Key Positives From The Results
Buoyed by a robust market backdrop—with the Nikkei 225 reaching a record high in the JPY 72,000 range during the quarter—the company's equity trading value surged +112% YoY to JPY 32.2T, a quarterly all-time high. Brokerage commissions of JPY 8,440M (+68.9% YoY) and net financial income of JPY 5,748M (+55.0% YoY) expanded simultaneously, lifting the OPM (on net operating revenue) to 55.2%. SG&A rose just +17.8% YoY, well below revenue growth, delivering pronounced operating leverage.
- Brokerage Commissions:JPY 8,440M (+68.9% YoY); trading value hit an all-time high while maintaining an 8.4% share of individual equity trading value
- Margin Trading Balance:Average outstanding balance of JPY 494.4B (+51% YoY); net financial income expanded to JPY 5,748M (+55.0% YoY) amid a rising rate environment. Deposit investment income generated JPY 2.06B/Q under a 1.00% policy rate
- Recurring Profit Margin:Rose to 51% (1Q prior year: 40%); annualized ROE reached 27.5%, reflecting improved capital efficiency
- Investment Trust AUM:JPY 707.1B (+25.7% vs. prior FY-end JPY 562.6B); periodic investment amount of JPY 19.3B/Q, expanding the recurring revenue base
- Brand & Customer Satisfaction:940K YouTube subscribers with 190M total views, No. 1 in the industry. Ranked first in JCSI customer satisfaction for the securities sector
Key Concerns From The Results
Trading income of JPY 1,366M (▲22.3% YoY) reflected declining FX trading value (JPY 129.9T, ▲0.7% YoY). The brokerage commission rate continued its downtrend to 2.5bp (1Q prior year: 3.1bp), pointing to a structural decline in the efficiency of converting trading value growth into revenue—a medium- to long-term issue.
- Trading Income:JPY 1,366M (▲22.3% YoY); FX trading value was essentially flat YoY, showing signs of growth deceleration
- Brokerage Commission Rate:Continued decline to 2.5bp (1Q prior year: 3.1bp); fee structure increasingly weighing on revenue mix
- Funding Costs:Financial expenses of JPY 1,414M (+103.7% YoY); short-term borrowings of JPY 457,900M (+44.5% vs. prior FY-end), with rising funding costs accelerating
- Futures & Options:Revenue of JPY 245M (▲10.9% YoY), contracting; futures market share edged down to 19% (1Q prior year: 20%)
- Capital Adequacy Ratio:Declined to 304% (prior FY-end: 308%); expansion in margin trading balances is driving up risk-equivalent amounts, warranting close monitoring
Focus Areas / Items To Monitor Going Forward
- Sustainability of net financial income expansion under a 1.00% policy rate environment. Per the company's sensitivity analysis, each +25bp adds approximately JPY 750M in annualized revenue, making earnings sensitivity to further rate hikes a key focus
- Progress of the US equities business (over 50% of trading participants traded SpaceX on its listing day) and CFD service rollout. Assessment of contribution as new revenue streams to offset declining commission rates
- Quantification of synergies from the equity stake in Five Star Investment Trust & Investment Advisory (20.95% of voting rights acquired). Progress of the YouTube-driven active fund distribution model
- Whether the decline in brokerage commission rate to 2.5bp is structural, and the outlook for the fee schedule
- Room to raise margin lending rates in a rising rate environment, and competitive positioning vs. peers
- Specific CFD service launch timing and revenue contribution outlook
- System investment amount and timeline for US equity market 23-hour trading support
- Factors behind the ▲22.3% YoY decline in FX trading income and recovery measures
- KPI targets for fund sales and AUM in the collaboration with Five Star Investment Trust & Investment Advisory
- Medium-term target for MATSUI Bank deposit balance (currently JPY 80B) and spillover effects on the securities business
- Rationale behind advertising expenses of JPY 995M (▲23% QoQ) and H2 marketing investment policy
- View on the appropriate level for the capital adequacy ratio at 304% and the effective ceiling on margin trading balances
- Quantitative results from the generative AI utilization project on operational efficiency
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Operating Revenue | JPY 17,299M | +51.6% |
| Net Operating Revenue | JPY 15,885M | +48.3% |
| Operating Income | JPY 8,763M | +87.7% |
| Recurring Profit | JPY 8,856M | +95.2% |
| Quarterly Net Income | JPY 5,609M | +95.3% |
| EPS | JPY 21.77 | +95.1% |
| Diluted EPS | JPY 21.71 | +94.9% |
| Commissions Received | JPY 8,765M | +67.1% |
| └ Brokerage Commissions | JPY 8,440M | +68.9% |
| Trading Income | JPY 1,366M | ▲22.3% |
| Net Financial Income | JPY 5,748M | +55.0% |
| └ Financial Revenue | JPY 7,162M | +62.7% |
| └ Financial Expenses | JPY 1,414M | +103.7% |
| SG&A | JPY 7,123M | +17.8% |
| Recurring Profit Margin (on Operating Revenue) | 51% | 1Q prior year: 40% |
| Company Equity Trading Value | JPY 32.2T | +112% |
| Margin Trading Avg. Outstanding Balance | JPY 494.4B | +51% |
Operating revenue, recurring profit, and quarterly net income all set quarterly records. SG&A was contained at +17.8% against +48.3% growth in net operating revenue, driving margin expansion.
Performance By Business Segment
The company operates as a single segment: online securities trading services. The revenue structure comprises three pillars: ① commissions received (50.7% of revenue), ② financial revenue (41.4%), and ③ trading income (7.9%). In 1Q, a buoyant equity market drove substantial top-line growth in ① and ②, while ③ declined due to FX-related weakness.
Segment Performance Table
| Segment | Revenue (Operating Revenue) | YoY | Operating Income | YoY | Margin |
|---|---|---|---|---|---|
| Online Securities Trading Services (Consolidated) | JPY 17,299M | +51.6% | JPY 8,763M | +87.7% | 50.7% |
- Equity Brokerage Commissions (Equities & ETFs): JPY 8,194M (+73.6% YoY). Nikkei 225 record highs spurred individual investor activity; two-market individual trading value surged +113% YoY
- Net Financial Income: JPY 5,748M (+55.0% YoY). Dual tailwinds from +51% growth in margin trading average balances and rate hikes (policy rate from 0.75% to 1.00%). Deposit investment income reached JPY 2.06B/Q (1Q prior year: JPY 970M/Q)
- Investment Trust Sales: Sales of JPY 102.4B/Q (+127.6% vs. JPY 45.0B in 1Q prior year). Point-bonus campaigns in partnership with asset management companies proved effective
- FX Trading: Income of JPY 1,366M (▲22.3% YoY). Trading value of JPY 129.9T was flat vs. 1Q prior year (JPY 130.8T), resulting in lower profitability
- Futures & Options: Brokerage commissions of JPY 245M (▲10.9% YoY). Futures market share edged down to 19% (1Q prior year: 20%)
Progress Versus Full-Year Guidance
The company does not disclose full-year guidance due to the significant impact of market conditions on results. Against full-year results for the prior fiscal year—operating revenue of JPY 52,660M and recurring profit of JPY 23,812M—1Q actuals represent 32.8% and 37.2%, respectively, running ahead of the prior-year pace. While the prior year was skewed toward 4Q, this fiscal year's 1Q benefited from a favorable market environment and exceeded typical seasonal patterns.
| Item | Value (1Q Actual) | Prior FY Full-Year Actual | % Of Prior FY Full-Year |
|---|---|---|---|
| Operating Revenue | JPY 17,299M | JPY 52,660M | 32.8% |
| Recurring Profit | JPY 8,856M | JPY 23,812M | 37.2% |
| Quarterly Net Income | JPY 5,609M | JPY 15,480M | 36.2% |
- The securities industry lacks a clear seasonal pattern, as performance is driven by equity market volatility and trading value levels
- While 4Q was the peak in the prior year (operating revenue JPY 15,367M), the current fiscal year's 1Q is running +12.6% ahead of the prior-year 4Q
Changes To Guidance
The company does not disclose earnings guidance, citing the difficulty of forecasting in a market-dependent business. Key operating metrics (equity trading value, brokerage commission revenue, etc.) are disclosed monthly.
Commentary On Shareholder Returns
The dividend forecast for FY03/2027 is undetermined (interim, Q3, and year-end all undecided). The prior fiscal year's dividend was JPY 50/share (JPY 25 interim + JPY 25 year-end; total payout of JPY 6,440M + JPY 6,440M). No revisions to the dividend forecast.
Financial Position
Reflecting the balance sheet structure characteristic of securities firms, customer deposits (segregated trust) and margin trading loans comprise the bulk of assets. Although short-term borrowings increased alongside margin trading expansion, a capital adequacy ratio of 304%—above the 259% average for the five major online brokers—was maintained, ensuring financial soundness.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Total Assets | JPY 1,525,023M | +12.6% vs. prior FY-end |
| └ Total Current Assets | JPY 1,498,482M | +12.9% vs. prior FY-end |
| └ Total Non-Current Assets | JPY 26,541M | ▲0.6% vs. prior FY-end |
| Customer Deposits | JPY 766,512M | +2.3% vs. prior FY-end |
| Margin Trading Loans | JPY 552,532M | +30.4% vs. prior FY-end |
| Short-Term Borrowings | JPY 457,900M | +44.5% vs. prior FY-end |
| Net Assets | JPY 81,691M | ▲0.8% vs. prior FY-end |
| Shareholders' Equity | JPY 81,327M | ▲0.8% vs. prior FY-end |
| Equity Ratio | 5.3% | Prior FY-end: 6.1% |
| Book Value Per Share | JPY 315.68 | Prior FY-end: JPY 318.39 |
| Capital Adequacy Ratio | 304% | 5 major online broker avg.: 259% |
News Released Alongside The Earnings Announcement
None
Major Announcements During The Quarter
- 2026/05/26Announced commencement of SpaceX trading on its NASDAQ listing day. On the listing day, 50.1% of US equity trading participants traded SpaceX, contributing to customer base expansion SpaceX trading available from listing day
- 2026/06/30Permanently reduced spreads across 27 FX currency pairs, with reductions of up to 70%, strengthening FX trading competitiveness FX Service: Permanent reduced spread reductions for 27 currency pairs
- 2026/07/10Added distribution reinvestment plan switching functionality for investment trusts, enhancing app usability Distribution course change now available (scheduled for 7/25 (Sat))
- 2026/07/23MATSUI Bank surpassed JPY 80B in total deposits and 200K accounts. High interest rates linked to securities balances (up to 0.75% p.a.) drove customer acquisition MATSUI Bank surpasses JPY 80B in total deposits and 200K accounts
Large-Shareholding Filings / Material Proposals Over The Past Year
None
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