets as of the end of the quarter are used (there is a timing difference versus the full-year forecast).
• As net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual Income Model (Ohlson-type, explicit 5-year fade) / Interest Rate Reference Month: 2026-07 / Mechanically calculated value based solely on publicly available data; it is not a forecast of the market share price or a recommendation of any specific investment action, and does not forecast or guarantee the future share price.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, consulting a professional as necessary.

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