| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥328.2B | ¥310.0B | +5.9% |
| Operating Income / Operating Profit | ¥29.1B | ¥2.1B | -91.4% |
| Pre-tax Profit | ¥30.1B | ¥16.8B | +79.1% |
| Net Income | ¥21.6B | ¥4.6B | +372.9% |
| ROE | 8.9% | 1.8% | - |
For the fiscal year ended March 2026, revenue was ¥328.2B (vs. prior year +¥18.3B, +5.9%), operating income was ¥29.1B (vs. prior year +¥27.0B, +1,290.8%), Ordinary Income was ¥19.0B (vs. prior year -¥3.4B, -15.1%), and net income attributable to owners of the parent was ¥21.1B (vs. prior year +¥16.6B, +367.5%). The rebound from the prior year's large impairment and other expenses drove a significant improvement in operating-stage profitability, resulting in final profit growing more than fourfold. Revenue continued a three-year streak of growth, and operating margin normalized to 8.9% (prior year 0.7%). Solid disclosure-related demand and normalization of expenses led the profit recovery, while M&A investments (goodwill +¥18.9B) and intangible investments (¥17.9B) signal a push to accelerate growth. Operating Cash Flow (OCF) was ¥35.3B, 1.6x net income, indicating high earnings quality, but Investing CF was -¥37.2B leaving Free Cash Flow (FCF) at -¥1.9B. Total shareholder returns amounted to ¥21.7B (dividends ¥11.7B + share buybacks ¥10.0B), yielding a Total Return Ratio of 103%, exceeding net income. Equity ratio was 63.0% and the company is effectively debt-free (interest-bearing debt ¥0.8B), so the balance sheet is robust, but management of a high short-term liability ratio (71%) and lease liabilities of ¥23.1B is important.
[Revenue] Revenue grew steadily to ¥328.2B (+5.9% YoY). By product, disclosure-related services for listed companies were ¥140.7B (prior year ¥124.5B, +13.0%) and led growth with double-digit increases; listed-company IR & events related were also robust at ¥109.2B (prior year ¥106.6B, +2.4%). Financial-product disclosure-related revenue was ¥67.3B (prior year ¥68.5B, -1.7%), and database-related revenue was ¥11.0B (prior year ¥10.4B, +5.5%). As a single segment (Disclosure-related Business), disclosure needs from domestic listed companies supported steady demand for IPO-related and IR support services. External tailwinds included active capital markets and increased complexity of disclosure regulations, producing favorable order conditions. Contract liabilities (advance receipts) were ¥7.8B (prior year ¥7.6B), essentially flat, indicating a stable short-term order backlog.
[Profitability] Cost of sales was ¥205.3B (prior year ¥198.1B, +3.6%), improving gross margin to 37.4% (prior year 36.1%) up 1.3pt. SG&A was ¥93.6B (prior year ¥85.4B, +9.6%), raising the SG&A ratio to 28.5% (prior year 27.6%) up 0.9pt, driven by higher personnel and development costs and M&A integration expenses. Operating income was ¥29.1B (prior year ¥2.1B), taking operating margin to 8.9% (prior year 0.7%) with a dramatic improvement. This improvement mainly reflects that prior-year “other expenses” of ¥25.4B (including impairments of ¥25.2B) dropped sharply to ¥1.3B this period (-95.0%), so normalization of expenses was the biggest factor. Net finance income was ¥1.3B (prior year ¥0.8B) less finance costs ¥0.3B (prior year ¥0.1B), producing Ordinary Income of ¥19.0B (prior year ¥22.4B, -15.1%). The decline at the ordinary-income level reflects the absence this year of prior-year equity-method investment disposal gains of ¥14.1B. Pre-tax Profit was ¥30.1B (prior year ¥16.8B, +79.1%); after corporate taxes of ¥8.5B (effective tax rate 28.2%), net income was ¥21.6B (prior year ¥4.6B, +372.9%). Net income attributable to owners of the parent was ¥21.1B (prior year ¥4.5B, +367.5%), improving net margin to 6.4% (prior year 1.5%) up 4.9pt. Special items were limited (impairment this period ¥0.6B only), indicating a return to earnings on an ordinary basis. In conclusion, the company achieved both revenue and profit growth, with the elimination of one-off expenses normalizing margins.
[Profitability] ROE was 8.7%, up 6.9pt from 1.8% last year, materially exceeding the company’s historical performance. DuPont decomposition (net margin 6.4% × total asset turnover 0.88x × financial leverage 1.54x) shows that net margin improvement was the main driver. Operating margin of 8.9% improved 8.2pt from 0.7%, explained by the spread between gross margin 37.4% (prior year 36.1%) and SG&A ratio 28.5% (prior year 27.6%). The rise in SG&A ratio reflects growth investments and M&A integration costs, but the rebound from prior-year impairment/other expenses (total approx. ¥25.4B) normalized operating-stage profitability. [Cash Quality] OCF ¥35.3B is 1.6x net income ¥21.6B, showing solid cash backing of earnings. OCF/EBITDA ratio is 0.62x (EBITDA ≒ ¥56.9B, operating income ¥29.1B + depreciation & amortization ¥27.9B), relatively low, with corporate tax payments ¥18.1B and lease payments ¥9.3B pressuring cash. [Investment Efficiency] Total asset turnover improved to 0.88x (prior year 0.80x). Goodwill rose sharply to ¥30.6B (prior year ¥11.7B, +162%), and intangible-asset ratio rose to 13.9% of total assets (prior year 12.7%). This reflects growth investment via M&A, but as goodwill is non-amortizing under IFRS, impairment-test sensitivity has increased. [Leverage & Solvency] Equity ratio 63.0% (prior year 64.6%) remains stable. Interest-bearing debt was ¥0.8B (prior period ¥3.5B, -77.7%), effectively net cash, and interest coverage ≒ 115x (operating income / finance costs) is extremely strong. Current ratio was 189% (current assets ¥141.2B / current liabilities ¥74.5B), indicating healthy short-term payment capacity, but the short-term liability ratio is high at 71% (current liabilities / total liabilities), requiring management of lease-related current liabilities ¥10.0B and other current liabilities ¥37.9B during the period.
Operating CF was ¥35.3B (prior year ¥42.9B, -17.7%), securing 1.6x net income of ¥21.6B. Pre-working-capital subtotal was ¥52.4B, with accounts receivable increase -¥1.6B, accounts payable decrease -¥5.2B, inventories decrease +¥0.1B, and consumption tax payable increase +¥1.7B impacting cash. Corporate tax payments ¥18.1B and lease payments ¥9.3B were major outflows. Investing CF was -¥37.2B (prior year +¥6.0B), a large outflow comprised of capital expenditure -¥9.1B, intangible asset acquisitions -¥17.9B, investment acquisitions -¥8.0B, investment disposals +¥12.1B, and subsidiary acquisitions -¥14.4B. This reflects an acceleration of growth strategy through M&A and intangible investment. Financing CF was -¥34.0B (prior year -¥20.1B), driven by long-term loan repayments -¥3.0B, lease liability repayments -¥9.3B, share buybacks -¥10.0B, and dividend payments -¥11.7B. Free Cash Flow was OCF ¥35.3B + Investing CF -¥37.2B = -¥1.9B, turning negative. Cash and equivalents at period-end were ¥87.4B (prior year ¥123.1B, -¥35.7B), reflecting total returns ¥21.7B and cash outflows for M&A/investments. The decrease in accounts payable and increase in accounts receivable suggest a temporary working-capital deterioration, but signs of manipulation are limited.
Of the period’s net income ¥21.6B, ordinary items were the primary contributors; the prior-year equity-method investment disposal gain of ¥14.1B did not recur. Conversely, prior-year impairments ¥25.2B and other expenses ¥25.4B contracted sharply to impairment ¥0.6B and other expenses ¥1.3B this period, normalizing earnings quality. Non-operating income was small (finance income ¥1.3B, 0.4% of sales), indicating low dependency. OCF / net income was 1.6x, reflecting high accrual quality and good cash backing. However, OCF/EBITDA at 0.62x is low, with corporate tax payments ¥18.1B (≈60% of pre-tax profit ¥30.1B) and lease payments ¥9.3B pressuring cash. The inversion between Ordinary Income ¥19.0B and net income ¥21.6B reflects the non-recurrence of prior equity-method gains at the ordinary level and a temporary reduction in pre-tax one-off expenses that boosted net income. One-off items were minor (impairment ¥0.6B), supporting earnings recognition based on core profitability. Comprehensive income was ¥23.7B, ¥2.1B higher than net income ¥21.6B; other comprehensive income comprised valuation gains on other financial assets ¥0.7B, remeasurements of defined benefit plans ¥0.9B, and foreign currency translation adjustments ¥0.5B, so the impact on capital quality is limited.
Against the full-year guidance (Revenue ¥340.0B, Operating Income ¥30.0B, Net Income Attributable to Parent ¥20.5B), actual performance was Revenue ¥328.2B (progress 96.5%), Operating Income ¥29.1B (97.0%), and Net Income Attributable to Parent ¥21.1B (102.9%). Revenue and operating income slightly missed guidance, while final profit exceeded expectations. Upside factors included a larger-than-assumed reduction in other expenses and increased finance income. Shortfalls were driven by delayed revenue recognition timing in Q4 and higher SG&A. Actual EPS was ¥83.19 versus guidance ¥81.12, a 2.6% beat. Dividend guidance ¥22.00 was exceeded by actual annual dividend ¥42.00 (interim ¥20 + year-end ¥22), with interim including a ¥2 commemorative dividend for the 95th anniversary, making the effective base ¥40. Guidance achievement was generally sound and underlying assumptions were validated. Contract liabilities ¥7.8B suggest recognized revenue opportunities for the next fiscal year, and realization of intangible investment and M&A effects is expected to be the next period’s growth driver.
Dividends were annual ¥42.00 (interim ¥20, year-end ¥22), with a payout ratio of 55.2% (based on basic EPS ¥83.19). The interim included a ¥2 commemorative dividend for the 95th anniversary, making the effective annual base ¥40. Prior year dividend was ¥26 (including a special dividend ¥16); excluding the special dividend the regular dividend was ¥10, so effective regular dividend rose materially to ¥40 this period. Dividend policy is profit-linked and payout ratio sits within industry-standard ranges. Share buybacks of ¥10.0B were executed, acquiring 3.1 million shares (approximately 12.2% of the average shares outstanding of 25.3 million during the period) to improve capital efficiency. Total returns totaled dividends ¥11.7B + buybacks ¥10.0B = ¥21.7B, giving a Total Return Ratio of 103% relative to net income attributable to owners of the parent ¥21.1B. Because FCF was -¥1.9B this period, total returns were funded from on-hand cash and investment disposal proceeds (¥12.1B). With cash equivalents ¥87.4B and OCF ¥35.3B, short-term sustainability of dividends and returns is supported, but the ability to sustain both M&A/intangible investment pace and high total returns will depend on future investment priorities. Mid-term policy is expected to prioritize growth investment while adjusting total returns flexibly according to profit levels.
Demand sensitivity to economic conditions: Approximately 75% of revenue is disclosure/IR related to listed companies, so a stagnant capital market or reduced IPO activity could weaken demand. Financial-product disclosure has already declined -1.7% YoY, embedding downside risk in an economic downturn. The single-segment structure limits diversification benefits.
M&A integration and goodwill impairment risk: Goodwill surged to ¥30.6B (8.2% of total assets, 12.6% of net assets) with ¥14.4B spent on subsidiary acquisitions. Under IFRS non-amortization, future impairment tests could cause earnings volatility. Delays in realizing acquisition synergies or shortfalls in revenue plans increase the likelihood of impairment charges. The company has precedent of recording impairments ¥25.2B in the prior year, warranting monitoring.
Heavy short-term liabilities and liquidity risk: Short-term liability ratio is 71% with current portion of lease liabilities ¥10.0B and other current liabilities ¥37.9B concentrating intraperiod cash needs. While OCF is ample, corporate tax payments ¥18.1B and lease payments ¥9.3B require careful intraperiod working-capital timing management. Additionally, non-current other financial liabilities ¥15.4B (including non-controlling-interest-related forward contracts) carry uncertainty around future cash outflows.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Return on Equity | 8.7% | 6.3% (3.2%–9.9%) | +2.4pt |
| Operating Margin | 8.9% | 7.8% (4.6%–12.3%) | +1.1pt |
| Net Margin | 6.6% | 5.2% (2.3%–8.2%) | +1.4pt |
Profitability metrics exceed manufacturing medians, indicating a favorable industry position.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 5.9% | 3.7% (-0.4%–9.3%) | +2.2pt |
Revenue growth outpaces the median by 2.2pt, exceeding industry-average growth pace.
※ Source: Company compilation
Normalization of margins and ROE recovery: The rebound from prior-year large impairment and other expenses (total approx. ¥25.4B) drove operating margin to 8.9% (prior year 0.7%), net margin to 6.4% (prior year 1.5%), and ROE to 8.7% (prior year 1.8%), a dramatic improvement. Expense normalization is expected to continue and core profitability has returned to levels above industry medians. The SG&A ratio increase (+0.9pt) reflects growth investment, but SG&A growth (+9.6%) outpaced revenue growth (+5.9%), a point to watch as it will affect operating leverage next period.
Growth acceleration via M&A and intangible investment: Goodwill increased by +¥18.9B (+162%), intangible asset acquisitions ¥17.9B, and subsidiary acquisitions ¥14.4B signal active growth investment. The company is reinforcing competitive advantage in disclosure-related single-segment operations while expanding into adjacent areas such as database services and IR/events. Contract liabilities ¥7.8B indicate revenue stability and a favorable short-term order environment. While goodwill increases entail impairment risk, current integration is in early stages and realized risk is limited at this time.
Balance between cash generation and total returns: OCF ¥35.3B is 1.6x net income, but investing CF -¥37.2B produced FCF -¥1.9B. Total returns ¥21.7B (Total Return Ratio 103%) exceeded net income, showing an active stance to balance growth investment and shareholder returns. With cash ¥87.4B and effectively no net debt, financial flexibility is high and short-term sustainability of returns is supported. Mid-term sustainability of total returns will depend on M&A/intangible investment pace and improvement in OCF/EBITDA. Management of lease liabilities ¥23.1B and non-current other financial liabilities ¥15.4B will determine future cash demands.
This report was automatically generated by AI analyzing XBRL financial statement data and is an earnings analysis document. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are based on publicly disclosed financial statements compiled by the company for reference. Investment decisions are your own responsibility; please consult a professional advisor as necessary.