TV TOKYO Holdings Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥79.97B
• Operating Income: ¥7.06B
• Net Income: ¥1.68B
• EPS: ¥186.21

Income Statement

Balance Sheet

Cash Flow Statement

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

TV Tokyo Holdings reported a solid FY2026 Q2 with revenue of ¥79.98bn, up 8.4% YoY, and a sharp rebound in profitability. Operating income rose to ¥7.06bn (+252.4% YoY), lifting operating margin to roughly 8.8%, reflecting effective cost control and favorable mix. Gross profit of ¥20.93bn implies a gross margin of 26.2%, while SG&A is inferred at about ¥13.87bn (~17.3% of sales), indicating disciplined overhead management given only modest topline growth. Ordinary income reached ¥7.31bn, above operating income by ¥0.25bn, suggesting positive net non-operating items offsetting the minimal interest expense of ¥17m. Net income was ¥4.95bn (+193.1% YoY), with a reported net margin of 6.19%, highlighting strong operating leverage on higher revenue. DuPont analysis shows ROE of 4.70% driven by a net margin of 6.19%, asset turnover of 0.539x, and financial leverage of 1.41x; the leverage is conservative and ROE is primarily margin-driven this quarter. Liquidity appears robust with current assets of ¥90.44bn vs current liabilities of ¥42.36bn, yielding a current ratio of 213.5% and working capital of ¥48.07bn. The balance sheet is equity-heavy: equity of ¥105.45bn against assets of ¥148.48bn implies an equity-to-asset ratio around 71%, despite the reported equity ratio field showing 0.0% (likely undisclosed in the template). Debt-to-equity at 0.44x and interest coverage of 415x indicate low solvency risk. Cash conversion is the key weak spot: operating cash flow of ¥1.96bn is only ~40% of net income, likely reflecting working capital absorption and the timing of content investments/collections typical in media. Investing cash flow is shown as zero (likely undisclosed), so free cash flow cannot be reliably derived; the provided “FCF: 0” should be treated as not available rather than actual zero. Financing cash outflow of ¥2.84bn suggests shareholder returns and/or debt service, but details are not disclosed. Dividend per share is shown as 0 with a 0% payout ratio, which likely indicates missing disclosure rather than a policy change; caution is warranted before inferring dividend suspension. Overall, the quarter demonstrates strong operational execution and cost discipline, healthy financial resilience, and improving profitability, offset by weaker cash conversion and data limitations around investing and dividend flows. The outlook hinges on sustaining ad revenue recovery, controlling program/content costs, and improving OCF conversion. While ROE improved with margins, it remains modest at 4.7% for a media company with a strong equity base, leaving room for capital efficiency enhancements. Data gaps (cash/investments, DPS, detailed capex) limit precision, but available figures indicate a healthy rebound with manageable financial risk.

Profitability Analysis

ROE_decomposition: ROE 4.70% = Net margin 6.19% × Asset turnover 0.539 × Leverage 1.41. Margin expansion was the primary driver this quarter, with only modest leverage and moderate asset utilization. margin_quality: - Gross margin: 26.2% (¥20.93bn GP on ¥79.98bn revenue) shows improvement in cost of sales management and/or favorable programming mix. - Operating margin: ~8.8% (¥7.06bn OI) vs a modest topline increase implies significant operating leverage and SG&A discipline. - Net margin: 6.19% supported by low interest burden (¥17m) and positive non-operating balance (ordinary > operating). Reported effective tax rate field shows 0.0%, but using income tax expense of ¥693m against ordinary income suggests a low-to-mid single-digit to high-single digit effective tax rate; below net income, other adjustments (e.g., minority interests/extraordinary items) likely account for the gap. operating_leverage: Operating income increased 252% on an 8.4% revenue rise, evidencing high incremental margins from cost controls and scale benefits. EBITDA margin of 11.3% (¥9.06bn) vs operating margin of 8.8% implies D&A is modest (¥2.0bn), enabling strong flow-through from revenue to operating profit.

Growth Assessment

revenue_sustainability: Topline growth of 8.4% YoY indicates a healthy ad market recovery and/or stronger content distribution/licensing. Sustainability will depend on continuing advertiser demand, ratings stability, and digital monetization. profit_quality: YoY profit surge is driven by operating efficiency rather than financial engineering, as interest expense is negligible and ordinary income exceeds operating income. However, low OCF/NI (0.40x) tempers earnings quality, pointing to working capital timing and content cash outlays. outlook: With a strong 1H performance, maintaining cost controls and stable programming costs is key. Continued recovery in spot and time advertising, growth in digital platforms, and disciplined rights acquisition should support margins. Watch for potential normalization of incremental margins as cost savings annualize.

Financial Health

liquidity: Current assets ¥90.44bn vs current liabilities ¥42.36bn ⇒ current ratio 213.5%, quick ratio 213.5% (inventories are not reported). Working capital is ¥48.07bn, indicating ample short-term coverage. solvency: Total liabilities ¥45.94bn vs equity ¥105.45bn yields a conservative capital structure (liabilities/equity ~0.44x). Interest coverage is 415x (OI/interest), suggesting minimal refinancing risk. capital_structure: Equity accounts for roughly 71% of total assets (¥105.45bn/¥148.48bn), implying low leverage and capacity to absorb shocks. The reported equity ratio of 0.0% appears to be an undisclosed field rather than reflective of the actual structure.

Cash Flow Quality

earnings_quality: Net income ¥4.95bn vs OCF ¥1.96bn results in an OCF/NI of 0.40x, indicating weak cash conversion this period. This likely reflects higher receivables and/or program production payments customary in broadcasting cycles. FCF_analysis: Investing CF is shown as ¥0 (undisclosed). Without capex/content investment data, FCF cannot be reliably computed. The provided FCF value of 0 should be treated as not available. EBITDA of ¥9.06bn and modest D&A (~¥2.0bn) suggest potential for positive FCF over the full year if working capital normalizes. working_capital: High working capital (¥48.07bn) and the OCF shortfall vs earnings imply receivable build or payment timing. Monitor collections, advances for program rights, and payables cycles.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are shown as 0.00, likely undisclosed. On fundamentals, a 6.19% net margin and strong balance sheet could support distributions, but the low OCF/NI this quarter cautions against assuming coverage. FCF_coverage: FCF is not derivable due to missing investing cash flows; therefore, FCF coverage of dividends cannot be assessed from the provided data. policy_outlook: Absent disclosed DPS, infer no change in policy only with caution. Sustainability depends on improved cash conversion in H2, stability in ad revenue, and capex/content investment needs.

Risk Assessment

Business Risks:

• Advertising market cyclicality and macro sensitivity affecting spot and time ad revenue
• Content cost inflation and sports/rights fees escalation pressuring margins
• Audience rating volatility impacting pricing and affiliate revenues
• Competition from OTT/streaming platforms and digital ad shifts
• Content pipeline execution risk (production delays, hits/misses)
• Regulatory and compliance risks in broadcasting standards and spectrum usage
• Event-driven volatility (elections, disasters) altering programming mix and costs

Financial Risks:

• Weak OCF conversion vs net income in the period; potential for working capital strain
• Limited disclosure on investing CF and capex/content spend obscures FCF visibility
• Concentration risk among major advertisers and agencies
• Potential pension/retirement benefit obligations (not disclosed here) typical for legacy media
• Currency exposure for international content/licensing if applicable

Key Concerns:

• Sustainability of margin expansion after a sharp rebound
• Normalization of working capital and OCF improvement
• Visibility on capex/content cash outlays and their impact on FCF
• Maintaining ratings and ad share amid intensifying digital competition

Investment Implications

Key Takeaways:

• Strong operating rebound: OI +252% on revenue +8.4%, operating margin ~8.8%
• Healthy balance sheet with low leverage (liabilities/equity ~0.44x) and high liquidity (current ratio ~2.1x)
• Cash conversion weak this quarter (OCF/NI ~0.40x), likely timing-related
• ROE 4.7% driven by margin expansion; asset turnover moderate and leverage conservative
• Non-operating impact positive (ordinary > operating); interest burden negligible
• Data gaps (cash balance, investing CF, DPS) limit FCF and shareholder return analysis

Metrics to Watch:

• OCF/NI and working capital turns (receivables, payables, advances for program rights)
• Ad revenue trends by category (spot vs time) and pricing
• Content cost ratios and SG&A ratio sustainability (~17% of sales this quarter)
• Capex/content cash outflows and disclosed investing CF
• ROE trajectory and asset turnover improvements
• Digital/OTT revenue contribution and profitability

Relative Positioning: Within Japan’s terrestrial broadcasters, TV Tokyo appears to be executing effective cost control with conservative leverage and strong liquidity. Profitability has rebounded, though ROE remains modest relative to peers with larger scale (e.g., NTV, TV Asahi, TBS, Fuji Media). Continued improvement in cash conversion and digital monetization will be key to closing any profitability/ROE gaps.

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
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