INTER ACTION Corporation FY2026 FY Earnings Report

クイックビュー

Executive Summary

FY2026 results: Revenue ¥48.2B (YoY -¥18.5B -27.7%), Operating Income ¥7.0B (YoY -¥7.2B -50.5%), Ordinary Income ¥8.3B (YoY -¥5.5B -39.7%), Net Income attributable to owners of the parent ¥4.9B (YoY -¥3.0B -37.7%), marking a significant decline in both revenue and profit. Adjustment in demand for semiconductor manufacturing equipment and a sharp fall in the core IoT Business (YoY -22.9%) pressured results. Operating margin declined to 14.6% (prior year 21.3%), a -6.7pt drop, while Gross Profit Margin improved to 50.3% (prior year 45.1%) +5.2pt, indicating effects from higher-value product mix and cost control. SG&A increased to ¥17.2B (YoY +¥1.4B), and the fixed-cost rigidity amplified negative operating leverage. ROE declined to 4.6% (prior year 8.6%) -4.0pt, driven by deterioration in total asset turnover (sales decline and accumulation of cash and deposits ¥85.3B) and compression of operating margin. Cash generation remained solid with Operating Cash Flow (OCF) ¥13.4B and Free Cash Flow ¥10.1B, 2.1x Net Income. Equity Ratio 89.5% and Net Cash ¥80.3B indicate an extremely strong financial base; concurrently the company executed ¥11.9B share buybacks and ¥4.7B dividends for total returns of ¥16.6B.

業績変動要因

【売上高】Revenue was ¥48.2B (YoY -27.7%), a large decline. Segment composition: IoT Business ¥29.5B (prior ¥38.3B, -22.9%) accounts for 61.2% of total; Industry 4.0 Promotion Business ¥18.6B (prior ¥20.6B, -9.7%) accounts for 38.6%; Others ¥0.1B (prior ¥0.8B, -98.8%) accounts for 0.2%. The core IoT Business saw a steep decline due to demand adjustment for image sensor inspection light source equipment, and Industry 4.0 Promotion also declined due to fewer orders for precision vibration isolation devices and gear test machines. The sale of shares of consolidated subsidiary Air Gases Technos Co., Ltd. in the prior year effectively eliminated the Environmental Energy Business, also contributing to the revenue decline. Gross Profit Margin improved to 50.3% from 45.1% the prior year (+5.2pt), confirming the effects of higher value-added product mix and cost reduction.

【損益】Cost of sales was ¥24.0B, yielding Gross Profit ¥24.3B and Gross Profit Margin 50.3%. SG&A was ¥17.2B (prior ¥15.9B, +8.6%), raising SG&A ratio to 35.7% (prior 23.8%) +11.9pt. Major components include salaries and allowances ¥4.1B and other SG&A ¥6.5B; labor and head office administrative costs, which are largely fixed, depressed margins amid declining sales. R&D expenses were ¥1.9B (4.0% of sales), down substantially from ¥5.9B the prior year. Operating Income was ¥7.0B (prior ¥14.2B, -50.5%), and operating margin contracted to 14.6% (prior 21.3%) -6.7pt. Non-operating income was ¥1.6B, mainly interest income ¥0.4B and foreign exchange gains ¥1.1B. Non-operating expenses were ¥0.2B (including interest expense ¥0.1B and foreign exchange losses ¥0.7B); the net FX impact was minor at around +¥0.3B. Ordinary Income was ¥8.3B (prior ¥13.9B, -39.7%). Extraordinary losses of ¥0.8B (e.g., impairment/retirement of fixed assets) were recorded, resulting in Profit Before Tax ¥7.5B; after income taxes ¥2.2B (effective tax rate 29.6%), Net Income attributable to owners of the parent was ¥4.9B (prior ¥7.9B, -37.7%). In conclusion, results were down year-over-year.

セグメント別分析

IoT Business: Revenue ¥29.5B (YoY -22.9%), Operating Income ¥13.5B (YoY -30.9%), margin 45.6%, maintaining high profitability. Demand adjustment for image sensor inspection light source equipment impacted revenue, but high value-added products sustained elevated margins. Industry 4.0 Promotion Business: Revenue ¥18.6B (YoY -9.7%), Operating Income ¥1.0B (YoY -61.3%), margin 5.5%, showing substantial deterioration in profitability. Reduced orders for Meiritsu Seiki’s precision vibration isolation devices and Tokyo Technical’s gear test machines increased fixed-cost burden and compressed margins. Others (Environmental Energy Business): Revenue ¥0.1B, Operating Income ¥0.1B, business scale contracted. Corporate expenses totaled ¥7.5B (head office administrative costs ¥6.9B, inventory adjustments ¥0.6B); after adjustment, consolidated Operating Income was ¥7.0B. Margin disparity across segments is pronounced, with the IoT Business generating the bulk of consolidated profit.

主要財務指標

【収益性】Operating margin 14.6% (prior 21.3%), Gross Profit Margin 50.3% (prior 45.1%), ROE 4.6% (prior 8.6%). Although gross margin improved, rising SG&A ratio (35.7%, prior 23.8%) significantly reduced operating margin. The ROE decline stems from worsened total asset turnover (0.40x, prior 0.49x) and contraction of operating margin; financial leverage is low and stable at 1.12x. 【キャッシュ品質】OCF ¥13.4B, 2.7x Net Income, and OCF/Sales ratio 27.8%, a high level. Free Cash Flow ¥10.1B, 2.1x Net Income, indicating very strong cash generation. Accrual ratio is -17.1%, negative, implying strong cash conversion of profits. 【投資効率】Capital expenditures ¥1.9B are at similar level to depreciation ¥2.0B, indicating maintenance investment. R&D ¥1.9B (4.0% of sales) remains at an appropriate level. 【財務健全性】Equity Ratio 89.5% (prior 86.2%), current ratio 977% (prior 813%), quick ratio 966%, indicating very high liquidity. Interest-bearing debt totaled ¥5.0B (short-term borrowings ¥3.9B and long-term borrowings ¥1.1B) versus cash and deposits ¥85.3B, yielding Net Cash ¥80.3B. Debt-to-equity 0.12x, Debt/EBITDA 0.55x, Interest Coverage 94x (EBITDA / interest expense) indicate ample financial capacity.

キャッシュフロー分析

OCF was ¥13.4B (prior ¥35.6B, -62.4%). Profit before tax ¥7.5B (pre-tax profit) plus depreciation ¥2.0B, goodwill amortization ¥0.3B, etc., gave a subtotal of ¥15.9B. Changes in working capital provided funds: decrease in trade receivables ¥5.7B and decrease in inventories ¥2.0B supported OCF as working capital was released amid demand slowdown. After income tax payments ¥2.9B, OCF was ¥13.4B. Investing CF was -¥3.2B, comprising capex -¥1.9B, intangible asset investment -¥0.5B, and payments related to sale of subsidiary shares -¥1.0B. Free Cash Flow was ¥10.1B (OCF ¥13.4B - Investing CF ¥3.2B). Financing CF was -¥17.1B, mainly dividend payments -¥4.7B, share buybacks -¥11.9B, and long-term borrowings repayment -¥0.5B. Considering FX effects +¥1.4B, cash and deposits decreased from ¥90.7B to ¥85.3B, a decline of ¥5.5B. The working capital inflow was transitory (receivables and inventory decreases); in a recovery scenario next fiscal year, reinvestment in working capital is expected.

収益の質

Recurring earnings are centered on Operating Income ¥7.0B, with Non-operating income ¥1.6B (3.3% of sales) mainly from interest income ¥0.4B and FX gains ¥1.1B. FX losses of ¥0.7B were also recorded, so net FX impact is about +¥0.3B, roughly 4% of Operating Income, but distortion to earnings structure is limited. Extraordinary losses ¥0.8B (e.g., fixed asset retirement losses) account for about 16% of Net Income, indicating a moderate one-off impact. OCF ¥13.4B is 2.7x Net Income ¥4.9B; OCF/EBITDA is 1.49x (EBITDA = Operating Income ¥7.0B + depreciation ¥2.0B = ¥9.0B), demonstrating excellent cash conversion. Accrual ratio -17.1% indicates cash-driven earnings. The gap between Ordinary Income ¥8.3B and Net Income ¥4.9B is mainly due to income taxes ¥2.2B (effective tax rate 29.6%) and extraordinary losses ¥0.8B, with tax burden and one-off losses compressing final profit.

業績予想・ガイダンス

FY2027 Full Year plan: Revenue ¥72.1B (YoY +49.6%), Operating Income ¥16.0B (YoY +127.7%), Ordinary Income ¥16.2B (YoY +94.0%), Net Income attributable to owners of the parent ¥10.5B, EPS ¥103.41, Dividend ¥45 (including special dividend ¥10). Operating margin is expected to improve to 22.2% (+7.6pt from current 14.6%). Assumptions include recovery in semiconductor manufacturing equipment demand, restoration of high profitability in the core IoT Business, and improved profitability in the Industry 4.0 Promotion Business. H2 of the current fiscal year slowed with Revenue ¥23.4B (H1 ¥24.8B), so the sizable acceleration in next fiscal year presumes a sharp demand rebound. Because working capital was substantially released this fiscal year, OCF may underperform in the next fiscal year as receivables and inventories are redeployed in the revenue recovery. Achievement of the plan hinges on the certainty of demand recovery and normalization of working capital.

株主還元

This fiscal year dividends were annual ¥44 (interim ¥10, year-end ¥34), total dividends approximately ¥4.7B. Payout ratio is high at about 96% against Net Income ¥4.9B. Share buybacks amounted to ¥11.9B, bringing total shareholder returns to ¥16.6B. Total Return Ratio versus Free Cash Flow is 164%, substantially exceeding FCF. Dividends alone would be coverable by FCF, but including share buybacks the company reduced cash on hand. Backed by ample cash deposits ¥85.3B, the company implemented aggressive shareholder returns; going forward, balancing growth investments and shareholder returns given the need for recovery and increases in working capital will be a focus. Next fiscal year dividend forecast is ¥45 (including special dividend ¥10), premised on recovery in earnings.

リスク要因

1. Semiconductor investment cycle risk: The core IoT Business (61.2% of sales) is concentrated in image sensor inspection light source equipment; during adjustments in semiconductor manufacturing investment the company can experience steep revenue declines. This fiscal year saw a -22.9% YoY drop and Operating Income decreased -30.9%. Future volatility in the semiconductor investment cycle could lead to significant swings in operating performance.

2. Low profitability risk in Industry 4.0 Promotion Business: Operating margin for this business fell substantially to 5.5% (prior 12.9%), indicating pronounced profitability deterioration. Heavy fixed-cost burden makes margins highly vulnerable in revenue downturns, a structural issue. The next fiscal year plan assumes profitability improvement, but execution risk is high.

3. Working capital and inventory management risk: Inventories ¥11.2B (work-in-process ¥6.2B, raw materials ¥5.7B), with WIP ratio high at 55.4%. Inventory turnover has tended to lengthen (temporarily improved this fiscal year due to working capital release); if demand recovery is delayed, obsolescence and valuation loss risk could materialize. Next fiscal year revenue growth will require reinvestment in working capital, which could pressure cash flow.

業種ベンチマーク（参考・当社調べ）

収益性・リターン

Profitability materially exceeds industry medians, confirming advantages in high value-added products and cost management.

成長性・資本効率

Growth materially lags industry medians, with revenue declines driven by headwinds from the semiconductor investment cycle.

※Source: Company compilation

決算上の注目ポイント

1. Coexistence of profitability and financial soundness: Operating margin 14.6% exceeds the industry median 7.8% by +6.8pt, confirming high value-added products. Equity Ratio 89.5% and Net Cash ¥80.3B indicate an extremely robust financial base and ample financial capacity even amid earnings volatility. However, ROE 4.6% is low and capital efficiency is weak; improving total asset turnover (via revenue recovery and effective use of cash) is a key issue.

2. Ability to transition to a demand recovery phase: This fiscal year experienced steep revenue decline due to adjustments in semiconductor manufacturing equipment demand, but next fiscal year plan projects Revenue +49.6% and Operating Income +127.7%, implying large recovery. Gross Margin remains high at 50.3%, so positive operating leverage could act strongly in a recovery. Nevertheless, SG&A has a high fixed-cost component, and delayed demand recovery could prolong low profitability. As working capital was substantially released this fiscal year, reinvestment in receivables and inventories during next fiscal year’s revenue growth could constrain OCF.

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This report is an AI-generated earnings analysis based on XBRL financial statement data. It is not a recommendation to invest in any particular security. Industry benchmarks are reference data compiled by the company from public financial statements. Investment decisions are your responsibility; please consult professionals as needed before making investment decisions.