UCHIDA YOKO CO.,LTD. FY2026 Q3 Earnings Report

Quick View

Executive Summary

This earnings period recorded double-digit increases in Revenue, Operating Income, and Net Income, primarily driven by a significant increase in the Public Sector-Related Business. Revenue was ¥314.37B (+34.2% YoY), Operating Income was ¥15.92B (+35.0%), Ordinary Income was ¥16.71B (+35.5%), and Net Income attributable to owners of the parent was ¥12.18B (+45.1%). In addition to profit growth exceeding the Revenue growth rate, profit before tax includes a ¥1.06B gain on the sale of investment securities. Accordingly, the growth in recurring earnings power should be evaluated separately from one-off factors.

Factors Affecting Earnings

【Revenue】Revenue increased significantly to ¥314.37B, up +34.2% YoY. The Public Sector-Related Business drove most of the Company-wide increase, with Revenue of ¥141.47B (+89.3%), while the Information-Related Business also secured higher Revenue of ¥126.97B (+11.7%). The Office-Related Business was largely flat at ¥45.52B (-0.2%). Revenue composition was 45.0% for the Public Sector-Related Business, 40.4% for the Information-Related Business, and 14.5% for the Office-Related Business, indicating a substantial increase in dependence on the Public Sector-Related Business from the previous year.

【Profit and Loss】Operating Income increased to ¥15.92B (+35.0%), Ordinary Income to ¥16.71B (+35.5%), and Net Income to ¥12.21B (+45.1%), with each increasing at a faster pace than Revenue. By segment, profit from the Public Sector-Related Business was ¥10.77B (+67.0%, profit margin 7.6%), accounting for the majority of Company-wide Operating Income. However, compared with Revenue growth of 89.3%, profit growth was 67.0%, indicating a slight decline in the segment’s profit margin. Despite higher Revenue, the Information-Related Business recorded lower profit of ¥2.86B (-1.4%), highlighting issues related to project mix and cost control. The fact that Net Income growth exceeded Ordinary Income growth was largely attributable to the recognition of extraordinary income, including a ¥1.06B gain on the sale of investment securities. In conclusion, although the Company as a whole achieved higher Revenue and profit, the quality of profit growth is partly dependent on the expansion of the Public Sector-Related Business and one-off gains from investment sales.

Segment Analysis

The Public Sector-Related Business became the Company’s largest pillar, with Revenue of ¥141.47B (+89.3% YoY), segment profit of ¥10.77B (+67.0%), and a profit margin of 7.6%, accounting for 67.6% of Company-wide Operating Income. The Information-Related Business recorded higher Revenue but lower profit, with Revenue of ¥126.97B (+11.7%), profit of ¥2.86B (-1.4%), and a profit margin of 2.2%, suggesting the potential impact of price competition, outsourcing costs, and personnel expenses. The Office-Related Business remained largely flat, with Revenue of ¥45.52B (-0.2%), profit of ¥2.23B (-0.3%), and a profit margin of 4.9%. Although the Public Sector-Related Business has a higher profit margin than the other two segments, its margin declined year on year, making project profitability management during this period of rapid expansion a key focus.

Key Financial Metrics

【Profitability】The Operating Profit Margin was 5.1%, calculated from a structure consisting of a gross margin of 15.1% and an SG&A expense ratio of 10.0%. The Net Profit Margin was 3.9%, improving from approximately 3.6% in the same period of the previous year.【Cash Flow Quality】Accounts receivable were ¥101.72B, accounting for 47.3% of total assets. Together with the inventory composition, including work in progress of ¥15.47B, this indicates an earnings structure prone to a time lag between Revenue and profit recognition and cash conversion.【Investment Efficiency】ROE was 14.9%, formed through the combination of the Net Profit Margin, total asset turnover, and financial leverage. The contributions from financial leverage and asset turnover were relatively significant.【Financial Soundness】The Equity Ratio was 38.2%, down from 40.3% in the previous year. Current assets of ¥168.98B exceeded current liabilities of ¥120.38B, while cash and deposits of ¥37.92B were substantially higher than short-term borrowings of ¥3.68B.

Cash Flow Analysis

Although the Company does not disclose a cash flow statement, its cash trends can be assessed from changes in the balance sheet. Accounts receivable increased significantly to ¥101.72B from ¥69.63B in the previous year, suggesting that the accumulation of trade receivables accompanying higher Revenue may be placing pressure on working capital. Work in progress was ¥15.47B, representing a high proportion of total inventories, including raw materials and finished goods, and indicating funds tied up in ongoing projects. Meanwhile, cash and deposits increased to ¥37.92B from ¥25.87B in the previous year, while increases in operating liabilities such as accounts payable of ¥74.99B and contract liabilities of ¥15.65B supported liquidity. Overall, the Company is experiencing simultaneous increases in accounts receivable and work in progress alongside higher operating liabilities and cash on hand during a period of Revenue growth.

Quality of Earnings

Profit before tax of ¥17.77B includes the one-off factor of a ¥1.06B gain on the sale of investment securities, representing approximately 6.0% of profit before tax. Excluding this factor, the growth in recurring earnings power originating from Operating Income of ¥15.92B remains the core driver of profit growth. Non-operating income was ¥0.90B, primarily consisting of items such as dividend income of ¥0.34B, and was limited in scale at approximately 0.3% of Revenue. The improvement in the Net Profit Margin was influenced more by non-operating income and extraordinary gains than by the approximately 3bp expansion in operating-level margins. Recurring profitability should therefore be evaluated separately from one-off gains and losses. In addition, the increases in accounts receivable and work in progress suggest from an accrual perspective that the recognized profit may require time to be realized as cash.

Earnings Forecast and Guidance

The progress rates for cumulative Q3 results against the full-year Company forecasts—Revenue of ¥421.00B, Operating Income of ¥15.40B, and Ordinary Income of ¥16.30B—were 74.7%, 103.4%, and 102.5%, respectively. While Revenue was broadly in line with the standard progress rate of 75%, each profit measure had already reached a level exceeding the full-year forecast. Both the earnings forecast and dividend forecast have been revised, and the key areas of focus going forward will be project progress, the status of revenue recognition toward the fiscal year-end, and the revised full-year levels.

Shareholder Returns

The full-year forecast dividend per share is ¥72.00 after accounting for the stock split, resulting in a Payout Ratio of 30.9% against forecast EPS of ¥233.22. Cumulative Q3 Net Income of ¥12.18B has already exceeded the full-year Net Income forecast of ¥11.50B, providing sufficient earnings support for the dividend. Retained earnings were substantial at ¥66.37B, indicating an ample accumulated source for dividends. In addition, a 1-for-5 stock split, effective January 21, 2026, has been implemented, and the dividend forecast is stated on a post-split basis.

Risk Factors

1. Concentration of growth in the Public Sector-Related Business: The Public Sector-Related Business accounts for 67.6% of Company-wide Operating Income, creating a structure in which fluctuations in order trends and project profitability in this business can have a significant impact on overall performance.

2. Increase in accounts receivable and work in progress: Accounts receivable of ¥101.72B accounts for 47.3% of total assets, and working capital accumulation is progressing when combined with work in progress of ¥15.47B. Delays in collection or project completion could affect both capital efficiency and profit margins.

3. Higher Revenue but lower profit in the Information-Related Business: While Revenue increased by 11.7%, segment profit declined by 1.4%, suggesting that price competition and increases in outsourcing costs and personnel expenses may be pressuring profitability.

Industry Benchmark (Reference; Compiled by the Company)

Industry Benchmark (trading)

Profitability and Returns

Both the Operating Profit Margin and Net Profit Margin exceed the industry median, indicating that profitability is relatively favorable within the industry.

Growth and Capital Efficiency

The Revenue growth rate substantially exceeds the industry median, with the expansion of the Public Sector-Related Business driving growth that outpaces the industry average.

※Source: Compiled by the Company

Key Points from the Earnings Results

1. Due to the expansion of the Public Sector-Related Business, cumulative Q3 Operating Income, Ordinary Income, and Net Income all exceeded the full-year Company forecasts. The fact that profit progress exceeded 100% despite a Revenue progress rate of 74.7% is worth reviewing together with the details of the revisions to the Q4 earnings forecast.

2. Against Revenue growth of 34.2%, the gross margin remained at 15.1%; the profit margin of the Public Sector-Related Business declined year on year, while the Information-Related Business recorded higher Revenue but lower profit. The trend in project profitability should be monitored from the perspective of the conversion of Revenue growth into profit.

3. Net Income growth of (+45.1%) includes the one-off factor of a ¥1.06B gain on the sale of investment securities. Recurring earnings power is best assessed primarily through the trends in Operating Income (+35.0%) and segment profit.

Theoretical Share Price (Reference Value)

Sensitivity: ¥1,889–¥2,001 at ±1% in the cost of equity, and ¥1,937–¥1,954 at ±0.1 in ω.

Notes:

• Because Net Income progress against the full-year forecast (106%) exceeds the standard level (75%), forecast EPS has been adjusted upward within a maximum range of +10% (because companies whose progress is ahead of schedule tend to exceed their forecasts; the adjustment may be excessive for businesses with strong seasonality).
• Net assets as of the quarter-end have been used (there is a timing difference relative to the full-year forecast).
• Because 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 solely from publicly disclosed data; this is not a forecast of the market share price or a recommendation of any specific investment action, and does not predict or guarantee future share prices.)

---

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

---End of Report---