| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥1987.3B | ¥1622.3B | +22.5% |
| Operating Income | ¥1162.9B | ¥901.2B | +29.0% |
| Profit Before Tax | ¥1169.2B | ¥902.8B | +29.5% |
| Net Income | ¥814.1B | ¥627.3B | +29.8% |
| ROE | 22.8% | 17.9% | - |
For the full year ended March 2026, Revenue was ¥1,987.3B (YoY +¥365.1B +22.5%), Operating Income was ¥1,162.9B (YoY +¥261.7B +29.0%), Ordinary Income was ¥549.2B (YoY +¥29.9B +5.8%), and Net Income attributable to owners of the parent was ¥791.4B (YoY +¥180.5B +29.5%), resulting in a marked increase in both revenue and profit. Higher stock market volatility and increased trading value lifted transaction-related revenues; Operating Margin improved significantly to 58.5% (up +2.9pt from 55.6% a year earlier). Revenue growth of +22.5% substantially outpaced Operating Expense growth of +11.4%, demonstrating strong operating leverage. Net income margin improved to 39.8% (up +2.1pt from 37.7%), and EPS was ¥76.81 (from ¥58.72, +30.8%), reflecting profit growth. Operating Cash Flow (OCF) was ¥1,077.5B (+25.1%), covering Net Income of ¥814.1B by 1.32x. Free Cash Flow was ¥925.0B, which covered dividends of ¥560.9B and share buybacks of ¥205.2B (total return ¥766.1B) by 1.21x, supporting sustainability of shareholder returns. Total assets contracted materially to ¥71.6兆 (from ¥85.4兆 a year earlier, -¥13.8兆) due to simultaneous reductions in clearing-related assets and liabilities; this reflects changes in clearing balances with market conditions and does not indicate a material change in credit risk.
[Revenue] Revenue was ¥1,987.3B (YoY +¥365.1B +22.5%), a substantial increase. Higher stock market volatility and larger trading value lifted volumes in cash and derivatives trading, driving growth across flow and stock revenue streams such as transaction fees, clearing fees, and information distribution revenues. Other revenue declined to ¥3.2B (from ¥19.4B, -¥16.3B), but the expansion of operating revenues led the overall increase.
[Profitability] Operating Expenses were contained at ¥836.0B (from ¥750.7B, +¥85.3B +11.4%), well below revenue growth of +22.5%, enabling Operating Income to grow ¥1,162.9B (+29.0%), outpacing revenue growth. Operating Margin improved to 58.5% (up +2.9pt from 55.6%), supported by fixed cost scale effects and an improved revenue mix. Ordinary Income was ¥549.2B (+5.8%); net financial income was ¥9.2B vs. financial expense ¥3.0B (net +¥6.2B), and equity-method investment income of ¥14.7B contributed to profits at the ordinary level. Profit Before Tax was ¥1,169.2B (from ¥902.8B, +29.5%); after income taxes of ¥355.1B (effective tax rate 30.4%), Net Income was ¥814.1B (+29.8%), of which Net Income attributable to owners of the parent was ¥791.4B (+29.5%). Non-controlling interests' share of profit was ¥22.7B (from ¥16.3B, +39.0%). In summary, robust market activity drove higher revenues and profits, while cost discipline and operating leverage supported margin expansion.
[Profitability] ROE was 23.1% (improved +4.8pt from 18.3% prior year), reflecting improvements in Net Income margin 39.8% (up +2.1pt from 37.7%) and Operating Margin 58.5% (up +2.9pt from 55.6%). Operating Expense Ratio fell to 42.1% (down -4.2pt from 46.3%), reflecting realized fixed-cost scale effects. [Cash Quality] OCF/Net Income was 1.32x, indicating high quality; OCF subtotal (before working capital changes) was ¥1,350.6B, from which corporate tax payments ¥285.1B and working capital change -¥273.1B produced net OCF ¥1,077.5B. Free Cash Flow was ¥925.0B, covering total returns ¥766.1B by 1.21x. [Investment Efficiency] BPS was ¥335.64 (from ¥327.57, +2.5%), EPS was ¥76.81 (from ¥58.72, +30.8%), consistent with ROE improvement. [Financial Soundness] Equity Ratio was 0.5%, extremely low, but clearing-underwritten assets ¥63.4兆 and clearing-underwritten liabilities ¥63.4兆, and segregated assets of clearing participants ¥7.7兆 and segregated deposits of clearing participants ¥7.7兆 form offsetting accounts, reflecting the exchange-specific asset/liability structure. Net interest-bearing debt is current corporate bonds and borrowings ¥524.9B (from ¥325.0B, +¥199.9B), but interest expense is minor at ¥2.9B, yielding an interest coverage (Operating Income / Interest Expense) of approximately 402x, indicating very strong coverage. Cash and cash equivalents were ¥1,104.7B, supporting liquidity; goodwill was ¥693.6B, representing 19.4% of equity, within a healthy range.
OCF was ¥1,077.5B (from ¥861.4B, +25.1%), generated from OCF subtotal ¥1,350.6B less corporate tax payments ¥285.1B, interest payments ¥2.9B, and lease payments ¥38.7B. Working capital changes consisted of increases in accounts receivable and similar items -¥48.75B, increases in accounts payable and similar items ¥21.74B, decrease in retirement benefit liabilities -¥5.15B, and other items ¥51.19B, for a net working capital change of -¥273.1B; relative to profit and cash flow levels this is small and shows no signs of discretionary manipulation. Investing Cash Flow was -¥152.4B, including time deposit placements -¥2,890.1B and withdrawals +¥2,819.1B (net -¥71.0B), tangible fixed asset additions -¥9.7B, and intangible asset acquisitions -¥75.0B, primarily investments related to data centers and trading system upgrades. Other investing items were +¥3.3B, yielding Free Cash Flow of ¥925.0B. Financing Cash Flow was -¥804.8B, driven mainly by dividend payments ¥560.9B, share buybacks ¥205.2B (total returns ¥766.1B), and lease repayments ¥38.7B. Cash and cash equivalents increased by ¥120.4B from ¥984.3B at the beginning of the period to ¥1,104.7B at the end of the period, reconcilable after considering foreign exchange impact +¥0.2B. OCF/Net Income 1.32x and Free Cash Flow/Total Return 1.21x indicate high-quality earnings.
Of Revenue ¥1,987.3B, special items were limited and recurring transaction-related revenues comprise the revenue base. Net of Other Revenue ¥3.2B and Other Expense ¥6.3B, the net -¥3.1B is minor, indicating limited volatility from one-off items. Financial income ¥9.2B relates to deposits and investment securities; financial expense ¥3.0B is primarily interest on borrowings; both are within normal ranges for business operations. Equity-method investment income ¥14.7B reflects returns on strategic investments but is small at 1.3% of Operating Income, contributing to stability of the profit structure. OCF/Net Income 1.32x and working capital change -¥273.1B imply accruals are nearly zero and profits are strongly cash-backed. The difference between Comprehensive Income ¥823.4B and Net Income ¥814.1B of ¥9.3B arises from Other Comprehensive Income (fair value changes on financial assets +¥5.9B; remeasurements of defined benefit plans +¥3.4B, total +¥9.3B), representing valuation adjustments outside net profit and not impairing the quality of net income. Ordinary income comprises the majority of results, indicating low dependence on one-off items.
Full year guidance was Revenue ¥2,050.0B (YoY +3.2%), Operating Income ¥1,150.0B (YoY -1.1%), Net Income attributable to owners of the parent ¥775.0B (YoY -2.1%), and EPS forecast ¥75.39. Actuals were Revenue ¥1,987.3B, achieving 96.9% of guidance (slightly below), Operating Income ¥1,162.9B (101.1% of guidance), and Net Income attributable to owners of the parent ¥791.4B (102.1% of guidance), exceeding profit guidance. Although Revenue fell slightly short, expense control and improved profitability led to outperformance at the profit level, confirming margin improvement. Dividend guidance was ¥30.00 per share while actual dividend was ¥61 (interim ¥25 + year-end ¥36), with the year-end including a special dividend of ¥10. The upside versus guidance was driven by expense discipline and operating leverage converting favorable market conditions into improved profitability.
Dividend per share was ¥61 (interim ¥25, year-end ¥36), with the year-end including a base dividend of ¥19 plus a special dividend of ¥10. Payout Ratio was 77.5% (based on Net Income attributable to owners of the parent ¥791.4B and total dividends equivalent ¥613.7B), a high level, but supported by strong cash generation: OCF ¥1,077.5B and Free Cash Flow ¥925.0B. Share buybacks totaled ¥205.2B (cash flow statement basis); combined with dividends ¥560.9B, Total Return Ratio was 96.8% (Total Return ¥766.1B / Net Income attributable to owners of the parent ¥791.4B), very high. Free Cash Flow ¥925.0B covered total returns ¥766.1B by 1.21x, indicating sustainability of returns supported by cash generation. Cancellation of treasury shares amounted to ¥200.0B, undertaken to improve capital efficiency. Dividend policy appears linked to performance, with future adjustments via flexible buybacks expected to vary with market conditions. Cash and cash equivalents were ¥1,104.7B, and effective interest-bearing debt is current corporate bonds and borrowings ¥524.9B (interest expense ¥2.9B, minor), supporting a view that sustainability of total returns is high in the medium term.
Trading volume and volatility dependence: A majority of Revenue ¥1,987.3B depends on transaction-related fees; a decline in market volatility or trading value would directly hit revenues. The YoY +22.5% revenue increase was supported by market activity, and a market reversal could expose margin compression risks due to operating expense rigidity.
System failure and cybersecurity risk: As operator of core exchange infrastructure, system outages or cyberattacks could cause trading suspensions, compensation costs, and reputational damage. IT investments (intangible asset acquisitions ¥75.0B) are underway to mitigate risks, but continuous investment burden and evolving threats present ongoing risk.
Apparent distortion of financial ratios due to clearing-related assets and liabilities: Clearing-underwritten assets and liabilities constitute the bulk of total assets ¥71.6兆, producing superficially abnormal metrics such as Equity Ratio 0.5% and D/E ratio 199.2x; this arises from accounting that records clearing participants’ assets and liabilities on an offsetting basis and thus diverges from underlying credit risk. However, this may cause misunderstanding among investors and rating agencies, requiring enhanced disclosure and explanation.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Return on Equity | 23.1% | 3.8% (1.1%–16.8%) | +19.3pt |
| Operating Margin | 58.5% | 8.8% (4.0%–20.0%) | +49.7pt |
| Net Margin | 41.0% | 4.3% (0.6%–11.3%) | +36.6pt |
Company ROE 23.1%, Operating Margin 58.5%, and Net Margin 41.0% all materially exceed industry medians, placing the company among the top tier in profitability and capital efficiency.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 22.5% | 2.1% (-4.5%–6.9%) | +20.5pt |
Revenue growth +22.5% substantially outpaced the industry median +2.1%, reflecting high growth capturing market activity.
※ Source: Company compilation
High growth and high profitability tied to market volatility: Revenue +22.5%, Operating Income +29.0%, Operating Margin 58.5% (improved +2.9pt). The ability to convert market activity into revenue and margin gains is notable. Future trading volume trends, new listing activity, and derivatives clearing balances will be keys to sustained growth.
Robust cash generation and high shareholder returns: OCF/Net Income 1.32x, Free Cash Flow ¥925.0B covering total returns ¥766.1B (dividends + buybacks) by 1.21x; Total Return Ratio 96.8% is extremely high. A high payout ratio 77.5% combined with flexible buybacks indicates a clear orientation toward capital efficiency with room to adjust returns depending on market conditions.
Caution on apparent financial metric distortion from clearing-related liabilities: Equity Ratio 0.5% and D/E ratio 199.2x arise from offset accounting for clearing-underwritten assets/liabilities and thus diverge from underlying credit risk. Interest expense ¥2.9B and interest coverage ~402x indicate very strong financial health; investors should understand the accounting structure when making investment decisions.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the firm from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.