Honyaku Center (2483) Q2 2026 earnings summary

Executive summary

• H1 FY2026 net sales were ¥5,345m, down 2.2% YoY, mainly reflecting weakness in Translation despite record-high Interpretation sales.

• Operating profit fell 1.6% to ¥346m; ordinary profit rose 3.4% to ¥367m and net income rose 3.0% to ¥239m.

• AI and machine translation are reshaping the business environment, prompting a focus on data-driven sales and service innovation.

Financial highlights

• Gross profit was ¥2,535m, with a gross margin of 47.4%; SG&A declined 1.8% to ¥2,187m.

• Net assets were ¥6,759m and the shareholders' equity ratio was 79.2%; cash and cash equivalents were ¥4,398m, down ¥183m from the prior fiscal year.

• Operating cash flow was ¥742m; investing and financing activities used ¥673m and ¥251m, respectively.

• H1 revenue and operating profit represented 48.8% and 38.4% of FY forecasts, respectively.

Outlook and guidance

• FY2026 forecast: net sales ¥11,400m (+1.6% YoY), operating profit ¥900m (+1.0%), ordinary profit ¥920m (+1.5%) and net profit ¥630m (-12.9%); forecasts unchanged.

• Forecast gross margin is 47.8%, up 0.4 percentage points; Translation revenue is forecast at ¥8,650m (+1.6%).

• Sixth Mid-term Management Plan targets for FY2028: revenue ¥13bn, operating profit ¥1.2bn, net profit ¥800m and ROE of at least 10%.