Nippon Television Holdings,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥234.48B
• Operating Income: ¥33.21B
• Net Income: ¥17.96B
• EPS: ¥105.66

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

Nippon Television Holdings reported solid FY2026 Q2 consolidated results under JGAAP, with topline and profit growth indicating strong operating leverage. Revenue increased 8.1% year on year to ¥234.5bn, while operating income rose 57.1% to ¥33.2bn, showing significant margin expansion. Net income grew 65.3% to ¥26.4bn, and EPS reached ¥105.66, supported by robust underlying operations and favorable non-operating items. Gross profit was ¥72.9bn, implying a gross margin of 31.1%, while the operating margin was approximately 14.2%, a notable uplift versus revenue growth. Ordinary income exceeded operating income by about ¥6.6bn, consistent with positive non-operating contributions (e.g., investment-related income), as interest expense was minimal at ¥0.13bn. The effective tax burden, based on disclosed income tax expense and net income, was approximately 26–27%, despite the provided “effective tax rate” metric showing 0.0% (cash flow and some metrics were undisclosed). On the balance sheet, total assets stood at ¥1.262tn and total equity at ¥1.019tn, implying an equity ratio near 80.8% (the reported 0% equity ratio is a placeholder due to non-disclosure). Liabilities were modest at ¥241.1bn, resulting in a low debt-to-equity proxy of 0.24x and very strong interest coverage of roughly 250x. Liquidity appears ample with a current ratio of 296.6% and working capital of ¥233.2bn, supported by low inventories relative to current assets. DuPont analysis indicates an ROE of 2.59%, driven by an 11.26% net margin, low asset turnover of 0.186, and modest financial leverage of 1.24x. The low leverage and large asset base temper ROE, even as profitability improves. Cash flow data (OCF/FCF) were not disclosed in this filing set, limiting assessment of cash conversion and dividend coverage. Dividend per share and share count were also not disclosed here; thus, payout analysis relies on earnings capacity rather than reported distributions. Overall, the earnings quality appears supported by stronger operating performance and conservative capital structure, but the absence of cash flow disclosures warrants monitoring.

Profitability Analysis

ROE_decomposition: Reported ROE is 2.59%, consistent with DuPont components: Net margin 11.26% × Asset turnover 0.186 × Financial leverage 1.24. This implies ROA of ~2.09% and modest leverage amplification. The low asset turnover reflects a sizable asset base relative to revenue, which dampens ROE despite improved margins. margin_quality: Gross margin was 31.1% (¥72.9bn/¥234.5bn). Operating margin improved to ~14.2% (¥33.2bn/¥234.5bn), outpacing revenue growth and pointing to operating cost discipline and/or favorable sales mix (e.g., higher-margin content/rights or events/other segments). Net margin of 11.26% benefited from positive non-operating income (ordinary income of ¥39.8bn vs operating income of ¥33.2bn) and a normalizing tax load (~26–27% by our calculation). operating_leverage: Operating income grew 57.1% on 8.1% revenue growth, signaling strong operating leverage—fixed-cost absorption and cost optimization likely contributed. Interest expense was only ¥0.13bn, so financial leverage did not drive the profit delta; the improvement is primarily operational and non-operational gains.

Growth Assessment

revenue_sustainability: Topline growth of 8.1% suggests steady demand recovery across broadcasting and content-related activities. The sustainability will depend on advertising market conditions, content monetization (including rights and digital), and events/ancillary revenue resilience. profit_quality: The bulk of profit improvement stems from operating performance (higher operating margin), supplemented by non-operating gains (ordinary income > operating income by ~¥6.6bn). Minimal interest expense indicates results are not reliant on financial engineering. Tax expense of ¥9.47bn implies a normalized effective rate (~26–27%), supporting quality of earnings. outlook: If revenue momentum continues and cost discipline holds, operating leverage can persist into the second half. Key swing factors include ad demand, programming costs, sports/event rights amortization, and digital distribution economics. The very strong balance sheet provides flexibility to invest in content and platforms to support medium-term growth.

Financial Health

liquidity: Current ratio 296.6% and quick ratio 292.3% indicate substantial short-term liquidity. Working capital is ¥233.2bn (CA ¥351.8bn – CL ¥118.6bn). Cash and equivalents were not disclosed in this dataset, but overall current asset coverage is robust. solvency: Total liabilities of ¥241.1bn against total equity of ¥1.019tn imply a conservative capital structure (liabilities/assets ~19.1%). Interest coverage is ~250x (operating income/interest expense), underscoring negligible financial strain. capital_structure: Implied equity ratio is about 80.8% (¥1.019tn/¥1.262tn), far above typical thresholds for balance sheet strength. Financial leverage at 1.24x (DuPont) is low, reflecting equity-heavy funding and limited debt reliance.

Cash Flow Quality

earnings_quality: Earnings appear supported by core operations (operating margin expansion) and stable tax expense. However, the absence of disclosed operating cash flow prevents validation of cash conversion and accrual intensity. FCF_analysis: Free cash flow was not reported (both OCF and investing CF undisclosed). As such, we cannot assess capex intensity, working capital investment, or FCF yield for the period. working_capital: Reported working capital of ¥233.2bn and low inventories (¥5.16bn) suggest limited inventory risk in the model. Receivables and other current assets mix are not provided here, so Days Sales Outstanding and cash collection cannot be evaluated.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio were not disclosed (DPS and payout shown as 0.0% are placeholders). With EPS at ¥105.66 and low leverage, capacity for distributions appears supported by earnings; however, a formal payout ratio cannot be computed from provided data. FCF_coverage: Not assessable due to undisclosed operating and investing cash flows. Coverage analysis should be revisited once cash flow statements are available. policy_outlook: Given strong balance sheet metrics and improved profitability, the company has flexibility to maintain or enhance shareholder returns, subject to cash flow performance and investment needs in content and digital platforms.

Risk Assessment

Business Risks:

• Advertising market cyclicality affecting broadcasting revenues
• Content cost inflation and variability in programming/event rights amortization
• Execution risk in digital/streaming monetization and platform partnerships
• Audience fragmentation and competitive pressures from OTT and social platforms
• Event-related revenue volatility tied to scheduling and attendance

Financial Risks:

• Cash flow visibility is limited due to undisclosed OCF/FCF in this period
• Potential investment needs for content and technology that could lift capex
• Non-operating income volatility affecting ordinary income vs operating income

Key Concerns:

• Lack of cash flow disclosure precludes assessment of cash conversion and dividend coverage
• Low asset turnover (0.186) constrains ROE despite margin improvements
• Dependence on advertising and hit-driven content introduces earnings variability

Investment Implications

Key Takeaways:

• Revenue up 8.1% YoY with outsized operating income growth of 57.1%, indicating strong operating leverage
• Net margin of 11.26% and ordinary income ahead of operating income reflect solid non-operating contributions
• Very strong balance sheet with implied equity ratio ~80.8% and interest coverage ~250x
• ROE of 2.59% remains modest due to low asset turnover and low financial leverage
• Cash flow and dividend data not disclosed, limiting payout and FCF assessment

Metrics to Watch:

• Operating cash flow and free cash flow once disclosed
• Advertising revenue trends and pricing/yield into H2
• Content spending and rights amortization impact on margins
• Non-operating income sustainability (equity-method income, investment gains)
• Asset turnover improvements via revenue growth or asset optimization

Relative Positioning: Within Japan’s terrestrial broadcasting and media group peer set, the company exhibits stronger-than-typical balance sheet conservatism and improved margin momentum this half; however, structural headwinds to ad-driven models and low asset turnover keep ROE comparatively subdued.

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