| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥30.7B | - | - |
| Operating Income | ¥6.3B | - | - |
| Ordinary Income | ¥7.9B | - | - |
| Net Income | ¥5.6B | - | - |
| ROE | 0.4% | - | - |
This quarterly financial results report secured high profitability through the two-pronged contributions of investment realization income and operating fees (fund management fees). Revenue was ¥30.7B, operating income was ¥6.3B (operating margin of 20.4%), ordinary income was ¥7.9B, and net income was ¥5.6B (net margin of 18.4%). Revenue consisted of ¥21.2B in investment realization income from the sale of investment securities and other activities, and ¥9.6B in partnership operating income, maintaining a highly profitable structure with a gross margin of 69.4%. Meanwhile, ROE remained at 0.4%, as the asset composition—with quarterly revenue small relative to total assets of ¥1,580.0B—restrained capital efficiency.
【Revenue】Revenue of ¥30.7B consisted of ¥21.2B in investment realization income related to operational investment securities (approximately 69% of the total) and ¥9.6B in management fees associated with partnership operations (approximately 31%). While investment realization income is highly volatile and linked to market conditions and the exit environment, operating fees are highly recurring and stable income; the mix of the two determines the nature of revenue.
【Profit and Loss】After deducting SG&A expenses of ¥9.7B (SG&A ratio of 31.6%) from gross profit of ¥21.3B (gross margin of 69.4%), the Company secured operating income of ¥6.3B (operating margin of 20.4%). Ordinary income increased to ¥7.9B due to the recognition of ¥1.6B in non-operating income (including ¥0.6B in miscellaneous income), while net income after deducting ¥2.2B in corporate income taxes and other taxes (effective tax rate of 28.1%) was ¥5.6B (net margin of 18.4%). The gap between ordinary income and net income remained within the range of a standard tax burden. Both the gross margin and operating margin remained at high levels, indicating solid performance in terms of both cost efficiency and revenue structure.
【Profitability】The operating margin of 20.4%, net margin of 18.4%, and gross margin of 69.4% were all at high levels, with the revenue structure supported by the mix of investment realization income and operating fees. 【Cash Quality】The Company held ¥604.4B in cash and deposits and ¥371.1B in investment securities, while current liabilities remained at ¥8.4B, resulting in an extremely low current liabilities ratio relative to current assets of ¥1,199.5B. 【Investment Efficiency】ROE was 0.4%, while the total asset turnover ratio was approximately 0.019x, calculated as revenue of ¥30.7B ÷ total assets of ¥1,580.0B. The limited earnings-generation capacity relative to the asset scale was a constraint on capital efficiency. 【Financial Soundness】The equity ratio was 84.7% (85.0% at the end of the previous fiscal year), and long-term borrowings were minimal at ¥0.1B. Liabilities primarily consisted of ¥150B in convertible bonds, resulting in restrained financial leverage.
As no cash flow statement has been disclosed, funding trends are assessed based on changes in the balance sheet. Cash and deposits were ¥604.4B, down ¥7.4B from ¥611.8B at the end of the previous fiscal year, while investment securities were ¥371.1B, up ¥6.6B from ¥364.5B at the end of the previous fiscal year, suggesting a certain shift of funds from cash into investment assets. Total current assets were ¥1,199.5B, essentially unchanged from ¥1,204.7B at the end of the previous fiscal year, with no significant change in the asset composition. Current liabilities declined substantially to ¥8.4B from ¥16.8B at the end of the previous fiscal year, indicating progress in reducing short-term debt. Total assets and net assets also remained broadly unchanged from the end of the previous fiscal year, indicating stable financial management during the quarter, limited to fine-tuning of the asset composition.
Revenue of ¥30.7B consisted of ¥21.2B in investment realization income linked to market conditions and the exit environment, and ¥9.6B in highly recurring partnership operating fees, with the former serving as the primary source of revenue volatility. Non-operating income of ¥1.6B consisted of ¥0.6B in miscellaneous income, ¥0.03B in foreign exchange gains, and other items. Although it accounted for more than 5% of revenue, its absolute amount was limited and its impact on ordinary income remained supplementary. The difference between ordinary income of ¥7.9B and net income of ¥5.6B resulted from corporate income taxes and other taxes of ¥2.2B (effective tax rate of 28.1%), which was within the range of a standard tax burden, with no significant divergence attributable to temporary tax adjustments. SG&A expenses of ¥9.7B remained broadly stable relative to revenue, and accruals involving significant estimation elements were limited. Overall, the structure is such that increasing the proportion of recurring operating fee income would contribute to stabilizing earnings quality.
From the fiscal year ending March 2026, the Company revised its dividend policy and adopted a policy of paying the higher of an annual dividend amount equivalent to a DOE (the ratio of annual dividends to shareholders’ equity at the end of the previous fiscal year) of 6% or a payout ratio of 50%. The interim dividend is based on a DOE of 3%. The annual dividend forecast for the current period is ¥66.5 per share, unchanged at the same level as the previous fiscal year’s actual result, with no revision to the forecast as of the end of the quarter. Against the backdrop of high financial soundness and liquidity, including an equity ratio of 84.7% and cash and deposits of ¥604.4B, the Company has sufficient capacity to implement its dividend policy.
Exit Environment Volatility Risk: Investment realization income of ¥21.2B accounts for approximately 69% of revenue, creating a structure in which quarterly earnings levels are susceptible to fluctuations depending on trends in exit markets such as IPOs and M&A.
Risk of Fluctuations in Securities Valuation: The Company holds ¥371.1B in investment securities, while deferred tax liabilities increased by ¥12.1B to ¥78.8B from ¥66.7B at the end of the previous fiscal year. Expansion of valuation differences (unrealized gains) and fluctuations in other comprehensive income may affect financial indicators.
Convertible Bond-Related Risk: Convertible bonds with stock acquisition rights of ¥150B are recognized as liabilities. Depending on market conditions and share-price trends, future conversion and redemption terms may affect the financial composition.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 20.4% | 13.4% (9.8%–53.2%) | +7.0pt |
| Net Margin | 18.4% | 9.4% (7.2%–39.5%) | +8.9pt |
Both the operating margin and net margin exceed the industry median, placing the Company at a relatively high level within the industry in terms of profitability.
Source: Compiled by the Company
During the quarter, the Company secured high margins, with an operating margin of 20.4% and a net margin of 18.4%. However, ROE remained at 0.4%, and revenue-generation capacity relative to total assets (total asset turnover of approximately 0.019x) was a constraint on capital efficiency.
The revenue composition consisted of investment realization income (approximately 69%) and operating fees (approximately 31%). While the former’s sensitivity to market conditions is a source of quarterly earnings volatility, an increased proportion of the latter would contribute to stabilizing earnings quality.
Against the backdrop of high financial soundness and liquidity, including an equity ratio of 84.7% and cash and deposits of ¥604.4B, the annual dividend forecast of ¥66.5 per share remains unchanged under the dividend policy of paying the higher of a DOE of 6% or a payout ratio of 50%.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. 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 with professionals as necessary.
---End of Report---