| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥836.1B | ¥738.1B | +13.3% |
| Operating Income / Operating Profit | ¥53.0B | ¥9.8B | +439.1% |
| Profit Before Tax | ¥157.6B | -¥46.3B | +440.6% |
| Net Income / Net Profit | ¥106.4B | -¥72.0B | +498.3% |
| ROE | 8.2% | -5.7% | - |
For the fiscal year ended March 2026, Revenue (Net Sales) was ¥836.1B (YoY +¥98.0B, +13.3%), Operating Income was ¥53.0B (YoY +¥43.2B, +439.1%), Ordinary Income was ¥53.5B (YoY +¥46.9B, +695.6%), and Net Income was ¥106.4B (YoY +¥178.3B, +498.3%). Fee income from the Securities Business and a favorable interest-rate environment drove top-line growth. The SG&A ratio improved to 77.3% (down 5.8ppt from 83.1% a year earlier), reflecting materially improved cost efficiency. The uplift from Ordinary Income to Profit Before Tax was large, with equity-method investment income of ¥29.6B and net financial income (interest & dividends received ¥318.3B – interest paid ¥92.4B) making notable contributions. After swinging from a large loss in the prior year, the company delivered substantial increases across all four key profit metrics, indicating qualitative improvements in earning power and revenue structure.
[Revenue] Operating revenue reached ¥836.1B (YoY +13.3%), achieving double-digit growth. External sales in the Securities Business were ¥544.6B (+4.9%), showing stable growth, while the Crypto Asset Business reported ¥175.9B (+9.7%), benefiting from a recovery in crypto markets. The Asset Management & Wealth Management (AM/WM) Business expanded significantly to ¥77.4B (+123.0%), supported by asset accumulation and higher fee income. The Investment Business turned positive to ¥1.9B from a prior-year loss. Financial income rose to ¥286.9B (+11.8% YoY), as interest and dividend income expanded in the rising-rate environment. Revenue-type income (exchange/fund management fees, etc.) of ¥27.5B was newly recorded, advancing revenue diversification.
[Profitability] Operating Income of ¥53.0B (YoY +439.1%) was achieved despite a significant increase in cost of sales to ¥18.0B (from ¥0.2B the prior year); the improvement in the SG&A ratio was a major contributor. SG&A was ¥646.3B (+5.4%), below the revenue growth rate, indicating positive operating leverage. Equity-method investment income of ¥29.6B (+52.5%) boosted pre-tax profits, driving Ordinary Income to ¥53.5B (+695.6%). Other income/expenses swung to a net gain of ¥43.2B (prior year net loss -¥122.2B), reflecting a reversal of prior-year other charges of ¥154.9B (primarily stock compensation expense of ¥137.1B). From Profit Before Tax of ¥157.6B, corporate tax, etc. of ¥51.1B were deducted, resulting in Net Income of ¥106.4B (+498.3%). After adjusting for non-controlling interest loss of -¥2.7B, Net Income attributable to owners of the parent was ¥109.1B (+315.4%). In conclusion, revenue growth and substantial profit recovery drove a marked restoration of earning power.
The Securities Business was the largest contributor with Profit Before Tax of ¥117.2B (YoY +9.4%), recording external sales of ¥544.6B, financial costs of ¥77.4B, depreciation of ¥35.3B, and SG&A of ¥347.2B. Stable broker revenues and interest income provided support, and equity-method investment income of ¥19.8B also contributed. The Crypto Asset Business narrowed its pre-tax loss to -¥5.4B (prior year -¥129.5B), with external sales of ¥175.9B and SG&A of ¥159.6B—revenue growth outpaced cost increases. The AM/WM Business achieved a large increase in Profit Before Tax to ¥61.4B (prior year ¥2.8B), supported by external sales of ¥77.4B (+123.0%) and equity-method investment income of ¥8.6B, while SG&A was restrained at ¥45.5B. The Investment Business turned to a pre-tax profit of ¥1.8B (prior year -¥7.0B), with equity-method investment income of ¥1.6B contributing. High profitability in Securities and AM/WM led the improvement in consolidated earning power, while the reduction in Crypto losses also contributed.
[Profitability] The Operating Margin improved materially to 6.3% (up 5.0ppt from 1.3% a year earlier), driven by SG&A ratio improvement and top-line growth. ROE recovered to 8.7% (prior year -4.0%) following the return to net income, though there remains room for improvement relative to the company’s cost of capital. EBITDA margin reached 12.3% (Operating Income ¥53.0B + depreciation ¥50.1B = ¥103.1B / Revenue ¥836.1B), confirming enhanced cash-generation capacity. [Cash Quality] Operating Cash Flow (OCF) of ¥178.1B / Net Income ¥106.4B = 1.67x indicates solid cash backing of earnings, and the accrual ratio of -0.9% (change in working capital/total assets) was kept low. [Investment Efficiency] Total asset turnover was 0.11x (Revenue ¥836.1B / year-end total assets ¥7,467.7B), characteristic of financial firms and roughly flat, while financial leverage of 5.75x (total assets / equity) is a contributor to the high ROE. [Financial Soundness] Equity Ratio was 16.9% (down 0.6ppt from 17.5% prior year); leverage remains high but within acceptable ranges for financial firms. D/E ratio was 4.75x (corporate bonds & borrowings ¥577.3B + securities-backed borrowings ¥544.7B = ¥1,122.0B / equity ¥1,299.7B excluding non-controlling interests ¥3.6B), indicating heavy reliance on short-term liabilities. Interest Coverage (EBITDA / interest paid) was 1.1x and low, although interest & dividend income of ¥318.3B supports net financial income, making a simple gross-base assessment less applicable.
OCF was strong at ¥178.1B (YoY +33.9%). Starting from Profit Before Tax ¥157.6B, non-cash expenses (depreciation ¥50.1B, stock compensation expense ¥17.0B) and working capital changes were adjusted, resulting in a subtotal of -¥17.7B, followed by interest & dividends received ¥318.3B, interest paid -¥92.4B, and corporate taxes paid -¥30.1B to reach the final figure. Customer deposits increased by ¥281.0B and short-term pledged cash decreased by -¥21.1B, which boosted OCF, while net movements related to securities-backed financing of -¥17.3B were a restraining factor. Investing Cash Flow was -¥145.7B, primarily due to intangible asset acquisitions -¥44.5B (mainly software investments), acquisitions of affiliates -¥158.5B (new/additional investments), and proceeds from sale of securities +¥85.1B. Tangible fixed asset investment was -¥5.3B and small relative to depreciation of ¥50.1B. Free Cash Flow (FCF) was positive at ¥32.4B (OCF ¥178.1B + investing CF -¥145.7B), while Financing Cash Flow was -¥50.1B, composed of dividends paid -¥102.0B, share buybacks -¥10.4B, bond issuance +¥64.9B, borrowings raised +¥129.1B, and net increase in short-term borrowings +¥34.3B. Total shareholder distributions of ¥112.4B materially exceeded FCF ¥32.4B, indicating that dividends and buybacks were financed through borrowings and bond issuance. Cash and cash equivalents were ¥527.9B (prior year ¥534.7B, -¥6.8B), effectively flat and stable when accounting for foreign exchange impact of +¥10.9B.
Of Operating Revenue ¥836.1B, Financial Income was ¥286.9B and Revenue-type income ¥27.5B, with securities and asset management fees forming the core of recurring earnings. Equity-method investment income of ¥29.6B is a recurring item but subject to variability from affiliate performance. Other income/expenses produced a net gain of ¥43.2B, a marked improvement from last year’s net loss of -¥122.2B, primarily due to the reversal of prior-year stock compensation expense of ¥137.1B (listing-related). Stock compensation expense in the current period was ¥17.0B, returning to normal levels, and the decline in one-off costs materially lifted Profit Before Tax. The core of non-operating income was interest & dividends received of ¥318.3B, which—while sensitive to the interest-rate environment—tends to be recurring. OCF outpaced Net Income by a wide margin and the accrual ratio remained low, indicating cash generation is preceding accounting accruals—a healthy profile. Comprehensive income of ¥146.9B versus Net Income ¥106.4B (difference ¥40.5B) was mainly due to foreign currency translation adjustments of ¥25.7B and OCI share of equity-method affiliates ¥16.5B, reflecting asset valuation movements. The ¥104.1B difference between Ordinary Income and Profit Before Tax is attributable to equity-method investment income and other income/expenses; the ¥51.4B difference between Profit Before Tax and Net Income is explained by corporate tax, etc. of ¥51.1B, with no particular abnormal items.
Annual dividend was ¥30.7 per share (interim ¥15.3, year-end ¥15.4). The year-end dividend composition was ordinary dividend ¥15.2 + special dividend ¥10.0. The payout ratio was 70.7% (total dividends ¥102.4B / Net Income attributable to owners of the parent ¥109.1B), consistent with the shareholder return policy of a floor of ¥30 per year + 50% of profits. The company repurchased ¥10.4B of its own shares, bringing total shareholder returns to ¥112.8B (dividends ¥102.4B + buybacks ¥10.4B), and the Total Return Ratio was 103.4%, exceeding 100%. Total returns were 3.5x FCF ¥32.4B, meaning dividends and buybacks could not be covered solely by internally generated funds and were financed through borrowings and bond issuance. Next fiscal year’s dividend forecast is ¥15.4 (only year-end disclosed due to full-year non-disclosure), suggesting continuation of the floor policy. Dividend sustainability will depend on FCF and business performance and may be revisited if interest rates or market volatility change.
Market Environment Volatility Risk: Revenue from the Securities Business ¥544.6B and Crypto ¥175.9B is highly sensitive to market volatility; sharp moves in equity trading volumes, FX, or crypto prices can materially affect earnings. Of Financial Income ¥286.9B, interest & dividends received ¥318.3B depend on interest-rate levels; in a rate-cutting environment net financial income could shrink and compress Profit Before Tax.
Dependence on Short-Term Liabilities Risk: Large reliance on short-term liabilities such as customer deposits ¥3,139.5B and securities-backed borrowings ¥544.7B creates rollover and liquidity tightening risks during market stress. High leverage (D/E ratio 4.75x) exacerbates vulnerability. Gross Interest Coverage of 1.1x is low and the burden of interest payments ¥92.4B is significant.
Sustainability of Shareholder Returns Risk: With a Total Return Ratio of 103.4% and total returns far exceeding FCF ¥32.4B, the current level of dividends and buybacks may be hard to sustain. Under the dividend-floor policy, payout ratios could remain elevated during earnings weakness. Going forward, the company may need to rebalance returns and growth investments if market conditions deteriorate or investment opportunities expand.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 8.7% | 8.0% (2.9%–10.0%) | +0.7pt |
| Operating Margin | 6.3% | 19.9% (6.5%–38.3%) | -13.6pt |
| Net Profit Margin | 12.7% | 5.6% (3.8%–22.2%) | +7.1pt |
ROE slightly exceeds the industry median and Net Profit Margin is substantially higher, but Operating Margin is well below the median. The contribution of Financial Income elevates Net Profit Margin, while a high SG&A ratio of 77.3% suppresses Operating Margin.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 13.3% | -0.5% (-0.9%–13.1%) | +13.8pt |
Revenue growth materially outperformed the industry median, driven by combined growth in Securities, Crypto, and AM/WM.
※ Source: Company compilation
Improvements in Financial Income and SG&A ratio drove margin improvement, with ROE recovering to 8.7% year-on-year. Stable revenues from the Securities Business and high growth in AM/WM diversified the revenue structure, and narrowing Crypto losses also contributed. As long as the favorable interest-rate environment persists, net financial income is likely to continue supporting Profit Before Tax.
The company executed shareholder returns with a Total Return Ratio of 103.4% and distributions well above FCF, maintaining a high-return stance under the dividend-floor policy. However, sustainability depends on FCF generation and business performance; going forward, the balance between returns and investment opportunities in different market conditions should be monitored.
This report is an AI-generated earnings analysis document based on XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your own responsibility; please consult a professional advisor as necessary.