SKY Perfect JSAT Corporation FY2027 Q1 Earnings Report

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Executive Summary

The most significant feature of the quarter was that operating leverage took effect, with the rate of profit growth substantially exceeding the rate of revenue growth. Revenue was ¥33.39B (+12.0% YoY), Operating Income was ¥10.89B (+36.0%), Ordinary Income was ¥11.37B (+38.3%), and Net Income attributable to owners of the parent was ¥8.23B (+49.6%). The primary driver of revenue growth was the strong growth of the Space Business (+23.3%), while the main drivers of profit growth were the expansion of the Operating Income margin resulting from improved gross margin and SG&A cost control, as well as improved profitability in the Media Business (Operating Income +59.3%).

Factors Affecting Business Performance

【Revenue】Revenue was ¥33.39B, up +12.0% YoY. By segment, Space recorded ¥16.64B (+23.3%, composition ratio 49.8%), while Media recorded ¥16.76B (+2.6%, composition ratio 50.2%), with Space driving overall company growth. In addition, terrestrial video network-related services were reclassified from Space to Media beginning this quarter, and the same-period comparison for the previous year also uses the revised classification.

【Profit and Loss】The Operating Income margin improved to 32.6%, from 26.9% in the previous year, an improvement of +5.7pt. The gross margin rose to 51.1% from 48.3% in the previous year, while SG&A expenses were contained at ¥6.16B, compared with ¥6.41B in the previous year, contributing to the improvement in profitability. Ordinary Income was ¥11.37B (+38.3%), including ¥0.53B in interest income and ¥0.77B in non-operating income. Net Income attributable to owners of the parent was ¥8.23B (+49.6%) after deducting ¥3.10B in income taxes and other taxes, representing growth in both revenue and profit.

Segment Analysis

Space recorded revenue of ¥16.64B (+23.3%), Operating Income of ¥6.43B (+21.8%), and a profit margin of 38.6% (down -0.5pt from 39.1% in the previous year), with the profit margin remaining nearly flat despite revenue growth. Media recorded revenue of ¥16.76B (+2.6%), Operating Income of ¥4.69B (+59.3%), and a profit margin of 28.0% (up +10.0pt from 18.0% in the previous year), demonstrating a significant improvement in profitability and becoming one of the primary drivers of profit growth in the quarter. The difference in profit margins between the two segments was 10.6pt, and the improved mix in Media contributed to raising the overall company profit margin. Beginning this quarter, terrestrial video distribution-related services were organizationally transferred from Space to Media, and the comparison with the same period of the previous year is based on the revised classification.

Key Financial Indicators

【Profitability】The Operating Income margin was 32.6%, improving by +5.7pt from 26.9% in the previous year, while the Net Income margin, based on income attributable to owners of the parent, was 24.6%, improving by +6.2pt from 18.4% in the previous year. 【Cash Flow Quality】Operating Cash Flow (OCF) was ¥16.67B, approximately 2.0 times Net Income attributable to owners of the parent of ¥8.23B, indicating strong cash backing for earnings. 【Investment Efficiency】ROE was 2.7%; the accumulation of equity, reflected in the rise in the Equity Ratio, and low asset turnover were factors weighing on the figure. 【Financial Soundness】The Equity Ratio was high at 77.1%. Current liabilities were limited to ¥53.99B against current assets of ¥170.12B, indicating substantial short-term payment capacity.

Cash Flow Analysis

Operating Cash Flow was ¥16.67B, steadily increasing by +9.4% YoY. Investing Cash Flow was -¥18.63B, of which capital expenditures accounted for ¥17.34B. Capital expenditures were 4.6 times depreciation and amortization expenses of ¥3.80B, indicating an active investment phase. Financing Cash Flow was -¥12.81B, with dividend payments of ¥6.49B and repayment of borrowings and other items serving as the primary sources of cash outflow. As a result, Free Cash Flow was -¥1.95B; however, this represents a temporary funding shortfall associated with the investment phase. Given cash and deposits of ¥63.81B and the low level of interest-bearing debt, concerns regarding liquidity are considered limited.

Earnings Quality

The increase in profit during the quarter was primarily attributable to improvements at the operating level, with no extraordinary gains or losses recorded, indicating a recurring earnings structure. Non-operating income of ¥0.77B, including dividend income of ¥0.01B and foreign exchange gains of ¥0.01B, and non-operating expenses of ¥0.28B, including interest expenses of ¥0.12B, contributed a net +¥0.49B, indicating limited dependence on non-operating gains and losses. The difference between Ordinary Income of ¥11.37B and Net Income attributable to owners of the parent of ¥8.23B was primarily attributable to income taxes and other taxes of ¥3.10B, with no unusual factors other than the tax burden identified. Comprehensive Income was ¥9.22B, ¥0.99B above Net Income attributable to owners of the parent of ¥8.23B, primarily due to foreign currency translation adjustments of +¥1.33B. Together with OCF exceeding Net Income, earnings quality can be assessed as high.

Earnings Forecasts and Guidance

Against the Full-Year plan of Revenue of ¥135.00B, Operating Income of ¥39.00B, and Ordinary Income of ¥39.00B, progress for the quarter was 24.7% for Revenue, 27.9% for Operating Income, and 29.2% for Ordinary Income. Net Income attributable to owners of the parent was 30.5% of the Full-Year forecast of ¥27.00B, exceeding the standard quarterly progress rate of 25%, with progress particularly ahead on the profit side. The company has not revised its earnings forecasts and has maintained its current plan.

Shareholder Returns

The dividend forecast is ¥48.00 per share, resulting in a Payout Ratio of approximately 50.4% based on the company’s forecast EPS of ¥95.26. As the breakdown between the interim and year-end dividends for the current fiscal year has not been disclosed, the figure is presented on an annual forecast basis. No change was observed in the number of treasury shares (14.24M shares) during the quarter, and no disclosure concerning share repurchases was identified. The dividend forecast has not been revised.

Risk Factors

1. Expansion of construction in progress (CIP): Construction in progress was ¥93.12B, accounting for 23.2% of total assets. The increase in depreciation expenses after the start of operations and management of the investment recovery schedule will be key monitoring points going forward.

2. Revenue concentration in the Media Business: The Media Business accounted for 50.2% of revenue, and changes in contract trends and the cost structure of this business have a relatively significant impact on overall company performance.

3. Level of capital efficiency: ROE was 2.7% and the Equity Ratio was 77.1%, indicating strong financial soundness. However, capital efficiency relative to the asset base remains low, leaving room for improvement in asset turnover.

Industry Benchmark (For Reference; Compiled by the Company)

Profitability and Returns

Both the Operating Income margin and Net Income margin were substantially above the industry median, placing profitability in the upper tier of the industry.

Growth and Capital Efficiency

The Revenue growth rate was slightly above the industry median and positioned in the upper range of the IQR.

※Source: Compiled by the Company

Key Points from the Earnings Results

1. The Operating Income margin improved by +5.7pt YoY, confirming operating leverage driven by improved gross margin and SG&A cost control. In particular, the Media Business margin improved by +10.0pt, suggesting a change in its earnings structure.

2. Progress against the Full-Year plan exceeded the standard 25% progress rate on the profit side (Net Income progress of 30.5%), indicating solid progress toward achieving the plan.

3. The company is in an investment phase, with construction in progress accounting for 23.2% of total assets and Free Cash Flow at -¥1.95B. The balance between expense recognition and earnings contribution as operations commence will be a key point of focus as the earnings structure evolves.

Theoretical Share Price (Reference Value)

This is a mechanically calculated reference range based solely on publicly disclosed data using a residual income model (Ohlson-type model with an explicit 5-year fade period). It is not a forecast of the market share price or a recommendation to take any specific investment action.

Sensitivity: ¥1,036–¥1,095 at ±1% for the cost of equity, and ¥1,064–¥1,065 at ±0.1 for ω.

Notes:

• As forecast ROE is below the cost of equity, the theoretical value is below book value per share.
• Net assets as of the quarter-end are used; therefore, there is a timing difference relative to the Full-Year forecast.

(Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-07 / This value does not predict or guarantee the future share price)

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This report is an earnings analysis document automatically generated by AI through analysis of XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the company based on publicly available earnings data. Investment decisions should be made at your own responsibility, after consulting professionals as necessary.

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