| Indicator | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥2543.9B | ¥2380.4B | +6.9% |
| Operating Income | ¥231.9B | ¥131.2B | +76.8% |
| Ordinary Income | ¥311.6B | ¥196.4B | +58.7% |
| Net Income | ¥275.8B | ¥195.3B | +41.2% |
| ROE | 5.9% | 4.4% | - |
FY2026 Q3 cumulative results recorded Revenue ¥2,543.9B (YoY +163.5B +6.9%), Operating Income ¥231.9B (YoY +100.7B +76.8%), Ordinary Income ¥311.6B (YoY +115.2B +58.7%), and Net Income attributable to owners of the parent ¥275.8B (YoY +80.5B +41.2%), achieving both revenue and profit growth. The substantial increase in Operating Income was driven by maintained gross margin and operating leverage; Cost of Sales ratio was kept at 68.5% while SG&A ratio was constrained to 22.4%, contributing to the improvement.
[Revenue] External customer revenue increased by ¥163.5B YoY (+6.9%) to ¥2,543.9B. By segment, the Television Broadcasting Business recorded ¥1,844.7B (YoY +124.5B +7.2%), accounting for 72.5% of total revenue as the core business, the Internet Business achieved high growth at ¥243.8B (YoY +40.8B +20.0%), the Shopping Business declined to ¥139.6B (YoY -14.0B -9.1%), and Other Businesses increased modestly to ¥315.8B (YoY +12.2B +4.0%).
[Profit & Loss] Gross profit was ¥802.3B, maintaining a gross margin of 31.5%. SG&A totaled ¥570.4B (SG&A ratio 22.4%) and increased YoY, but operating leverage from higher sales led Operating Income to rise 76.8% to ¥231.9B (Operating Margin 9.1%). In non-operating items, equity-method investment income of ¥62.0B contributed significantly, and dividend income received of ¥13.9B was also recorded, bringing Ordinary Income to ¥311.6B. A special gain of ¥70.0B from sale of investment securities was recorded, resulting in Profit Before Tax of ¥383.2B. After recording income taxes of ¥107.4B, Net Income attributable to owners of the parent amounted to ¥275.8B, a YoY increase of +41.2%. The gap between Ordinary Income and Net Income is mainly due to special gains of ¥71.6B (primarily sale of investment securities), indicating one-off factors boosted profit. In conclusion, the pattern of revenue and profit growth was driven by higher revenues in Television Broadcasting and Internet businesses plus equity-method income and gains on sale of investment securities.
The Television Broadcasting Business reported Revenue ¥187.0B (External customer revenue ¥184.47B) and Operating Income ¥169.4B, with a margin of 9.1%, constituting 72.5% of company revenue and serving as the core business. Segment profit rose substantially from ¥67.0B in the prior year period to ¥169.4B. The Internet Business reported Revenue ¥259.3B (External customer revenue ¥243.8B) and Operating Income ¥36.9B, with a margin of 14.2%, demonstrating high profitability and a 77.9% increase from ¥20.8B in the prior year period. The Shopping Business reported Revenue ¥139.9B (External customer revenue ¥139.6B) and Operating Income ¥7.9B, with a margin of 5.7%, down from ¥11.8B in the prior year period. Other Businesses reported Revenue ¥387.1B (External customer revenue ¥315.8B) and Operating Income ¥17.9B, with a margin of 4.6%, a 44.7% decline from ¥32.4B in the prior year period. Differences in segment margins are clear: the Internet Business leads at 14.2%, followed by Television Broadcasting at 9.1%, while Shopping and Other Businesses remain in the 5% range, highlighting profitability disparities across the business portfolio.
[Profitability] ROE 5.9% (roughly flat vs. prior year), Operating Margin 9.1% (improved +3.6pt from 5.5% prior year), Net Income Margin 10.8% (improved +2.6pt from 8.2% prior year). [Cash Quality] Cash and deposits ¥158.1B (down -58.1% from ¥377.7B prior year), together with current investment securities ¥530.0B, yielded liquidity on hand of ¥688.1B, providing coverage of short-term liabilities of ¥790.7B at 0.87x. [Investment Efficiency] Total Asset Turnover 0.441x (annualized) below industry median of 0.67x. [Financial Soundness] Equity Ratio 81.0% (improved +1.0pt from 80.0% prior year), Current Ratio 235.3%, and Debt-to-Equity ratio 0.23x, maintaining a conservative financial structure.
Cash and deposits decreased from ¥377.7B in the prior year period to ¥158.1B, a decline of ¥219.6B (-58.1%), indicating notable cash outflows. At the same time, current investment securities of ¥530.0B are held, yielding total liquid assets of ¥688.1B. Analysis of the balance sheet movement shows Accounts Receivable and Notes Receivable increased to ¥925.0B, confirming an expansion of working capital. Inventories also rose to ¥131.4B (up +30.8% from ¥100.5B prior year), and the inventory buildup has worsened working capital, pressuring cash. Investment securities remain high at ¥2,180.9B, and a sale of investment securities producing ¥70.0B in special gains suggests partial monetization of investments occurred. In financing activities, dividend payments and share buybacks may have been executed, contributing to the cash decrease. Cash coverage of short-term debt is 0.2x (cash only), liquidity assets coverage is 0.87x, and overall current assets provide 2.35x coverage, indicating sufficient liquidity on a total-current-assets basis.
Compared with Ordinary Income of ¥311.6B, Operating Income was ¥231.9B, implying non-operating net additions of approximately ¥79.7B. The breakdown is led by equity-method investment income ¥62.0B, dividend income received ¥13.9B, and other non-operating income ¥5.4B. Total non-operating income of ¥81.3B represents 3.2% of Revenue ¥2,543.9B, indicating a certain degree of reliance on non-operating revenue. Additionally, special gains of ¥70.0B from sale of investment securities were recorded, contributing 18.3% to Profit Before Tax of ¥383.2B. Equity-method income and gains on sale of investment securities are non-recurring factors dependent on market conditions and investee performance, so attention should be paid to the structural sustainability of Ordinary Income. Operating Income itself improved substantially YoY (+76.8%), confirming improved core business profitability, although final profit quality is affected by one-off items.
Progress against full-year forecasts is: Revenue 75.7% (¥2,543.9B / ¥3,360.0B), Operating Income 96.6% (¥231.9B / ¥240.0B), Ordinary Income 97.4% (¥311.6B / ¥320.0B), Net Income 98.5% (¥275.8B / ¥280.0B). Against a standard Q3 cumulative progress rate of 75%, Operating Income and Ordinary Income are ahead by 21.6 and 22.4 percentage points respectively, indicating performance is running well ahead of the full-year forecast. This is likely attributable to the ¥70.0B gain from sale of investment securities recorded by Q3 and solid equity-method income. Revenue progress of 75.7% is standard, leaving ¥816.1B of Revenue needed in Q4. Operating Income has already reached 96.6% of the full-year forecast, so if only modest additional profits are recorded in Q4, there is a high probability of exceeding the full-year Operating Income forecast. However, the reproducibility of one-off items (gain on sale of investment securities) is uncertain, and final full-year results may vary depending on Q4 performance.
Annual dividend forecast is ¥40 per share (interim ¥20, year-end ¥20), unchanged from prior year ¥40. Forecast EPS is ¥277.90, implying a Payout Ratio of 14.4%, a very conservative level. Based on issued shares of 108,529 thousand less treasury shares of 7,990 thousand, the year-end shares outstanding basis is 100,539 thousand shares, yielding an estimated total annual dividend of approximately ¥4.02B. Payout Ratio relative to Net Income ¥275.8B is 14.6%, indicating a policy to retain earnings. No disclosure of share buybacks is included in this financial results release, so Total Return Ratio is not calculated. Given the low Payout Ratio and a strong Equity Ratio of 81.0%, dividend continuity is assessed as sustainable.
As a cyclical risk of the advertising market, the Television Broadcasting Business accounts for 72.5% of company revenue, so deterioration in advertisers’ business conditions or cuts in advertising spend would directly affect performance. As a working capital deterioration risk, Days Sales Outstanding of 133 days (well above industry median 61 days) and inventory increase YoY +30.8% reduce working capital efficiency and constrain cash generation. As a market risk on investment securities, the company holds investment securities of ¥2,180.9B (46.7% of Net Assets ¥4,672.2B), raising concerns about valuation losses or losses on sale in the event of market deterioration.
[Industry Position] (Reference information — Company analysis)
Profitability: Operating Margin 9.1% slightly exceeds industry median 8.2%, and Net Income Margin 10.8% substantially exceeds industry median 6.0%. ROE 5.9% is 2.4pt below industry median 8.3%, indicating relatively low capital efficiency within the industry.
Efficiency: Total Asset Turnover 0.441x is well below industry median 0.67x, highlighting low asset efficiency. Days Sales Outstanding 133 days is more than double industry median 61 days, and long collection periods pressure working capital efficiency. Data on inventory turnover days is limited, but inventory increase YoY +30.8% is a trend to watch within the industry.
Soundness: Equity Ratio 81.0% is 21.8pt above industry median 59.2%, placing the financial base among the stronger companies in the industry. Current Ratio 235.3% also exceeds industry median 215%, indicating good short-term payment capacity. Net Debt/EBITDA is estimated to be negative due to limited interest-bearing debt, indicating a near net-cash management position.
Growth: Revenue growth +6.9% is 3.5pt below industry median +10.4%, so growth pace lags industry average. EPS growth +43.4% exceeds industry median +22% by a wide margin, but note that one-off items (gain on sale of investment securities) significantly contributed to this.
(Industry: Information & Communication Services (104 companies), comparison: FY2025 Q3, Source: Company aggregation)
Key points in this report are as follows. First, Operating Income achieved a substantial YoY increase of +76.8%, and Operating Margin improved 3.6pt from 5.5% to 9.1%, suggesting structural improvement in core business profitability. Second, a ¥70.0B gain on sale of investment securities and equity-method income of ¥62.0B boosted profits, and the impact of one-off items and investee-dependent income on earnings quality should be recognized. Third, ROE 5.9% and Total Asset Turnover 0.441x are below industry medians, indicating substantial room to improve capital efficiency; capital policy and operational efficiency are key future challenges. Fourth, deterioration in working capital efficiency (DSO 133 days, inventories +30.8%) and a -58.1% decrease in cash and deposits may constrain liquidity, making cash management improvements necessary.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial results data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly available financial statements. Investment decisions are your responsibility; please consult a professional advisor as necessary.