Broadmedia Q1 Net Profit Rises 59% Even as Revenue Falls 11% After Exiting Broadcasting

A smaller company that earns more

Broadmedia Corporation (TSE: 4347) published consolidated first-quarter results for FY3/2027 on July 30, 2026, covering April 1 to June 30, 2026 under Japanese GAAP. Revenue fell 10.8% to ¥3,501 million, a decline of ¥423 million, while operating profit rose 7.3% to ¥262 million, ordinary profit 10.2% to ¥280 million and net profit attributable to owners of parent 59.4% to ¥212 million. Earnings per share reached ¥29.83 against ¥18.72.

The revenue fall is structural and deliberate. At the end of the prior fiscal year the company sold all its shares in Fishing Vision Co., Ltd. and thereby terminated its Broadcasting segment; from this fiscal year it reports four segments — Education, Studio & Production, Technology and Other. Technology, Studio & Production and Other all grew revenue this quarter; Education declined slightly; and the absence of Broadcasting accounts for the rest. Set against a year-earlier comparison that still contained a full quarter of Broadcasting, an 11% revenue decline alongside a 7% profit increase is the shape of a portfolio being pruned rather than a business shrinking.

Below the operating line, net profit grew far faster than operating profit for three separate reasons management sets out: higher ordinary profit, a smaller deferred tax adjustment, and the absence of a ¥31 million loss on retirement of fixed assets booked as an extraordinary item a year earlier.

Education carries the profit; Technology carries the growth

Education remains the profit engine: revenue down 1.5% to ¥1,528 million but operating profit up 16.8% to ¥350 million — more than the group's entire operating profit, which the loss-making segments partly offset. Within it, the correspondence high-school business (the Renaissance High School group) saw both revenue and profit decline, chiefly on lower enrolment at the Daigo campus and higher advertising spend. Japanese-language education grew on rising enrolment at the Renaissance Japanese Language Academy. The AI and programming education business — TechCamp, TechCamp High School and the divAgent IT recruitment service — grew revenue on strong individual AI courses and corporate AI training, and sharply narrowed its loss as advertising was restrained and headcount restructuring in the prior year brought personnel costs down.

Technology supplied the growth: revenue up 9.9% to ¥1,636 million, the largest segment — but profit fell 4.8% to ¥164 million. The core Akamai services (web application firewall and content delivery) grew both revenue and profit on strong delivery to existing and new customers, and other established services tracked the prior year. What pulled profit down was subsidiary divx Inc., whose contracted system development fell sharply while it spent more on exhibitions to win work, tipping it into a loss. So the segment grew revenue while going backwards on earnings — the pattern to watch here.

Studio & Production narrowed its operating loss to ¥6 million from ¥22 million on revenue up 1.9% to ¥364 million, as Japanese subtitling and programme production grew and fixed costs were compressed. The segment was reorganised on April 1, 2026 with the establishment of Broadmedia Studio Co., Ltd. through a new company split. The small Other segment grew revenue 15.4% to ¥56 million but widened its loss slightly to ¥12 million: the e-sports business turned profitable on cost restraint even as revenue fell with lower prize money, while game publishing grew on existing titles but spent ahead on new-title development. On July 1, 2026 the company transferred its professional e-sports team and ceased e-sports operations — a second business exited within three months of the first.

A cash-flow swing driven by policy

The balance sheet grew even as equity shrank. Total assets rose 4.7% to ¥10,218 million: current assets added ¥91 million to ¥6,575 million as receivables and work in progress rose against lower cash, and fixed assets added ¥367 million to ¥3,644 million, chiefly on guarantee deposits. Liabilities rose 14.3% to ¥5,371 million — current liabilities alone up ¥714 million — because the abolition of high-school tuition fees sharply increased deposits held on behalf of local governments for education support payments, offsetting lower advance receipts and a bonus provision paid down. Net assets fell 4.3% to ¥4,847 million as dividends outweighed the quarter's profit, taking the equity ratio down 4.5 points to 47.4% and net assets per share to ¥680.09 from ¥710.27.

The same policy change dominates the cash statement. Operating cash flow swung to an inflow of ¥830 million from an outflow of ¥364 million a year earlier: pre-tax profit of ¥280 million plus a large increase in deposits received more than offset lower advance receipts and higher trade receivables. Investing used ¥494 million, against ¥55 million, on guarantee deposits for the relocation of the Toyota campus and fixed-asset purchases. Financing used ¥456 million on dividends and debt repayment, against ¥712 million. Cash and equivalents ended ¥118 million lower at ¥4,727 million.

Guidance unchanged, dividend up

Broadmedia left the full-year forecast published on May 12, 2026 unchanged: revenue of ¥14,500 million, down 8.2% — the arithmetic of a full year without Broadcasting — with operating profit of ¥1,100 million (+3.5%), ordinary profit of ¥1,100 million (+0.4%) and net profit of ¥890 million (+13.8%), for earnings per share of ¥124.88.

Against that plan the first quarter delivered 24.1% of the revenue target but only 23.8% of the operating-profit target — broadly on pace, with no cushion built. The annual dividend is planned at ¥65.00, paid entirely at year-end, against ¥60.00 for FY3/2026 — an 8.3% increase, against guided net-profit growth of 13.8%.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.