| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥715.3B | ¥695.4B | +2.9% |
| Operating Income / Operating Profit | ¥107.5B | ¥102.0B | +5.3% |
| Ordinary Income | ¥114.2B | ¥109.2B | +4.6% |
| Net Income / Net Profit | ¥195.2B | ¥72.1B | +170.9% |
| ROE | 38.0% | 12.1% | - |
For the fiscal year ended March 2026, the Company achieved Revenue of ¥715.3B (YoY +¥19.8B +2.9%), Operating Income of ¥107.5B (YoY +¥5.5B +5.3%), Ordinary Income of ¥114.2B (YoY +¥5.0B +4.6%), and Net Income attributable to owners of parent of ¥195.2B (YoY +¥123.1B +170.9%), registering growth in both top- and bottom-lines. At the operating level, steady growth in the core PLM Business and improvement in gross margin expanded the operating margin to 15.0% (+30bp). Ordinary income progressed favorably supported by stable financial income. The sharp increase in net income was primarily driven by a one-off gain on sale of investment securities of ¥160.3B recorded as an extraordinary gain, representing a non-recurring uplift.
[Revenue] Revenue totaled ¥715.3B (+2.9%), achieving growth. By segment, the PLM Business accounted for ¥694.9B (+2.9%), representing 97.1% of total, led by CAD systems for automotive and electronics and server sales. The EDA Business declined slightly to ¥20.4B (-1.0%) but maintained its foundation in the semiconductor industry. Gross profit margin improved to 26.3% (+30bp YoY), aided by better pricing terms and growth in support revenues.
[Profitability] Operating Income was ¥107.5B (+5.3%), with operating margin expanding 30bp to 15.0%. SG&A was ¥80.4B (11.2% of Revenue), controlled below revenue growth, yielding operating leverage. Ordinary Income was ¥114.2B (+4.6%), with non-operating income of ¥7.5B (dividends received ¥5.0B, interest income ¥1.5B) contributing stably. Profit before tax surged to ¥274.4B (YoY +151.3%), mainly due to the extraordinary gain of ¥160.3B (gain on sale of investment securities). After deducting corporate taxes of ¥80.9B (effective tax rate 29.5%), Net Income attributable to owners of parent was ¥195.2B (+170.9%). In conclusion, operating growth and profit are solid, but the surge in net income relies on a one-off extraordinary gain, so sustainable earnings power should be assessed at the operating level.
The PLM Business recorded Revenue of ¥694.9B (+2.9%), Operating Income of ¥104.8B (+5.5%), and margin of 15.1%, maintaining high profitability as the core segment. Ongoing projects and renewals of CAD systems for automotive and electronics and server sales remained solid, and gross margin improvements aided profit growth. The EDA Business saw Revenue of ¥20.4B (-1.0%) but secured higher Operating Income of ¥2.6B (+1.4%), showing resilience with a margin of 12.8%. Although sensitive to the semiconductor industry investment cycle, support revenue accumulation sustains profitability. The structure in which PLM accounts for 97.1% of Revenue and is the main source of Operating Income remains unchanged, indicating a high degree of business concentration.
[Profitability] Operating margin improved to 15.0% (+30bp YoY); gross margin expanded to 26.3%, supported by pricing improvements and higher support revenue. ROE rose sharply to 38.0% from 13.9% a year earlier, but this is primarily driven by the one-off gain on sale of investment securities and is therefore not indicative of a fundamental improvement in capital efficiency. Improvements in operating-level margins are more sustainable.
[Cash Quality] Operating Cash Flow was ¥46.6B, or 0.24x relative to Net Income of ¥195.2B, a low level driven by an increase in trade receivables of ¥27.8B and the one-off extraordinary gain. OCF/EBITDA ratio was 0.43x, and the accrual ratio was 17.9%, both relatively high, suggesting mismatches in period-end recognition and collection timing.
[Investment Efficiency] Total asset turnover was 0.88x, broadly flat YoY, so no material improvement in asset efficiency is evident. However, tangible fixed assets expanded to ¥56.7B (YoY +418%) following a large capital expenditure of ¥40.5B, aiming to strengthen future delivery capacity.
[Financial Soundness] Equity Ratio was 63.5%, Current Ratio 233.9%, and Quick Ratio 225.0%, indicating very sound liquidity; cash and deposits of ¥325.5B exceed current liabilities of ¥257.2B. Debt-to-equity (Debt/Equity) was 0.58x, a conservative level, implying very low short-term liquidity and financial constraint risks.
Operating Cash Flow was ¥46.6B (YoY -27.8%), and the ratio to Net Income was 0.24x. The main causes were working capital deterioration due to an increase in trade receivables of ¥27.8B and a one-off uplift in net income from extraordinary gains. OCF/EBITDA at 0.43x is below the 0.8 threshold, and the accrual ratio at 17.9% is relatively high, indicating weak cash conversion. Investing Cash Flow was positive ¥129.5B, mainly due to inflows of ¥173.7B from sale of investment securities, while capital expenditure of ¥40.5B represented a large investment (YoY +481%), about 30 times depreciation of ¥1.3B. Financing Cash Flow was -¥214.5B, with major outflows from share repurchases of ¥190.5B and dividends of ¥27.1B, causing total shareholder returns to exceed period FCF. Free Cash Flow was positive ¥176.1B, but driven mainly by the one-time proceeds from securities sales; normalization of working capital and monetization of capex are required to assess sustainable generation capacity. Cash and cash equivalents were ¥322.1B (YoY -¥36.9B), but liquidity remains ample.
This period, an extraordinary gain of ¥160.3B (gain on sale of investment securities) substantially boosted Net Income; however, operating-level profitability showed improvement with Operating Margin of 15.0% and Gross Margin of 26.3%. Non-operating income of ¥7.5B represented 1.1% of Revenue, below a 5% threshold, and mainly comprised dividends received ¥5.0B and interest received ¥1.5B, indicating stable financial-asset-derived income with an ordinary nature. The gap between Ordinary Income of ¥114.2B and Net Income of ¥195.2B is large (+70.8%), primarily due to the extraordinary gain. Extraordinary losses were minor at ¥0.2B, so continued operations’ profitability is not distorted. Accrual quality metrics—Operating CF/Net Income 0.24x, OCF/EBITDA 0.43x, and accrual ratio 17.9%—warrant cautious assessment; the primary drivers are increased trade receivables and temporary working capital timing mismatch. Comprehensive income was ¥131.0B, below Net Income, driven by a decline in valuation difference on available-for-sale securities of -¥64.4B; disposal of investment securities reduced reliance on unrealized assets. On a pro-forma basis (excluding extraordinary gains and applying effective tax rate 29.5%), Net Income is estimated to be approximately ¥80B, broadly in line with the prior year.
Company guidance for the fiscal year ending March 2027 projects Revenue of ¥726.0B (+1.5%), Operating Income of ¥103.0B (-4.1%), Ordinary Income of ¥106.0B (-7.2%), and Net Income attributable to owners of parent of ¥71.8B (-63.2%). The Company expects modest revenue growth but a conservative profit outlook. The forecasted decline in operating income reflects higher depreciation expense associated with large capital expenditure and a waiting period for investment payback; the sharp expected drop in Net Income incorporates the normalization effect from the absence of this period’s ¥160.3B extraordinary gain. Progress toward annual targets stands at Revenue 98.5%, Operating Income 104.4%, Ordinary Income 107.7%, Net Income 271.8% (including the one-off gain), indicating generally favorable progress against the full-year plan. Dividend guidance is ¥32 per share (including ¥20 special dividend), suggesting a normalization of shareholder returns based on normalized earnings.
Annual dividend is ¥140 per share (interim ¥80, year-end ¥60, including a year-end special dividend of ¥40), with a payout ratio of 31.5%, within sustainable range. However, current period Net Income is inflated by a one-off extraordinary gain, so payout ratio on a pro-forma basis may be somewhat elevated. Share repurchases of ¥190.5B (approximately 26% on a period-average share count basis) were executed, expanding treasury stock valuation to -¥102.9B. Combined dividends of ¥27.1B and share buybacks imply a Total Return Ratio effectively exceeding 100%, with this period prioritizing capital efficiency improvements funded by proceeds from the sale of investment securities. Dividend coverage relative to Free Cash Flow of ¥176.1B is 1.57x, indicating headroom, but FCF includes one-time proceeds from securities sales; normalization of Operating CF is a prerequisite for assessing sustainable dividend capacity. Next year’s dividend guidance of ¥32 (including ¥20 special dividend) reflects a balanced level given normalized earnings and increased investment burden.
Business concentration risk: PLM accounts for 97.1% of Revenue, creating high dependence on capital investment cycles in the automotive and electronics sectors. Macro volatility or technological shifts in customer industries could directly impact Revenue and Profitability.
Cash conversion vulnerability: Operating CF/Net Income 0.24x, OCF/EBITDA 0.43x, and accrual ratio 17.9% indicate weak cash realization. The primary driver is a ¥27.8B increase in trade receivables and timing mismatches in revenue recognition; failure to improve working capital management could impair investment capacity and sustainability of shareholder returns.
Investment recovery uncertainty: Tangible fixed assets surged to ¥56.7B (YoY +418%), and capex of ¥40.5B is about 30x depreciation of ¥1.3B. While intended to enhance future delivery capacity, delays in ramp-up or shortfalls in demand could materialize as higher depreciation burden and reduced profitability.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 15.0% | 8.1% (3.6%–16.0%) | +6.9pt |
| Net Margin | 27.3% | 5.8% (1.2%–11.6%) | +21.5pt |
Profitability significantly exceeds the industry median: Operating Margin is +6.9pt and Net Margin is +21.5pt. However, Net Margin includes a one-off extraordinary gain, so comparing at the operating level is more appropriate for assessing sustainability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 2.9% | 10.1% (1.7%–20.2%) | -7.2pt |
Revenue growth lags the industry median by -7.2pt, indicating a relatively slower growth pace. This reflects stability in the core PLM Business but also highlights room for new business development and market expansion.
※Source: Company aggregation
Stable core growth and margin improvement: Operating Margin 15.0% and Gross Margin 26.3% indicate solid underlying earnings power, supported by high-margin PLM operations and controlled SG&A enabling operating leverage. The next fiscal year projects a temporary decline in profit due to higher depreciation, but mid-term margin improvement is expected as investment payback progresses.
Room to improve cash generation and working capital management: Operating CF/Net Income at 0.24x signals weak cash conversion, driven by increased trade receivables. If recognition timing is smoothed and working capital normalized, cash generation and FCF sustainability could improve from next fiscal year onward. Attention should focus on funding timing aligned with the revenue contribution from large capex.
Normalization of capital policy and sustainable returns: This period’s Total Return exceeding FCF was driven by proceeds from investment securities sales and share repurchases of ¥190.5B; next year expects dividend normalization at ¥32. Going forward, with Operating CF improvement and stable FCF generation, the Company is likely to continue a capital efficiency-focused policy combining baseline dividend increases and opportunistic buybacks.
This report is an AI-generated financial analysis document produced by analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmark data are reference information compiled by the Company based on public financial statements. Investment decisions are your own responsibility; consult a professional advisor as necessary.