| Metric | Current Period | Same Period Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥3397.9億 | ¥3338.5億 | +1.8% |
| Operating Income | ¥324.9億 | ¥273.2億 | +18.9% |
| Equity-Method Investment Gain/Loss | - | - | - |
| Ordinary Income | ¥332.1億 | ¥280.5億 | +18.4% |
| Net Income | ¥226.4億 | ¥189.1億 | +19.8% |
| ROE | 5.8% | 4.6% | - |
For Q2 (interim period) of the fiscal year ending December 2026, the company posted higher revenue and earnings, with the results characterized by improved profitability, particularly through double-digit growth in Operating Income and Net Income. Revenue was 3,397.9億円 (+1.8% year on year), Operating Income was 324.9億円 (+18.9%), Ordinary Income was 332.1億円 (+18.4%), and Net Income attributable to owners of the parent (hereinafter the same) was 226.1億円 (+19.9%). The primary reason earnings growth significantly outpaced revenue growth was improved cost efficiency, driven by the combination of an improvement in the gross margin to 32.1% (31.7% in the previous year, +0.4pt) and a decline in the SG&A ratio to 22.5% (23.6% in the previous year, -1.0pt). As a result, the Operating Income margin improved to 9.6% (8.2% in the previous year, +1.4pt).
【Revenue】Revenue was 3,397.9億円, representing a 1.8% year-on-year increase. By segment, Consumer increased to 1,369.2億円 (+2.5%) and Area increased to 681.3億円 (+3.7%), while Enterprise declined to 1,187.2億円 (-0.6%) and Professional declined to 247.2億円 (-5.1%). The segments posting revenue growth drove overall growth.
【Profit and Loss】Operating Income was 324.9億円 (+18.9%), and the Operating Income margin clearly improved to 9.6% (8.2% in the previous year, +1.4pt). Ordinary Income was 332.1億円 (+18.4%), while non-operating income of 10.5億円 (including dividend income of 2.0億円) and non-operating expenses of 3.2億円 (including interest expense of 0.5億円) were both small and within ordinary levels. Extraordinary gains and losses totaled a net gain of +4.3億円, primarily consisting of a gain on the sale of investment securities of 5.0億円; the amount was small, and its impact on business performance was limited to a temporary factor. Net Income was 226.1億円 (+19.9%), and earnings continued to grow even after deducting income taxes and other taxes of 110.0億円 (effective tax rate of approximately 32.7%). Since profit expanded more than revenue, the results can be characterized as higher revenue and higher earnings.
By segment, Enterprise made the largest contribution, with Operating Income of 129.6億円 (+14.3% year on year; margin of 10.9%). Consumer posted Operating Income of 115.3億円 (+18.7%; margin of 8.4%), while Area posted 66.7億円 (+33.6%; margin of 9.8%), with both segments recording higher earnings. Area, in particular, demonstrated a high growth rate. Professional, on the other hand, recorded lower revenue and earnings, with Operating Income of 27.0億円 (-5.9%; margin of 10.9%), although its profit margin remained at a level comparable to those of the other segments. Other businesses not included in the reported segments, including shared services, recorded an Operating Loss of 14.7億円, narrowing from a loss of more than 16.0億円 in the previous year. Overall, higher earnings in the corporate and regional businesses absorbed the decline in Professional, contributing to an improvement in the company-wide Operating Income margin.
【Profitability】The Operating Income margin was 9.6%, improving by +1.4pt from 8.2% in the previous year, while the Net Profit margin also increased to 6.7% (5.6% in the previous year, +1.0pt). Both the improvement in the gross margin to 32.1% (31.7% in the previous year) and the decline in the SG&A ratio to 22.5% (23.6% in the previous year) contributed, resulting in higher margins through improvements on both sides of the cost structure.【Cash Quality】Operating Cash Flow was 369.9億円, approximately 1.6 times Net Income of 226.1億円, indicating that earnings were supported by cash generation.【Investment Efficiency】ROE was 5.8%, and basic EPS was 107.58円 (86.61円 in the previous year, +24.2%). The decline in the average number of shares outstanding during the period, due to share repurchases, also contributed to growth in per-share indicators. BPS was 1,889.83円, down from 1,925.07円 in the previous year, reflecting the reduction in equity resulting from treasury share acquisitions.【Financial Soundness】The Equity Ratio was 72.4% (73.1% in the previous year), and cash and deposits were ample at 1,405.8億円. Interest-bearing debt, including short-term borrowings of 11.0億円 and long-term borrowings of 7.7億円, was minimal, leaving financial leverage at a low level.
Operating Cash Flow was 369.9億円 (+17.6% year on year), demonstrating cash-generation capacity exceeding Net Income of 226.1億円. In terms of working capital, trade receivables decreased from 1,266.2億円 in the previous year to 1,061.5億円, contributing +206.1億円 to cash flow. Meanwhile, inventories increased by +20.0% from 396.8億円 in the previous year to 476.3億円, representing a negative factor of -82.1億円. Investing Cash Flow was -152.6億円, including capital expenditures of -59.5億円. Financing Cash Flow was -413.0億円, with share repurchases of -300.0億円 and dividend payments being the primary sources of cash outflow. Free Cash Flow (Operating CF + Investing CF) was 217.4億円, securing a level sufficient to cover capital expenditures and shareholder returns.
The current period’s earnings were primarily driven by Operating Income, and the quality of earnings can be assessed as favorable. Non-operating income was limited to 10.5億円 (0.3% of revenue), mainly consisting of recurring items such as dividend income of 2.0億円. Extraordinary income of 5.1億円 primarily consisted of a gain on the sale of investment securities of 5.0億円. Together with extraordinary losses of 0.8億円, consisting of losses on the disposal and sale of fixed assets, the net amount remained small, and there was no situation in which temporary factors significantly distorted business performance. The gap between Ordinary Income of 332.1億円 and Net Income of 226.1億円 was attributable to income taxes and other taxes of 110.0億円 (effective tax rate of approximately 32.7%); no abnormal divergence apart from the tax burden was observed. Meanwhile, comprehensive income was 172.7億円, below Net Income of 226.1億円. Valuation differences on available-for-sale securities of -29.5億円, reversing from +18.1億円 in the previous year, and adjustments related to retirement benefits of -24.4億円 weighed on other comprehensive income. This divergence resulted from changes in the valuation of marketable assets held and retirement benefit obligations and should be considered separately from the earnings power of the core business.
The full-year earnings forecast is revenue of 6,850.0億円 (+0.8% compared with the previous fiscal year), Operating Income of 630.0億円 (+8.3%), and Ordinary Income of 640.0億円 (+7.0%). During the current quarter, revisions were made to the earnings and dividend forecasts. Progress against the full-year forecast in the first half was 49.6% for revenue, 51.6% for Operating Income, and 51.9% for Ordinary Income. These figures exceed the 50% benchmark for a half-year period, indicating that the improvement in the first-half profit margin is progressing slightly ahead of the full-year plan.
The interim dividend was 40.00円 per share (after reflecting the stock split), resulting in an interim Payout Ratio of 37.2% against EPS of 107.58円. The full-year dividend forecast is 55.00円 (after reflecting the stock split; 190.00円 before reflecting the split), and the forecast Payout Ratio against forecast EPS of 211.43円 is 26.0%, set at a conservative level compared with the first-half results. In addition, the company conducted share repurchases totaling 300.0億円, meaning that total shareholder returns, including dividends and share repurchases, were already high relative to Net Income of 226.1億円 in the first half alone. Given the financial foundation of cash and deposits of 1,405.8億円 and low interest-bearing debt, the company remains supported in terms of securing funds for shareholder returns. A two-for-one stock split of common shares was also implemented, effective April 1, 2026.
Segment-specific demand fluctuation risk: Professional recorded lower revenue and earnings, with revenue of 247.2億円 (-5.1% year on year) and Operating Income of 27.0億円 (-5.9%). Trends in corporate demand are creating variations in performance among segments.
Inventory risk resulting from higher inventories: Inventories were 476.3億円, up +20.0% from 396.8億円 in the previous year, and represented a negative factor of -82.1億円 in cash flow terms. Inventory levels require monitoring from the perspective of potential future inventory valuation losses and discounting pressure.
Non-operating and foreign exchange-related volatility risk: The company recorded a foreign exchange loss of 0.2億円 and has a business structure exposed to the impact of foreign exchange fluctuations associated with overseas procurement and transactions. In addition, valuation differences on securities were -29.5億円, reversing from +18.1億円 in the previous year, indicating that changes in the market value of securities held are affecting comprehensive income.
Profitability and Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 9.6% | – | – |
| Net Profit Margin | 6.7% | 7.0% (6.4%–7.5%) | -0.3pt |
The Net Profit margin is slightly below the industry median but remains within the IQR range (6.4%-7.5%).
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | 1.8% | 4.5% (2.2%–5.8%) | -2.6pt |
The revenue growth rate is below both the industry median and the lower bound of the IQR, indicating that top-line growth is relatively moderate compared with peers.
※Source: Compiled by the Company
Earnings growth accompanied by cost efficiency improvements: The Operating Income margin rose to 9.6% through improvements on both sides, with the gross margin improving by +0.4pt and the SG&A ratio declining by -1.0pt. This confirms an improvement in the earnings structure beyond the effects of revenue growth alone.
Divergence in working capital trends: While trade receivables declined from the previous year and conversion into cash progressed, inventories increased by +20.0%. The contrasting movements of the two items will be a key point of focus when assessing cash flow trends in the second half.
Shareholder returns and changes in equity: Share repurchases of 300.0億円 increased the balance of treasury shares to 503.5億円, while BPS declined year on year. Dividends were set at 40円 for the interim period and a forecast annual dividend of 55円 after reflecting the stock split, and changes in the shareholder return policy may affect the capital structure going forward.
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 security. The industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting with professionals as necessary.