| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥173.1B | ¥162.4B | +6.6% |
| Operating Income / Operating Profit | ¥24.6B | ¥26.4B | -6.6% |
| Ordinary Income | ¥24.9B | ¥26.9B | -7.2% |
| Net Income / Net Profit | ¥20.5B | ¥14.6B | +40.6% |
| ROE | 10.8% | 7.6% | - |
For the cumulative Q2 of FY2026 (fiscal year ending March 2026), PCA Corporation reported Revenue ¥173.1B (YoY +¥10.7B +6.6%), Operating Income ¥24.6B (YoY -¥1.7B -6.6%), Ordinary Income ¥24.9B (YoY -¥1.9B -7.2%), and Net Income attributable to owners of the parent ¥20.5B (YoY +¥5.9B +40.6%). Amid a revenue-increase but operating-profit-decline structure, the recording of a special gain on sale of investment securities of ¥8.9B led to a substantial increase in final profit. Operating margin declined to 14.2% (down 1.9pt from 16.2% in the prior year period), indicating lower operating profitability, while Net Income significantly exceeded the prior year due to one-off items.
[Revenue] Revenue grew solidly to ¥173.1B (YoY +6.6%). Gross profit was ¥105.7B with a gross margin of 61.1% (down 1.9pt from 63.0% in the prior year period). Contract liabilities were ¥111.6B, up ¥5.3B from ¥106.3B in the prior period, strengthening the prepaid-type stock revenue base. The revenue growth appears to be driven by stable growth in subscription-type revenue, as evidenced by the accumulation of contract liabilities.
[Profitability] Operating Income declined to ¥24.6B (YoY -6.6%), with an operating margin of 14.2% (approximately 2.0pt lower than 16.2% in the prior year period). SG&A expenses were ¥81.1B, with an SG&A ratio of 46.8% (up 0.1pt from 46.7% in the prior year period), almost flat; however, SG&A increased roughly in line with revenue growth of +6.6%, so operating leverage did not materialize. Ordinary Income was ¥24.9B (YoY -7.2%), reflecting weakness at the operating level; non-operating income was ¥1.1B (including interest income ¥0.5B and dividend income ¥0.2B), and non-operating expenses were ¥0.7B, so non-operating items provided only a slight positive contribution. A special gain on sale of investment securities of ¥8.9B was recorded, while special losses were minor at ¥0.5B. Profit before income taxes expanded to ¥33.8B (YoY +26.9%), income tax expense was ¥10.1B (effective tax rate 29.8%), and after deducting profit attributable to non-controlling interests ¥0.2B, Net Income attributable to owners of the parent was ¥20.5B (YoY +40.6%). In conclusion, the company experienced revenue growth with operating decline, but secured final profit growth due to special gains.
[Profitability] Operating margin was 14.2%, down 1.9pt from 16.2% in the prior year period; Net Profit Margin was 11.8%, up 2.8pt from 9.0% in the prior year period. The improvement in Net Profit Margin is mainly due to the one-off special gain on sale of investment securities of ¥8.9B (5.1% of Revenue). ROE was 10.8%, improved 1.6pt from 9.2% in the prior year period, but this improvement is also driven by the temporary uplift in final profit. [Cash Quality] Operating Cash Flow (OCF) was ¥14.3B versus Net Income ¥20.5B, yielding an OCF/Net Income ratio of 0.70x, indicating weak cash conversion of earnings. EBITDA (Operating Income ¥24.6B + Depreciation ¥1.8B) was ¥26.4B, and OCF/EBITDA ratio was 0.54x, a low level, suggesting relatively high dependence on accruals. [Investment Efficiency] Total asset turnover was 0.49x (annualized), roughly flat versus the prior year period; total assets were ¥354.0B (up 1.2% from ¥349.7B). Capital expenditure was ¥2.3B, 1.25x depreciation ¥1.8B, indicating growth-oriented investment, while intangible fixed assets surged to ¥4.3B (from ¥2.2B, +¥2.1B +92.8%), reflecting accelerated upfront investment in software, etc. [Financial Soundness] Equity Ratio was 53.8% (down 1.3pt from 55.1% in the prior year period), maintaining a healthy level; D/E ratio was 0.86x, low, indicating limited reliance on interest-bearing debt. Current ratio was 178.9% and quick ratio 178.0%, indicating very high short-term liquidity; cash and deposits were ¥209.2B and ample. Deferred tax assets increased substantially to ¥21.3B (from ¥12.2B, +¥9.1B +74%), necessitating monitoring of realizability of future taxable income and recoverability of assets.
Operating CF was ¥14.3B, down -49.7% from ¥28.5B in the prior year period. Operating CF subtotal (before working capital changes) was ¥30.2B, down -16.3% from ¥36.1B in the prior year period, indicating somewhat weaker core cash generation. In working capital, increases in trade receivables (cash outflow) were -¥3.9B, increases in contract liabilities (cash inflow) were +¥5.3B, and increases in accounts payable (cash inflow) were +¥0.2B, so overall working capital was cash-inflow oriented; however, the largest negative factor was corporate taxes paid of -¥16.6B (double prior period -¥8.0B). Investing CF was -¥25.2B (deteriorated significantly from -¥2.7B in the prior year period), affected by capital expenditures -¥2.3B, intangible asset investments -¥1.1B, investment securities purchases -¥4.0B and sales +¥9.2B. Free Cash Flow was Operating CF ¥14.3B + Investing CF -¥25.2B = -¥10.8B (turned negative). Financing CF was -¥18.4B (prior year -¥16.9B), mainly due to dividend payments of -¥17.4B. Cash and cash equivalents decreased by -¥29.2B from opening ¥214.7B to closing ¥185.5B; year-end cash and deposits remained ample at ¥209.2B despite the decline.
The primary driver lifting Net Income ¥20.5B was the special gain on sale of investment securities of ¥8.9B. Relative to Ordinary Income ¥24.9B, special items contributed +¥8.4B (special gains ¥8.9B - special losses ¥0.5B), expanding Profit before Income Taxes to ¥33.8B. Non-operating income was ¥1.1B (0.6% of Revenue), primarily stable financial income such as interest income ¥0.5B and dividend income ¥0.2B. On a core/recurring basis excluding special items from Ordinary Income ¥24.9B, final profit is estimated to be around ¥17B, so the reported Net Income ¥20.5B reflects a temporary uplift. Total comprehensive income was ¥15.8B, ¥4.7B below Net Income ¥20.5B, mainly due to Other Comprehensive Loss—valuation differences on available-for-sale securities of -¥7.9B. With Operating CF ¥14.3B versus Net Income ¥20.5B, OCF/Net Income ratio 0.70x and OCF/EBITDA ratio 0.54x, the quality of earnings is somewhat weak, suggesting higher accruals associated with one-off gains.
Full-year guidance is Revenue ¥189.7B (YoY +9.6%), Operating Income ¥12.7B (YoY -48.6%), Ordinary Income ¥13.1B (YoY -47.3%), and Net Income attributable to owners of the parent ¥5.7B (YoY -72.2%). Progress against the full-year guidance through the cumulative Q2 is: Revenue 91.2%, Operating Income 193.7%, Ordinary Income 190.1%, and Net Income 359.6%, indicating that profits in the first half substantially exceed the full-year forecast. The full-year forecast appears conservative, assuming a significant profit decline in H2 due to the reversal of temporary gains from sale of investment securities and continued expense increases associated with growth investments (personnel costs, R&D, selling expenses, etc.). The company discloses uncertainty in "Cautions regarding forward-looking statements" and notes actual results may differ from forecasts.
Year-end dividend is ¥95 per share (interim dividend ¥0), with total dividends of ¥17.4B. The payout ratio relative to Net Income attributable to owners of the parent ¥20.5B is 85.1% (Total Dividends ¥17.4B ÷ Net Income attributable to owners of the parent ¥20.5B), a high level. Free Cash Flow is -¥10.8B, so dividend payments are not covered by this period’s cash generation. However, cash and deposits of ¥209.2B are ample, so there is no short-term concern regarding dividend payment capacity. According to notes on dividend guidance, next fiscal year’s dividend policy will be calculated based on DOE (Dividend on Equity) of 4.5%, indicating a capital policy oriented toward dividend stability not strictly tied to profit levels. The full-year forecast lists dividend forecast as ¥0, reflecting that the full-year Net Income forecast ¥5.7B has decreased significantly, leaving dividend levels undecided. No share buyback disclosure has been made; shareholder returns are focused on dividends.
Risk of declining operating margin: Operating margin declined to 14.2% from 16.2% in the prior year period (~2.0pt shrinkage), and SG&A increases are pressuring core profitability. The full-year forecast anticipates Operating Income ¥12.7B (YoY -48.6%), implying continued margin deterioration due to upfront growth investments in personnel, R&D, and selling expenses.
Risk of dependence on one-off gains: Of Net Income ¥20.5B, ¥8.9B was recorded as a special gain on sale of investment securities, creating a profit structure detached from recurring earnings capacity. Total comprehensive income ¥15.8B is ¥4.7B below Net Income ¥20.5B, and the valuation difference on available-for-sale securities of -¥7.9B suggests shrinking unrealized gains on held assets. The full year may see a significant profit decline due to reversal of one-off gains.
Risk from weak cash conversion: OCF/Net Income ratio 0.70x and OCF/EBITDA ratio 0.54x indicate weak cash conversion, and corporate taxes paid of -¥16.6B are a significant burden. The increase in trade receivables -¥3.9B suggests lengthening collection periods (DSO approx. 66 days), which is a concern. Free Cash Flow is -¥10.8B and dividend payments ¥17.4B are not covered by current cash generation; continued decline in cash balances could impair medium- to long-term shareholder return capacity.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 14.2% | 8.1% (3.6%–16.0%) | +6.1pt |
| Net Profit Margin | 11.8% | 5.8% (1.2%–11.6%) | +6.0pt |
| Profitability significantly exceeds the industry median, and the company maintains top-tier profitability within the information services industry. |
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 6.6% | 10.1% (1.7%–20.2%) | -3.5pt |
| Revenue growth rate is below the industry median, indicating a somewhat slower growth pace compared with peers. |
※Source: Company compilation
Depth of stock revenue base: Contract liabilities ¥111.6B (up ¥5.3B YoY) indicate accumulating prepaid-type stock revenue, enhancing revenue stability and predictability. With gross margin 61.1% and operating margin 14.2%, the company maintains profitability well above industry medians and demonstrates high business-model quality; however, weak operating leverage due to rising SG&A and the conservative full-year guidance for significant profit decline suggest the company is in an upfront phase of growth investment.
Gap between one-off-driven final profit growth and full-year profit decline forecast: First-half Net Income ¥20.5B was boosted by a one-off gain on sale of investment securities ¥8.9B, while recurring earnings show a decline (Operating Income ¥24.6B YoY -6.6%, Ordinary Income ¥24.9B YoY -7.2%). The full-year forecast projects Revenue +9.6% but Operating Income -48.6% and Net Income -72.2%, incorporating H2 expense increases and reversal of one-offs under conservative assumptions. Dividend policy is shifting toward a DOE 4.5% benchmark, emphasizing dividend stability amid profit volatility.
Need to improve cash generation and accounts receivable efficiency: OCF/Net Income ratio 0.70x and OCF/EBITDA ratio 0.54x indicate weak cash conversion, with corporate tax payments -¥16.6B and increases in trade receivables -¥3.9B being headwinds. Free Cash Flow is -¥10.8B and dividends ¥17.4B are not covered by this period’s cash generation, although ample liquidity (cash and deposits ¥209.2B) provides support. The sharp rise in intangible fixed assets (+92.8%) and large increase in deferred tax assets (+74%) reflect growth investments and tax-effect accounting, and progress on asset recoverability and monetization will be key to improving cash generation.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your own responsibility; please consult professionals as necessary before making investment decisions.