These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.
| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | - | - | - |
| Operating Income | ¥154.1B | ¥139.5B | +10.5% |
| Ordinary Income | ¥128.1B | ¥124.0B | +3.3% |
| Net Income | ¥90.3B | ¥79.6B | +13.4% |
| ROE | 3.8% | 3.3% | - |
The Company recorded higher revenue and earnings, driven by increased profit in the FinTech Business and an improvement in the gross profit margin; however, higher interest expenses weighed on growth at the ordinary income level. Revenue was ¥723.6B (+7.4% YoY), operating income was ¥154.1B (+10.5%), ordinary income was ¥128.1B (+3.3%), and net income was ¥90.3B (+13.4%). While operating income growth exceeded revenue growth, improving the operating margin to 21.3% (20.7% in the previous year), interest expenses increased to ¥20.7B (¥13.4B in the previous year), limiting ordinary income growth to +3.3%. Net income increased at a faster pace than ordinary income, owing to a decline in the effective tax rate (33.3%→28.5%).
【Revenue】Revenue was ¥723.6B, representing a 7.4% YoY increase. By segment, the FinTech Business led growth as the core business, with external revenue of ¥532.2B (73.5% of the total, +8.9% YoY), while Retail showed signs of recovery at ¥191.4B (26.5% of the total, +3.3% YoY).
【Profit and Loss】Operating income was ¥154.1B (+10.5% YoY), primarily due to an improvement in the gross profit margin to 89.5% (88.5% in the previous year, +1.0pt). By segment, the FinTech Business generated segment profit of ¥139.9B (+3.4% YoY), accounting for 90.8% of total operating income and remaining the core business. However, Retail showed a notable improvement in profitability, with segment profit of ¥34.1B (+38.4% YoY) and its profit margin improving from 13.3% to 17.8%. Meanwhile, the SG&A expense ratio deteriorated by +0.3pt to 68.2% (67.9% in the previous year), and higher interest expenses, which increased to ¥20.7B (¥13.4B in the previous year), caused ordinary income to grow more slowly than operating income, reaching ¥128.1B (+3.3%). Although the Company recorded extraordinary losses of ¥2.2B (including ¥1.8B in losses on disposal of fixed assets), the impact was limited, and net income increased to ¥90.3B (+13.4%), exceeding the growth rate of ordinary income owing to the lower effective tax rate. Revenue and earnings increased.
Segment profit was ¥139.9B for the FinTech Business (+3.4% YoY, 80.4% of total reported segments) and ¥34.1B for Retail (+38.4% YoY, 19.6% of total reported segments), indicating that the structure in which the FinTech Business generates the majority of profit remains unchanged. However, in terms of profit margins, the FinTech Business declined slightly to 26.3% (27.7% in the previous year, -1.4pt), while Retail improved to 17.8% (13.3% in the previous year, +4.5pt), indicating that the drivers of profit growth are expanding to include improved profitability in Retail. Against combined segment profit of ¥174.0B, adjustments for corporate expenses and other items of -¥19.9B (-¥20.4B in the previous year) were deducted, resulting in operating income of ¥154.1B.
【Profitability】The operating margin improved to 21.3% (20.7% in the previous year), the gross profit margin to 89.5% (88.5% in the previous year), and the net profit margin to 12.5% (11.8% in the previous year). 【Cash Flow Quality】Operating Cash Flow (OCF) was -¥758.9B, representing a substantial negative gap relative to net income of ¥90.3B, indicating that current-period earnings have not translated into cash generation. 【Investment Efficiency】ROE was 3.8% (quarterly result), EPS was ¥50.46 (¥44.12 in the previous year, +14.4%), and BPS was ¥1,319.72 (¥1,359.01 in the previous year), declining slightly to reflect the decrease in net assets. 【Financial Soundness】The equity ratio declined to 19.6% (21.4% in the previous year), while short-term borrowings increased to ¥1,648.0B (+27.0% YoY) and commercial paper increased to ¥860B (+177% YoY), indicating greater reliance on short-term funding.
Operating Cash Flow was -¥758.9B (-¥715.9B in the previous year), with the negative amount widening and a substantial divergence emerging relative to net income of ¥90.3B. Investing Cash Flow was -¥30.0B, with investment spending, including acquisitions of property, plant and equipment, decreasing from -¥67.1B in the previous year. Free Cash Flow (OCF + investing cash flow) was -¥788.9B. The Company was unable to fund shareholder returns, including dividend payments of ¥118.9B and share repurchases of ¥28.96B, through internal funds, and financing cash flow was +¥770.9B, with funding supplemented through external financing, including short-term borrowings (+¥349.9B) and commercial paper (+¥550B). This funding structure indicates that whether cash generation from operating activities normalizes will be a key issue for future liquidity management.
Current-period earnings were supported by recurring factors, namely improvements in operating income and the gross profit margin. Extraordinary items were small in scale, comprising extraordinary gains of ¥0.2B and extraordinary losses of ¥2.2B, limiting the impact of temporary factors. In non-operating items, non-operating expenses of ¥30.6B, primarily consisting of interest expenses of ¥20.7B, substantially exceeded non-operating income of ¥4.6B, including dividend income of ¥2.0B, placing greater downward pressure on ordinary income growth than on net income growth. Comprehensive income was ¥62.7B, representing a -¥27.6B divergence from net income of ¥90.3B. This was primarily due to other securities valuation differences deteriorating from +¥22.9B in the previous year to -¥27.6B, with valuation gains and losses associated with market fluctuations weighing on comprehensive income. In addition, OCF was -¥758.9B, substantially below net income, indicating that continued monitoring of earnings quality is warranted from the perspective of the difference between accounting earnings and cash generation.
The Q1 progress rates against the full-year forecasts were 27.8% for operating income (¥154.1B / ¥555.0B), 29.1% for ordinary income (¥128.1B / ¥440.0B), and 30.6% for net income (¥90.3B / ¥295.0B), all exceeding the simple one-quarter (25%) benchmark. During the current quarter, the earnings forecast was revised, with the full-year operating income forecast set at +10.5% YoY and the ordinary income forecast at +3.2% YoY. There was no revision to the dividend forecast, and full-year DPS of ¥134 remains unchanged.
The full-year dividend forecast is ¥134 per share, and the forecast payout ratio against projected full-year EPS of ¥164 is high at 81.7%. During Q1, the Company repurchased treasury shares for ¥28.96B and continued shareholder returns together with dividend payments. However, OCF was -¥758.9B and FCF was also -¥788.9B, meaning that these returns could not be funded through internal funds, and dividend funding depends on external financing, including short-term borrowings and commercial paper. The sustainability of the dividend policy is premised on the normalization of OCF going forward.
Concentration of profit in the FinTech Business: The FinTech Business accounts for 90.8% of operating income (¥139.9B / ¥154.1B), indicating a high degree of reliance on a single business. Changes in interest-rate and credit conditions could have a relatively significant impact on consolidated performance.
Reliance on short-term funding and rollover risk: Short-term borrowings increased to ¥1,648.0B (+27.0% YoY), and commercial paper increased to ¥860B (+177% YoY), resulting in short-term liabilities substantially exceeding cash and deposits of ¥517.5B. Changes in market conditions could cause refinancing terms to affect liquidity management.
Persistent negative operating cash flow: OCF was -¥758.9B, with the negative amount widening from the previous year and a substantial divergence from net income. The equity ratio also declined to 19.6% (21.4% in the previous year), requiring monitoring of developments in both earnings-to-cash conversion and the capital base.
Due to the high-margin structure of the FinTech Business and improved profitability in Retail, the gross profit margin improved to 89.5% (88.5% in the previous year) and the operating margin to 21.3% (20.7% in the previous year). Progress against the full-year forecasts is also ahead of the one-quarter benchmark for all four key indicators.
OCF remains substantially negative at -¥758.9B relative to net income of ¥90.3B, and shareholder returns, including dividends and share repurchases, continue to depend on external financing such as short-term borrowings and commercial paper.
As short-term borrowings and commercial paper accumulated, the equity ratio declined to 19.6% (21.4% in the previous year). Changes in the financial structure should be monitored together with the progress of OCF normalization.
This is a reference range mechanically calculated solely from publicly disclosed data using a residual income model (Ohlson-type model with an explicit 5-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear (bearish) | ¥1,378 |
| base (base case) | ¥1,449 |
| bull (bullish) | ¥1,487 |
| Calculation Assumption | Value |
|---|---|
| Book value per share (BPS) | ¥1,320 |
| Adjusted forecast EPS | ¥168.5 |
| Cost of equity r | 9.15% (10-year government bond 2.65% + equity risk premium 6.00% + size premium 0.50%) |
| Persistence coefficient of residual income ω / explicit forecast period | 0.62 / 5 years |
| Assumed payout ratio | 81.7% |
| Reliability adjustment for forecast EPS | ×1.028 (based on the actual guidance achievement rate of comparable companies) |
| implied PBR / PER |
Sensitivity: ¥1,411–¥1,489 at ±1% for the cost of equity, and ¥1,446–¥1,453 at ±0.1 for ω.
Notes:
(Calculation model: Residual income model / Interest-rate reference month: 2026-06 / This value does not forecast or guarantee the future share price)
This report is an earnings analysis document automatically generated by AI through analysis of XBRL earnings summary data. It does not recommend investment in any specific issue. The industry benchmark is reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting a professional as necessary.
---End of Report---
| 1.10x / 8.6x |