Cocorport,Inc. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥1.75B
• Operating Income: ¥237M
• Net Income: ¥168M
• EPS: ¥45.46

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Verdict: FY2026 Q1 was a solid top-line quarter with resilient bottom-line, but clear margin compression and negative operating leverage emerged. Revenue grew 10.6% YoY to 17.51, outpacing profit growth. Operating income inched up 0.3% YoY to 2.37, and ordinary income rose 3.6% YoY to 2.45, while net income increased 4.0% YoY to 1.68. The operating margin declined to 13.5% (2.37/17.51) from roughly 14.9% a year ago, implying about 140 bps compression. The net margin dipped to 9.6% from roughly 10.2% a year ago, implying about 60 bps compression. Ordinary income margin also compressed about 90 bps YoY to 14.0%. Gross profit margin printed at 28.1%, and SG&A at 2.56 implies limited cost flexibility in the quarter. The mix of growth (+10.6% revenue) vs. flat operating income (+0.3%) indicates negative operating leverage, likely from higher personnel and facility-related costs to support expansion. ROE was 5.7% on low leverage (assets/equity 1.27x) and moderate asset turnover (0.469x), with margin deterioration the main drag. Liquidity remains excellent with a current ratio of 426% and cash/deposits of 17.28 versus current liabilities of 7.12. Debt load is light (D/E 0.32x) and interest coverage is extremely high due to negligible interest expense. Cash flow data were not disclosed, so earnings quality (OCF conversion) cannot be confirmed this quarter. The payout ratio (calculated) of 103.9% suggests potential stress if sustained, though dividend data are not disclosed and the calculation basis may not be comparable. Looking forward, sustaining double-digit sales growth while stabilizing SG&A intensity will be key to re-expanding margins and ROE; the strong balance sheet provides flexibility to invest, but cash generation evidence is needed to support dividends and growth capex.

Profitability Analysis

ROE decomposition (DuPont): ROE 5.7% = Net Profit Margin 9.6% × Asset Turnover 0.469 × Financial Leverage 1.27x. The largest change driver YoY appears to be net margin, which compressed by ~60 bps (estimated), while leverage stayed low and asset turnover was broadly stable for a services model. Business reason: revenue expanded (+10.6%) but operating income was flat (+0.3%), implying cost inflation and/or upfront hiring and facility costs outpaced productivity gains, compressing operating and ultimately net margins. Sustainability: margin pressure may be transitory if tied to expansion and staffing ramps; however, if wage inflation and occupancy costs persist, lower margins could endure. Watch for SG&A growth exceeding revenue growth; the quarter’s pattern implies SG&A intensity rose, a concerning trend if repeated. Operating leverage turned negative in Q1; to restore ROE, management needs to recapture operating margin through utilization gains, pricing, or cost discipline.

Growth Assessment

Revenue growth of 10.6% YoY to 17.51 indicates healthy demand and potential network expansion. Profit growth lagged materially (OP +0.3% YoY; NI +4.0%), signaling growth investment or cost inflation. Gross profit margin at 28.1% suggests modest value-add after service delivery costs; sustaining double-digit revenue growth without further margin dilution will be the challenge. Non-operating contributions were immaterial (non-op income ratio 0.4%), indicating core operations drove results. ROIC is reported at 13.4%, comfortably above the 8% excellence benchmark, supportive of value creation if sustained. Outlook: near-term growth likely remains positive given topline momentum, but margin trajectory is uncertain; stabilization hinges on headcount productivity, occupancy/center utilization, and wage management. Absent OCF disclosure, we cannot validate growth quality via cash conversion.

Financial Health

Liquidity is strong: current ratio 426.3% and quick ratio 426.3%, with current assets of 30.34 vs current liabilities of 7.12. No warning on current ratio (<1.0) or D/E (>2.0); D/E is a conservative 0.32x. Cash and deposits of 17.28 exceed all noncurrent liabilities (2.30) and cover 2.4x current liabilities, minimizing near-term refinancing risk. Maturity mismatch risk appears low given the large cushion of liquid assets versus short-term obligations. Interest-bearing debt details are unreported, but interest expense is effectively zero, consistent with low leverage. Off-balance sheet obligations are not disclosed; if the business uses leased facilities extensively, lease commitments may exist but are not quantifiable here.

Cash Flow Quality

Operating cash flow, capex, and free cash flow were not disclosed, so OCF/Net Income and FCF coverage cannot be assessed this quarter. Accordingly, we cannot test the OCF/NI quality threshold (>1.0) nor identify working-capital-driven earnings volatility. Accounts receivable of 11.59 relative to quarterly revenue of 17.51 suggests meaningful receivable intensity typical of service reimbursement cycles; collection efficiency and DSOs should be monitored for cash conversion risk. With dividends and capex undisclosed, FCF sustainability for shareholder returns and growth investment cannot be validated. No clear signs of working capital manipulation can be inferred from the limited data.

Dividend Sustainability

Dividend per share and total dividends were not disclosed. The calculated payout ratio stands at 103.9%, which, if based on comparable earnings and actual dividends, would be above the sustainable benchmark (<60%) and a caution flag. However, given the lack of DPS disclosure and unknown calculation basis, this ratio may reflect timing or methodology differences (e.g., annualized EPS vs. last fiscal DPS). Without OCF/FCF data, we cannot confirm cash coverage of dividends. Policy outlook: prudence would favor aligning payouts with demonstrated FCF after growth capex; confirmation awaits management guidance and cash flow disclosure.

Risk Assessment

Business Risks:

• Margin pressure from wage inflation and staffing ramp ahead of utilization.
• Facility/occupancy cost increases as the network expands.
• Pricing power limits in a regulated or semi-regulated service environment (industry-specific: welfare/employment support services often face reimbursement constraints).
• Execution risk in scaling centers while maintaining quality and outcomes.

Financial Risks:

• Potential dividend strain if the >100% payout ratio persists without strong FCF.
• Receivable collection risk given AR of 11.59 vs quarterly revenue of 17.51.
• Data limitations on debt composition and lease obligations may mask fixed-charge commitments.
• Sensitivity to any change in public funding/payment terms if applicable.

Key Concerns:

• Negative operating leverage: revenue +10.6% vs operating income +0.3%.
• Operating and net margin compression (OPM down ~140 bps; NPM down ~60 bps YoY, estimated).
• Lack of OCF/FCF disclosure prevents validating earnings quality and dividend capacity.

Investment Implications

Key Takeaways:

• Top-line growth robust at +10.6% YoY; profit growth lagged materially.
• Margins compressed (OPM ~13.5%, down ~140 bps YoY), indicating cost pressure.
• ROE 5.7% constrained by lower margins and low leverage; ROIC a strong 13.4%.
• Balance sheet very strong (current ratio 426%, D/E 0.32x, ample cash).
• Non-operating items immaterial; earnings are core-operation driven.
• Cash flow disclosure absent; dividend sustainability uncertain with calculated payout >100%.

Metrics to Watch:

• Operating margin and SG&A-to-sales ratio trajectory.
• OCF/Net Income and Free Cash Flow once disclosed.
• Accounts receivable days and collection trends.
• Center utilization per site and headcount productivity.
• Wage inflation vs. pricing/reimbursement adjustments.
• Capex per new site and payback periods.

Relative Positioning: Within domestic service peers, the company shows superior balance sheet strength and attractive ROIC, but currently weaker operating leverage and margin momentum; near-term performance hinges on converting growth into margin expansion and confirming cash generation.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis