| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥3345.2B | ¥2256.2B | +48.3% |
| Operating Income | ¥3002.6B | ¥1988.7B | +51.0% |
| Ordinary Income | ¥7536.9B | ¥7557.3B | -0.3% |
| Net Income | ¥2953.0B | ¥1806.3B | +63.5% |
| ROE | 6.9% | 5.0% | - |
For the fiscal year ended March 2026, Revenue (Ordinary Revenues) was ¥3345B (¥+1,089B YoY +48.3%) and Operating Income was ¥3,003B (¥+1,014B YoY +51.0%), achieving robust top-line and operating profit growth. Ordinary Income of ¥7,537B (¥-20B YoY -0.3%) was largely flat, while Net Income rose significantly to ¥2,953B (¥+1,147B YoY +63.5%). Top-line expansion was driven by solid growth in Domestic Insurance ¥8.16T and Overseas Insurance ¥3.52T, and improvements in investment income boosted operating-stage profits. At the ordinary income stage, realized securities gains ¥7,805B and trading gains ¥6,806B supported results, but structural adjustments in non-operating items left ordinary income essentially flat. At the net income stage, special losses of ¥425B (of which impairment ¥101B) were recorded, but a relative reduction in tax burden and improvement in underlying earnings contributed to the profit increase. Comprehensive income of ¥8,176B significantly exceeded net income, with valuation items improving capital: securities valuation differences ¥4,277B, deferred hedge gains/losses -¥764B, and pension-related adjustments ¥725B.
[Revenue] Ordinary revenues were ¥3,345B (YoY +48.3%), a large increase. Domestic insurance business ordinary revenues were ¥8.16T (69.8% of total), and overseas insurance business ¥3.52T (30.2%), with both segments driving growth. Domestically, premium and related income ¥5,109B and expanded investment income (interest/dividends received ¥1,027B; realized securities gains and trading gains, etc.) contributed. Overseas, the U.S. accounted for ¥2,111B and other regions ¥1,696B, maintaining a balanced geographic revenue mix. Investment-related gains included realized securities gains ¥7,805B, trading gains ¥6,806B, money trust gains ¥787B, and separate-account gains ¥1,258B; against an improved interest and market environment, investment income expanded to ¥3,735B (prior year ¥2,528B). On the other hand, investment expenses increased to ¥8,670B (prior year ¥8,422B) including realized securities losses ¥5,741B, derivative losses ¥951B, and interest swap losses ¥622B, but net investment accounting contributed to overall profit uplift. Insurance reserve provisioning (increase in policy reserves) was ¥1.81T (a large increase from prior year ¥341.9B), reflecting recognition in response to the insurance liability cycle.
[Profitability] Operating Income was ¥3,003B (YoY +51.0%), showing high growth, and the operating margin improved to 89.8% (prior year 88.2%). Operating expenses were ¥1.06T (prior year ¥912.1B), rising with scale, but higher investment income supported margins. Ordinary Income was ¥7,537B (YoY -0.3%), essentially flat, reflecting adjustments in non-operating expenses ¥3,754B (mainly elimination of dividends received from affiliates) and reclassification of financing costs; equity-method gains/losses ¥231B and FX gains/losses also played a role. Net Income rose to ¥2,953B (YoY +63.5%), supported by improved operating-stage earnings and a relative decline in income taxes — income before taxes was ¥6,261B and income taxes were ¥1,896B (effective tax rate 30.3%). Net special items were -¥200B (special gains ¥225B, special losses ¥425B), which compressed net income, but special loss reduction YoY (prior year ¥758B → current ¥425B) improved results. In conclusion, investment-income-led revenue and profit growth was achieved; ordinary-stage results were flat while net income rose sharply.
The Domestic Insurance business reported ordinary revenues ¥8.67T and segment profit ¥676.3B (margin 7.8%), confirming its position as the core business. External revenues ¥8.16T grew on both premium income and investment income, maintaining a stable earnings base including interest and dividend income ¥1,027B. The Overseas Insurance business posted ordinary revenues ¥3.56T and segment profit ¥112.6B (margin 3.2%), with ¥2,111B from the U.S. and ¥1,696B from other regions showing geographic diversification. Equity-method income from overseas affiliates ¥11.1B supported profits. Other businesses recorded ordinary revenues ¥471B and segment profit ¥340.2B with a high margin (72.3%), largely due to structural factors such as intra-group management services and dividends received. Adjustment amount -¥3,754B mainly reflects consolidation eliminations of dividends received from affiliates, reconciling segment profit total ¥1.13T to consolidated Ordinary Income ¥7,537B. Segment assets were ¥45.6T domestic, ¥28.0T overseas, and ¥4.5T other, aligning to consolidated total assets ¥74.2T after inter-segment eliminations, indicating a domestic-heavy asset base.
[Profitability] ROE was 6.9%; although historical comparative data is limited, the net profit margin 88.3% (Net Income ¥2,953B / Revenue ¥3,345B) and the insurance/investment-account structure produce very high levels. Operating margin 89.8% reflects expansion of investment income and accounting treatment of policy reserve provisioning, illustrating the business characteristics. Return on Assets (ROA) was 1.0%, demonstrating a leverage-based earnings model. [Cash Quality] Operating Cash Flow (OCF) was ¥7,922B; with Net Income ¥2,953B, OCF/Net Income multiple was 2.68x indicating high cash quality, and the accrual ratio -0.08 (OCF substantially exceeding Net Income) shows strong cash backing of earnings. [Investment Efficiency] Total asset turnover 0.0045x (Revenue ¥3,345B / Total Assets ¥74.2T) is very low reflecting insurance industry asset structure, but investment-account contributions complement capital efficiency. EPS was ¥119.83 (prior ¥123.72, -3.1%), BPS ¥1,181.36 (prior ¥988.61, +19.5%), indicating increased per-share value. [Financial Soundness] Equity Ratio improved to 5.7% (prior 5.2%); Debt-to-Equity multiple 16.4x indicates high leverage typical of the business, driven by insurance liabilities dominated by policy reserves ¥61.3T. Liquidity is ample with securities ¥55.6T and cash/deposits ¥1.97T. Goodwill ¥302.3B is minor at 7.1% of net assets ¥4.25T, limiting M&A premium burden. Deferred tax assets ¥125.2B and deferred tax liabilities ¥233.4B result in net deferred tax liability ¥108.2B, reflecting conservative tax position management.
Operating Cash Flow was ¥7,922B (prior ¥5,926B, +33.7%), a significant increase; after operating subtotal -¥6,503B, payments for income taxes ¥1,317B and interest payments ¥582B, substantial cash generation remained. Investing Cash Flow was -¥9,263B (prior -¥9,805B), a large outflow driven primarily by short-term securities purchases -¥1.85T and loans -¥1.02T, partially offset by short-term securities sales and loan repayments ¥1.16T and long-term loan recoveries ¥1.16T. Capital expenditures were -¥77.2B (CapEx/Depreciation 0.79x given depreciation ¥98.1B) reflecting restrained capex. M&A-related cash outflow PurchaseOfSubsidiariesStock was -¥233.8B, indicating ongoing growth investment. Financing Cash Flow was -¥127.2B, with share buybacks -¥107.6B and dividends paid -¥126.8B (consolidated basis) as shareholder returns, and bond issuance ¥185.9B offset by bond redemptions -¥111.7B for funding adjustments. Free Cash Flow (OCF + Investing CF) was -¥134.1B, negative due to upfront investment and M&A outflows, but manageable given OCF quality and asset liquidity. Cash and cash equivalents decreased to ¥2.09T (prior ¥2.31T, ¥-225.9B decrease), but liquidity on hand and capital markets access sustain funding capacity.
Operating Income of ¥3,003B versus Ordinary Income of ¥7,537B shows a large gap, reflecting insurance-industry-specific accounting (policy reserve provisioning ¥1.81T recognized in operating expenses while investment income is recognized at the ordinary income stage), and the substantial contribution of investment gains at the ordinary income stage. Investment income ¥3,735B was driven mainly by realized gains such as realized securities gains ¥7,805B and trading gains ¥6,806B—largely realized gains with a transient nature—but after offsetting investment expenses ¥8,670B, the net contribution remained positive, maintaining a structurally stable earnings model. Equity-method gains/losses ¥231B (prior ¥3.5B) reflect improved earnings at overseas affiliates and include recurring elements. Net special items were -¥200B (special gains ¥225B, special losses ¥425B), including impairment losses ¥101B and other special losses ¥71B; special losses narrowed from prior year ¥758B, indicating structural improvement. Comprehensive income ¥8,176B well exceeded net income ¥2,953B, with securities valuation differences ¥4,277B, deferred hedge gains/losses -¥764B, and pension adjustments ¥725B improving capital. OCF ¥7,922B was 2.68x Net Income ¥2,953B, with low accruals and very strong cash backing. Although reliance on investment accounting remains, diversification of the investment portfolio and asset management capabilities secure a stable earnings base.
Full Year guidance projects Ordinary Income ¥8,690B (YoY +15.3%), EPS ¥142.46, and Dividend ¥36.00. H1 actual Ordinary Income ¥7,537B represents 86.7% progress toward the full-year forecast; additional seasonality in premium income and further realized investment gains are expected in H2. Parent-company shareholders’ Net Income guidance is ¥5,130B; with H1 actual ¥2,953B (progress 57.6%), an incremental ¥2,177B is expected in H2, with tax burden management and control of special losses being key. Dividend guidance ¥36.00 (H1 DPS 54.5 — interim ¥24 + year-end ¥30.5; full year ¥36 reflects post-stock-split basis) is based on 1:4 stock split adjustment, maintaining a payout ratio of 29.5% at a conservative level. Achievement of guidance assumes stable investment environment and securing planned premiums in domestic and overseas insurance operations.
This period’s dividend was interim ¥24 + year-end ¥30.5, total ¥54.5 (pre 1:4 stock split basis as of April 2025), with total annual dividends of approximately ¥126.8B (as recorded in financing cash flow). The payout ratio relative to parent-company shareholders’ Net Income ¥2,953B is 29.5%, maintaining conservative levels and high sustainability. Share buybacks totaled ¥107.6B, bringing total shareholder returns to ¥234.4B and a total return ratio of 79.4%, balancing shareholder returns with capital efficiency improvements funded by earnings. OCF ¥7,922B more than covers dividends and buybacks totaling ¥234.4B, indicating robust return capacity from a cash-flow perspective. Dividend guidance ¥36.00 (full-year, post-split basis) aims to maintain prior-year levels, with payout ratio remaining around the ~30% range. CapEx/Depreciation ratio 0.79x reflects restrained capital spending; while FCF is negative due to investment and M&A front-loading, OCF quality and asset liquidity suggest limited concern for dividend sustainability. Share buybacks may be adjusted flexibly depending on market conditions and capital buffers.
Interest Rate / ALM Risk: With policy reserves ¥61.3T matched with long-duration assets such as bonds, duration matching is pursued, but rapid interest rate movements may produce valuation gains/losses and ALM mismatches, impacting Ordinary Income ¥7,537B and Comprehensive Income ¥8,176B. Management of interest rate sensitivity remains critical amid deferred hedge gains/losses -¥764B and ongoing valuation adjustments in comprehensive income.
Volatility of Investment Gains/Losses: Investment income ¥3,735B (including realized securities gains ¥7,805B and trading gains ¥6,806B) depends on market conditions; adverse market environments could reduce realizable gains and increase derivative losses (derivative losses ¥951B). While net contribution against investment expenses ¥8,670B has been stable, sustainability is influenced by market trends.
High-Leverage Structure: Debt-to-Equity multiple 16.4x reflects business characteristics but implies exposure; reliance on short-term funding (repo liabilities ¥1.83T) rollover and liquidity management affect capital discipline and ratings. Although Equity Ratio improved to 5.7%, fluctuations in comprehensive income or special loss recognition could pressure capital buffers.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 89.8% | 8.8% (4.0%–20.0%) | +80.9pt |
| Net Profit Margin | 88.3% | 4.3% (0.6%–11.3%) | +84.0pt |
Both operating margin and net profit margin substantially exceed industry medians, reflecting the contribution of investment accounts and structural accounting differences versus peers.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 48.3% | 2.1% (-4.5%–6.9%) | +46.2pt |
Revenue growth far outpaces the industry median, driven by expansion in both domestic and overseas businesses and improved investment income.
※ Source: Company compilation
Confirmed an investment-income-led stable earnings base and high-quality cash generation. OCF ¥7,922B and OCF/Net Income 2.68x indicate very strong cash backing of earnings; payout ratio 29.5% and total return ratio 79.4% demonstrate ample shareholder return capacity. Comprehensive income ¥8,176B and improved valuation capital increased BPS to ¥1,181.36 (prior ¥988.61, +19.5%), showing clear per-share value improvement.
High-leverage structure (D/E 16.4x) is characteristic of the industry, but interest rate and market sensitivity management (ALM/hedging) is key to preserving shareholder value. Deferred hedge gains/losses -¥764B and derivative losses ¥951B show remaining valuation volatility; however, liquidity (securities ¥55.6T, cash/deposits ¥1.97T) and capital market access limit funding risk. Goodwill ¥302.3B is small at 7.1% of net assets, containing M&A premium burden.
This report is an AI-generated financial analysis document based on XBRL financial statement data. It does not constitute an investment recommendation for any specific security. Industry benchmarks are reference information compiled by our firm from publicly disclosed financial statements. Investment decisions are your responsibility; consult a professional advisor as appropriate before making investment decisions.