| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥1649.2B | ¥1558.4B | +5.8% |
| Operating Income | ¥114.0B | ¥77.9B | +46.4% |
| Ordinary Income | ¥119.4B | ¥82.5B | +44.6% |
| Net Income | ¥77.1B | ¥60.4B | +27.7% |
| ROE | 7.2% | 5.9% | - |
For the fiscal year ended March 2026, Revenue was ¥1649.2B (YoY +¥90.8B, +5.8%), Operating Income was ¥114.0B (YoY +¥36.1B, +46.4%), Ordinary Income was ¥119.4B (YoY +¥36.9B, +44.6%), and Net Income was ¥77.1B (YoY +¥16.7B, +27.7%), achieving both revenue and profit growth. Operating margin improved to 6.9% from 5.0% a year earlier, a 1.9pt improvement; net margin also rose to 4.7% (prior year 3.9%), up 0.8pt, indicating substantially improved profitability. By segment, the Anime & Streaming Business led high growth with Revenue +11.5% and Operating Income +55.0%, maintaining a high-margin structure at 12.6%. The Terrestrial & BS Broadcasting Business also recovered with Revenue +4.8% and Operating Income +36.4%, improving margin to 5.4%. Conversely, Shopping & Other Business declined with Revenue -2.1% and Operating Income -33.9%, leaving margin at 2.7%. Cash flow was strong with Operating Cash Flow ¥161.3B (YoY +113.1%) and Free Cash Flow ¥108.8B, covering dividends of ¥24.0B and share buybacks of ¥5.2B and increasing cash on hand by ¥74.8B. The balance sheet shows Total Assets ¥1557.8B, Net Assets ¥1075.5B, and an Equity Ratio of 69.0%, maintaining a conservative financial profile.
Revenue: Revenue was ¥1649.2B (YoY +5.8%). By segment, the Anime & Streaming Business recorded ¥523.1B (+11.5%), achieving double-digit growth driven by expanded monetization of program-related rights, video distribution, and events. The Terrestrial & BS Broadcasting Business was steady at ¥1034.0B (+4.8%), aided by an advertising market recovery and improved program production efficiency. Shopping & Other Business declined to ¥168.2B (-2.1%), weighed down by weakness in TV shopping. Revenue mix was 31.7% Anime & Streaming, 62.7% Terrestrial & BS Broadcasting, and 10.2% Shopping & Other, with the higher-margin Anime & Streaming segment’s share expansion contributing to overall margin improvement.
Profitability: Cost of sales was ¥1100.1B, Gross Profit ¥549.1B producing a gross margin of 33.3%, up 2.3pt from 31.0% a year earlier. SG&A was ¥435.1B (prior year ¥404.7B), increasing but outpaced by gross profit growth, delivering Operating Income of ¥114.0B (+46.4%) and an Operating Margin improvement to 6.9% (+1.9pt). Non-operating income totaled ¥6.3B (dividends received ¥2.5B, interest income ¥0.7B, equity-method investment gains ¥0.8B, etc.) against non-operating expenses ¥1.0B (interest expense ¥0.6B, etc.), resulting in Ordinary Income ¥119.4B (+44.6%). Extraordinary gains were ¥0.3B (gain on sale of investment securities) versus extraordinary losses ¥5.2B (impairment losses ¥3.5B, loss on disposal of fixed assets ¥0.6B, valuation losses on investment securities ¥1.1B), yielding profit before income taxes ¥114.4B. After income taxes of ¥37.3B (effective tax rate 32.6%), Net Income was ¥77.1B (+27.7%). Impairment losses and valuation losses on securities were identified as one-off items; the gap from Ordinary Income to Net Income is mainly attributable to tax burden and extraordinary losses. In conclusion, revenue and profit growth were achieved driven by high growth in Anime & Streaming and recovery in Terrestrial & BS Broadcasting.
Terrestrial & BS Broadcasting Business: Revenue ¥1034.0B (+4.8%), Operating Income ¥55.5B (+36.4%), margin improved to 5.4% (prior year 4.1%), driven by advertising market improvement and efficiencies in program planning and production. Anime & Streaming Business: Revenue ¥523.1B (+11.5%), Operating Income ¥65.9B (+55.0%), margin expanded to 12.6% (prior year 9.1%), up 3.5pt. Expansion of secondary use of anime IP, growth in video distribution revenue, and strong event business drove results, making this the primary profit source, accounting for 57.8% of consolidated Operating Income. Shopping & Other Business: Revenue ¥168.2B (-2.1%), Operating Income ¥4.5B (-33.9%), margin deteriorated to 2.7% (prior year 4.0%), a 1.3pt decline, with weakness in TV shopping and intensified e-commerce competition leading to lower segment profitability and partially diluting the company-wide average margin. Consolidated Operating Income after eliminations totaled ¥114.0B versus segment profit sum ¥125.9B; the adjustment of -¥11.9B is mainly holding company expenses.
Profitability: Operating Margin 6.9% (prior year 5.0%), up 1.9pt; Net Margin 4.7% (prior year 3.9%), up 0.8pt, aided by a higher-margin mix in Anime & Streaming and production efficiencies. ROE improved to 7.2% (prior year 6.0%); DuPont decomposition shows Net Margin 4.7% × Total Asset Turnover 1.06 × Financial Leverage 1.45×, with margin improvement as the primary driver. ROA (on Ordinary Income basis) was 7.9% (prior year 5.6%), a significant improvement. Cash Quality: Operating Cash Flow ¥161.3B is 2.09× Net Income ¥77.1B, Operating CF/EBITDA ratio 0.99×, indicating strong cash generation. Accrual ratio was -5.4%, demonstrating strong cash backing of profits. Investment Efficiency: Total Asset Turnover was 1.06x (prior year 1.05x), broadly unchanged; inventory days 20 days, trade receivables days 76 days, indicating working capital efficiency largely maintained. Capital expenditure was ¥22.4B and intangible investment ¥20.3B totaling ¥42.7B versus depreciation ¥48.1B, giving CapEx/Depreciation ratio 0.46x, indicating restrained investment. Financial Soundness: Equity Ratio 69.0% (prior year 68.8%), Net Cash ¥438.2B, reflecting an extremely conservative balance sheet. Current Ratio 218.6%, Quick Ratio 216.5% indicate ample short-term liquidity. Interest-bearing debt ¥54.2B versus Cash & Deposits ¥492.4B, Debt/EBITDA 0.33x, Interest Coverage 196.6x, providing substantial covenant headroom.
Operating Cash Flow was ¥161.3B (prior year ¥75.7B, +113.1%), rising materially. Profit before income taxes ¥114.4B plus depreciation ¥48.1B, impairment losses ¥3.5B and other non-cash expenses produced subtotal cash flow before working capital changes of ¥185.9B. Working capital movements included a decrease in trade receivables of ¥4.3B and an increase in accounts payable of ¥6.2B as cash inflows, offset by an increase in inventories of ¥14.0B as a cash outflow; an increase in contract liabilities ¥6.5B also contributed. After income taxes paid of ¥27.3B, Operating Cash Flow settled at ¥161.3B. Investing Cash Flow was -¥52.5B, primarily capital expenditures ¥22.4B and intangible asset investments ¥20.3B totaling ¥42.7B, net acquisition of investment securities ¥6.2B offset by sales ¥1.3B, and changes in time deposits, reflecting a restrained investment stance. Free Cash Flow, the sum of Operating and Investing Cash Flow, was ¥108.8B and ample. Financing Cash Flow was -¥34.0B, with dividend payments ¥24.0B, share buybacks ¥5.2B, long-term borrowings repayments ¥1.8B, and lease liabilities repayments ¥2.0B as main outflows, executing shareholder returns within Free Cash Flow. As a result, Cash and Cash Equivalents increased ¥74.8B during the period to an ending balance of ¥451.6B, further strengthening liquidity.
Ordinary Income ¥119.4B derives from Operating Income ¥114.0B plus non-operating income ¥6.3B (dividends received ¥2.5B, interest income ¥0.7B, equity-method investment gains ¥0.8B, etc.) minus non-operating expenses ¥1.0B; non-operating income is small at 0.4% of Revenue, indicating core business-led earnings. Extraordinary items netted -¥4.9B (extraordinary gains ¥0.3B − extraordinary losses ¥5.2B), with impairment losses ¥3.5B and valuation losses on investment securities ¥1.1B identified as one-offs. The downward effect from Ordinary Income to Net Income is mainly due to tax burden (effective tax rate 32.6%) and extraordinary losses, not indicating persistent impairment of earning power. Operating Cash Flow ¥161.3B is 2.09× Net Income ¥77.1B and accrual ratio -5.4%, showing strong cash backing for profits and no evidence of earnings management concerns. Comprehensive Income ¥84.7B exceeded Net Income by ¥7.6B, contributed by Other Comprehensive Income ¥7.6B (valuation differences on securities ¥7.5B, retirement benefit adjustments ¥0.1B, etc.), which are non-core valuation gains with limited sustainability. Overall, earnings quality is recurring and cash-backed, and can be assessed as high quality.
Full-year guidance is Revenue ¥1680.0B (YoY +1.9%), Operating Income ¥115.0B (YoY +0.9%), Ordinary Income ¥118.0B (YoY -1.2%), and Net Income ¥80.0B. Versus actuals, Revenue ¥1649.2B (achievement ratio 98.2%), Operating Income ¥114.0B (99.1%), Ordinary Income ¥119.4B (101.2%), Net Income ¥77.1B (96.4%)—landing broadly on forecast. Revenue missed the target due to weakness in Shopping & Other, but Operating Income nearly met guidance and Ordinary Income exceeded guidance by 1.2%. Net Income fell short by 3.6% due to extraordinary losses, but operating-stage profitability remained at expected levels. Full-year EPS guidance 300.55 yen vs. actual 289.30 yen. Dividend guidance 50.00 yen (annualized 100 yen) versus actual 100 yen (interim 15 yen, year-end 85 yen), with dividends executed as forecast. Given current progress, next fiscal year growth drivers will focus on further expansion of Anime & Streaming and sustaining profitability in Terrestrial & BS Broadcasting.
Dividends were annual ¥100 per share (interim ¥15, year-end ¥85), maintaining a Payout Ratio of 40.1% (prior year 40.1%). Total dividends ¥24.0B versus Free Cash Flow ¥108.8B provide 4.5× coverage; relative to Operating Cash Flow ¥161.3B, dividend payout is 14.9%, indicating ample room. Share buybacks of ¥5.2B were executed, bringing total returns (dividends + buybacks) to ¥29.2B. Total Return Ratio is 37.9% (Payout Ratio 40.1% combined with share buybacks equivalent to ¥6.8B, approx. 38%). Cash & Deposits ¥492.4B and Net Cash ¥438.2B maintain abundant liquidity, supporting dividend sustainability from a financial perspective. Outstanding shares 27,580 thousand, treasury shares 954 thousand; the dilution-adjustment effect from buybacks is limited, but this is a positive signal of shareholder return policy. Going forward, continued stable dividends and opportunistic share buybacks tied to Operating Cash Flow are expected.
Advertising market fluctuation risk: The Terrestrial & BS Broadcasting Business (Revenue ¥1034.0B, 62.7% of total) depends on advertising revenue and is sensitive to economic conditions and corporate advertising willingness. If the advertising market deteriorates, revenue decline and margin compression are expected. While margins improved to 5.4% this period from 4.1% prior, downside risk remains in a market reversal.
Content production cost inflation risk: The Anime & Streaming Business maintains high profitability (margin 12.6%), but continued rises in personnel and production costs could compress gross margins. Gross margin improved by 2.3pt year-over-year this period, but accelerated production cost inflation would pose a headwind to sustainable profitability. Suppressed capital investment (CapEx/Depreciation 0.46x) could also delay medium- to long-term renewal of production capacity.
Competitive weakness risk from underinvestment: Total capex ¥22.4B and intangible investment ¥20.3B (¥42.7B total) are below depreciation ¥48.1B, and fixed assets decreased by ¥18.4B year-over-year. Insufficient investment in broadcasting/distribution infrastructure and digital platforms could erode competitiveness and cause missed growth opportunities. While supportive of short-term cash generation, this could constrain revenue growth medium- to long-term.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 6.9% | 8.1% (3.6%–16.0%) | -1.2pt |
| Net Margin | 4.7% | 5.8% (1.2%–11.6%) | -1.2pt |
Profitability slightly lags the industry median but lies within the IQR, indicating broadly industry-standard levels.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 5.8% | 10.1% (1.7%–20.2%) | -4.3pt |
Growth rate is below the industry median but within the IQR, reflecting stable growth and the structural slowdown in the broadcasting sector.
※ Source: Company compilation
Expanding contribution from Anime & Streaming: The Anime & Streaming Business, accounting for 57.8% of Operating Income, achieved Revenue +11.5% and margin 12.6%, maintaining high growth and high margin. Continued expansion of the IP portfolio and growth in video distribution revenue could further lift consolidated margins and accelerate growth. Terrestrial & BS Broadcasting also showed recovery, and the dual engines are forming a stable profit-increasing structure.
Strong cash generation and conservative finances: Generating Operating Cash Flow ¥161.3B and Free Cash Flow ¥108.8B, the company covered dividends ¥24.0B and buybacks ¥5.2B while increasing cash by ¥74.8B. With Net Cash ¥438.2B and Debt/EBITDA 0.33x, the balance sheet is highly conservative, securing dividend sustainability and room for additional shareholder returns. However, continued investment restraint (CapEx/Depreciation 0.46x) raises concerns about medium- to long-term underinvestment.
This report is an AI-generated earnings analysis document produced by analyzing XBRL financial statement 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 disclosed financial statements. Investment decisions are the responsibility of the investor; please consult a professional advisor as necessary.