Caulis Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥1.03B
• Operating Income: ¥328M
• Net Income: ¥218M
• EPS: ¥34.02

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

Kaulis reported solid topline and earnings momentum for FY2025 Q3 under JGAAP (non-consolidated), with revenue of ¥1,027.0m, up 14.7% YoY. Gross profit reached ¥563.94m, implying a healthy gross margin of 54.9%, indicative of an asset-light, high-value offering. Operating income was ¥328.0m, up 9.1% YoY, yielding an operating margin of 31.9%, although operating growth lagged revenue, suggesting modest operating deleverage or stepped-up investment. Ordinary income of ¥329.0m is slightly above operating income, reflecting minimal non-operating drag; interest expense was only ¥2.445m. Net income rose 27.2% YoY to ¥218.0m, with a net margin of 21.23%, evidencing robust bottom-line conversion. DuPont analysis indicates ROE of 13.73%, driven by a 21.23% net margin, asset turnover of 0.481x, and modest financial leverage of 1.35x. Balance sheet strength is notable: total assets are ¥2,137.0m and total equity ¥1,588.0m, implying an equity ratio of roughly 74.3% (derived), despite the reported equity ratio field showing 0.0% (likely not populated). Liquidity is strong with a current ratio of 300.4% and working capital of ¥1,219.46m, providing ample operating flexibility. Leverage is conservative with total liabilities/equity of 0.45x and interest coverage of 134.2x, limiting financial risk. The effective tax burden, inferred from income tax of ¥102.82m versus ordinary income, is approximately 31%, despite a reported 0.0% effective tax rate in the metrics; the latter likely reflects an unreported field. Cash flow statement items (operating, investing, financing CF) are not disclosed; hence cash conversion cannot be assessed from the provided data. Depreciation and amortization are also not disclosed, so EBITDA-based metrics are not meaningful here. Dividend per share is reported as zero and payout ratio as 0%, consistent with reinvestment prioritization in a growth phase. EPS of ¥34.02 is disclosed, but outstanding shares are not reported; per-share analytics beyond EPS are therefore limited. Overall, Kaulis exhibits attractive profitability, prudent balance sheet structure, and healthy growth, though visibility on cash flow quality and capital intensity is limited due to missing disclosures.

Profitability Analysis

ROE of 13.73% is decomposed into a net margin of 21.23%, asset turnover of 0.481x, and financial leverage of 1.35x. The dominant driver is high profitability at the margin level, with only modest balance sheet leverage. Gross margin stands at 54.9%, supporting a 31.9% operating margin and 32.0% ordinary margin, which suggests limited non-operating drag. Net margin of 21.23% confirms strong earnings conversion after tax and interest, consistent with a light interest burden (¥2.445m). YoY, operating income grew 9.1% against 14.7% revenue growth, indicating some operating deleverage, likely from higher SG&A (sales expansion, R&D, hiring) or pricing/mix headwinds. With D&A unreported, EBITDA and non-cash cost structure cannot be precisely gauged; however, the high operating margin points to favorable unit economics. The effective tax rate, inferred at roughly 31%, compresses net margins versus operating margins but remains within a normal range. Overall, profitability is robust and primarily driven by pricing power/efficiency rather than leverage.

Growth Assessment

Revenue expanded 14.7% YoY to ¥1,027.0m, indicating solid demand momentum. Operating income rose 9.1% YoY to ¥328.0m, lagging sales growth and implying incremental growth investments or cost inflation. Net income growth of 27.2% YoY to ¥218.0m outpaced operating growth, potentially reflecting minor non-operating tailwinds or a favorable tax/other line effect during the period. The sustainability of revenue growth will depend on customer acquisition and retention dynamics, which are not disclosed; however, high gross margins suggest a differentiated offering. Mix and pricing appear supportive given the 54.9% gross margin, though the gap between gross and operating margins hints at rising SG&A to fuel growth. Without cash flow data, the quality of growth (cash conversion, working capital intensity) cannot be validated from OCF. Asset turnover of 0.481x implies moderate capital intensity; improvements in utilization could bolster ROE even without higher leverage. Near-term outlook is cautiously positive based on margin structure and conservative leverage, but confirmation via backlog, ARR/deferred revenue, or order trends is necessary and not provided.

Financial Health

Liquidity is strong: current assets ¥1,827.98m versus current liabilities ¥608.52m yield a current ratio of 300.4% and substantial working capital of ¥1,219.46m. Quick ratio is reported at 300.4%, consistent with zero reported inventories (likely not disclosed, but not a driver here). Solvency is solid with total liabilities of ¥708.52m against equity of ¥1,588.0m, a liabilities-to-equity ratio of 0.45x. Interest expense is minimal (¥2.445m), and interest coverage is very high at 134.2x (operating income/interest expense), indicating ample buffer. The reported equity ratio of 0.0% appears inconsistent with the balance sheet; the derived equity ratio is approximately 74.3% (¥1,588.0m/¥2,137.0m), signifying a strong capital base. Overall, the company exhibits low financial risk and capacity to absorb shocks.

Cash Flow Quality

Operating, investing, and financing cash flows are not disclosed for the period; therefore, OCF/Net income and free cash flow measures cannot be assessed and reported zeros should not be interpreted as actual zero. Earnings quality cannot be validated via cash conversion, accruals, or working capital movements from the provided data. Given strong margins and low interest burden, underlying cash generation is likely positive, but confirmation requires OCF detail (e.g., changes in receivables, payables, and deferred revenue). Working capital is ample in absolute terms; however, the direction of receivables and contract liabilities (if applicable) remains unknown. Without D&A, we cannot separate cash and non-cash components of operating profit.

Dividend Sustainability

Annual DPS is reported as ¥0.00 with a payout ratio of 0%, consistent with reinvestment during a growth phase. Free cash flow coverage cannot be evaluated due to undisclosed OCF and capex, so the FCF-based payout capacity is unknown. Given net income of ¥218.0m and strong balance sheet metrics, capacity for future distributions may exist, but capital allocation priorities (growth vs. returns) are not disclosed. Policy outlook cannot be inferred without management guidance; presently, retention supports growth and liquidity.

Risk Assessment

Business Risks:

• Execution risk in sustaining double-digit revenue growth amid competitive dynamics
• Potential operating deleverage if SG&A investments outpace revenue growth
• Customer concentration and churn risk (not disclosed)
• Pricing and mix risk that could pressure gross margin
• Talent acquisition/retention constraints in a specialized domain

Financial Risks:

• Limited visibility on cash flow and working capital movements due to undisclosed CF statements
• Potential tax rate volatility (effective tax inferred ~31%)
• Exposure to macro slowdown affecting customer budgets
• Small-cap liquidity risk and higher earnings volatility typical of early-stage growth companies

Key Concerns:

• Lack of disclosed operating, investing, and financing cash flows limits earnings quality assessment
• D&A not disclosed, rendering EBITDA and cash cost structure unclear
• Reported equity ratio and effective tax rate fields appear inconsistent with derived figures

Investment Implications

Key Takeaways:

• Healthy growth with revenue up 14.7% YoY and net income up 27.2% YoY
• Strong profitability: 54.9% gross margin, 31.9% operating margin, 21.23% net margin
• ROE of 13.73% driven by high margins and modest leverage (1.35x)
• Robust balance sheet with derived equity ratio ~74% and interest coverage 134x
• Operating leverage softened YoY as operating income growth lagged revenue
• Cash flow disclosure absent; cash conversion and FCF durability unverified
• Dividend currently nil; capital being retained likely for growth

Metrics to Watch:

• Operating cash flow and free cash flow conversion versus net income
• Receivables days and deferred revenue trends (if applicable) to gauge demand quality
• SG&A intensity and operating margin trajectory for signs of operating leverage
• Gross margin stability as a proxy for pricing power and mix
• Effective tax rate normalization and any one-off items
• Balance sheet leverage and interest coverage in case of growth investments

Relative Positioning: Within high-margin, asset-light peers, Kaulis appears competitively profitable with conservative leverage and strong liquidity; however, relative standing on cash conversion and scalability cannot be established without cash flow and segment/ARR disclosures.

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
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