robot home Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥10.93B
• Operating Income: ¥309M
• Net Income: ¥661M
• EPS: ¥3.65

Income Statement

Balance Sheet

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

FY2025 Q3 was mixed for robot home: strong top-line growth but sharp profit contraction and reliance on non-recurring gains to bridge earnings. Revenue rose 37.3% YoY to 109.26, while operating income fell 56.2% YoY to 3.09, indicating significant margin pressure. Gross profit was 32.73, implying a gross margin of 30.0% this period. Operating margin compressed to 2.8% from roughly 8.9% a year ago (about 610 bps contraction by our estimate). Ordinary income declined 46.5% YoY to 3.68, a margin of 3.4% versus roughly 8.6% in the prior year (about 530 bps contraction). Net income came in at 3.27 (NPM 3.0%), down 50.5% YoY, cushioned by a very low effective tax rate of 1.3%. Profit before tax was 6.70, notably higher than ordinary income (3.68), suggesting approximately 3.0 of extraordinary or other below-ordinary gains this period. Non-operating items disclosed (0.09 income, 0.26 expense) do not fully explain the gap to ordinary income, reinforcing the likelihood of additional, less recurring items impacting PBT. SG&A rose to 25.66 (no breakdown disclosed), and the SG&A ratio appears elevated at roughly 23.5% of revenue, contributing to the margin squeeze. Liquidity is strong with current assets of 120.76 and current liabilities of 56.19 (current ratio 214.9%) and cash of 50.80 nearly covering all current liabilities in combination with receivables. Capital structure remains conservative-to-moderate with total liabilities/equity of 0.69x and assets/equity (financial leverage) of 1.69x. ROE is 3.4% (via DuPont), dampened by margin compression despite asset turnover of 0.679 and modest leverage. Reported ROIC of 5.4% sits below a typical 7–8% target range, indicating investment returns are currently subpar. Cash flow data were not disclosed, limiting assessment of earnings quality and dividend coverage; this is a key data gap. Forward-looking, the company must rebuild operating margin and demonstrate recurring profit generation (with normalized tax) to lift ROE/ROIC and sustain dividends comfortably.

Profitability Analysis

ROE decomposition (DuPont): ROE 3.4% = Net Profit Margin (3.0%) × Asset Turnover (0.679) × Financial Leverage (1.69x). The largest negative change YoY is clearly the margin component: operating income fell 56.2% despite 37.3% revenue growth, implying operating margin compression of roughly 610 bps (from ~8.9% to ~2.8%). Business drivers likely include heavier SG&A (25.66; ~23.5% of revenue) and/or weaker gross spread (gross margin 30.0%) due to product mix, pricing pressure, or upfront growth investments. The gap between ordinary income (3.68) and profit before tax (6.70) suggests non-recurring gains buttressed bottom-line profitability, masking the true run-rate margin. Sustainability: the margin compression appears cyclical or investment-driven, but the very low tax rate (1.3%) and extraordinary-like gains are unlikely to repeat at the same magnitude, so normalized ROE could be lower absent margin recovery. Watch for negative operating leverage: SG&A growth likely outpaced revenue (exact YoY SG&A not disclosed), which is a concern until operating scale efficiencies return.

Growth Assessment

Top-line growth was robust at +37.3% YoY to 109.26, indicating strong demand or expanded business scope. However, profit growth did not follow; operating income declined 56.2% and ordinary income fell 46.5%, signaling growth quality issues. Gross margin printed at 30.0%; without prior-year gross data, we cannot confirm whether mix/pricing deteriorated, but the OPM contraction indicates higher cost intensity and/or elevated overhead. The bottom line (NPM 3.0%) was supported by a 1.3% effective tax rate and below-ordinary gains (PBT 6.70 vs ordinary 3.68), which are unlikely to be sustainable growth drivers. Given reported ROIC at 5.4%, incremental returns on invested capital are below standard targets, implying that future growth must come with margin discipline to create value. Outlook hinges on proving operating leverage in subsequent quarters, stabilizing SG&A ratio, and increasing recurring revenue mix; otherwise, growth may remain volume-heavy but profit-light.

Financial Health

Liquidity is solid: current assets 120.76 vs current liabilities 56.19 imply a current ratio of 214.9% and quick ratio of 214.6% (low inventories at 0.15). No warning on current ratio (<1.0) or D/E (>2.0); both are comfortably within healthy ranges. Equity/asset position is strong with equity of 94.94 against assets of 160.91 (equity ratio ~59.0%) and financial leverage of 1.69x. Total liabilities/equity stands at 0.69x, while interest-bearing loans total 11.84 (short 3.51, long 8.33), indicating moderate debt reliance. Maturity mismatch risk appears low: cash (50.80) plus receivables (5.90) approximately cover current liabilities (56.19). No off-balance sheet obligations were disclosed; absence of disclosure limits assessment of guarantees or contingent liabilities.

Cash Flow Quality

Operating cash flow was not disclosed, so OCF/Net Income cannot be assessed; this is a key limitation for earnings quality evaluation. Free cash flow and capex are unreported, preventing validation of cash coverage for dividends and growth investments. Working capital appears light (low inventories and modest receivables), reducing the risk of aggressive working capital tactics, but without OCF we cannot rule out timing effects. The very low tax rate (1.3%) and the presence of below-ordinary gains (PBT materially above ordinary income) indicate that reported net income may exceed cash-generative run-rate earnings this quarter. Until OCF is provided, we treat earnings quality as unverified.

Dividend Sustainability

The calculated payout ratio is 55.7%, nominally within a sustainable range (<60%). However, DPS and total dividends paid were not disclosed, and FCF coverage is unavailable, so sustainability cannot be confirmed from cash flow. Liquidity (cash 50.80) and low leverage provide near-term flexibility to maintain dividends, but profit volatility (OPM compression) and reliance on a low tax rate/non-recurring gains raise medium-term caution. Outlook: if operating margin normalizes and ROIC improves toward >7–8%, payout within the mid-50% range looks maintainable; otherwise, management may need to balance payouts with reinvestment to rebuild profitability.

Risk Assessment

Business Risks:

• Margin compression risk: operating margin fell from ~8.9% to ~2.8% by estimate
• Execution risk on scaling: SG&A intensity (~23.5% of revenue) remains high
• Dependence on non-recurring items: PBT > ordinary income suggests one-off gains
• Tax normalization risk: very low 1.3% effective tax rate likely not sustainable
• Potential pricing/mix pressure affecting gross margin (30.0%)

Financial Risks:

• Earnings quality uncertainty due to missing OCF and FCF data
• Return metrics below target: ROIC 5.4% limits value creation if prolonged
• Volatility in quarterly profits could challenge dividend coverage absent cash flow strength
• Interest rate risk on floating-rate debt (loans total 11.84) despite strong coverage

Key Concerns:

• Large YoY decline in operating and ordinary income despite strong revenue growth
• Extraordinary or other below-ordinary gains elevating PBT to 6.70 vs ordinary 3.68
• Limited disclosure (no CF statement, SG&A breakdown) obscures cost drivers and cash conversion

Investment Implications

Key Takeaways:

• Top-line growth strong (+37.3% YoY) but profit contraction severe (OP -56.2% YoY)
• Operating margin compressed by ~610 bps to ~2.8%; SG&A ratio elevated
• Net profit supported by ultra-low tax and non-recurring gains; underlying run-rate likely lower
• Liquidity robust (current ratio ~215%, cash 50.80) and leverage moderate (liabilities/equity 0.69x)
• ROE modest at 3.4% and ROIC at 5.4% below typical targets
• Earnings quality unverified due to missing OCF/FCF; watch for cash conversion in Q4

Metrics to Watch:

• Operating margin and SG&A-to-sales ratio trajectory
• Gross margin stability and mix/pricing indicators
• OCF/Net income and free cash flow once disclosed
• Tax rate normalization and nature/recurrence of below-ordinary gains
• ROIC improvement toward >7–8% and ROE trend
• Debt profile (short vs long) and interest coverage in a rising rate environment

Relative Positioning: Within Japan small-cap prop-tech/real-estate services peers, robot home shows superior liquidity and conservative leverage but currently lags on profitability and capital efficiency due to pronounced operating margin compression and reliance on non-recurring items to sustain bottom-line.

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
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis