CAREER DESIGN CENTER CO.,LTD. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥18.65B
• Operating Income: ¥1.58B
• Net Income: ¥1.10B
• EPS: ¥209.67

Income Statement

Balance Sheet

Cash Flow Statement

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

Career Design Center (24100) reported FY2025 Q4 (JGAAP, non-consolidated) results showing steady top-line growth and stronger operating leverage. Revenue rose 5.1% YoY to ¥18.65bn with gross profit of ¥9.74bn, implying a solid gross margin of 52.2%. Operating income increased 10.5% YoY to ¥1.58bn, outpacing revenue growth and indicating positive operating leverage. Ordinary income was ¥1.60bn and net income ¥1.10bn, translating into a 5.90% net margin. DuPont analysis indicates a robust ROE of 23.77%, driven by healthy asset turnover (2.41x), moderate financial leverage (1.67x), and a mid-single-digit net margin. Cash generation was strong: operating cash flow reached ¥2.03bn (OCF/NI 1.85x), and free cash flow was ¥1.69bn after ¥0.34bn of net investing outflows. Liquidity appears comfortable with a current ratio of 1.86x and working capital of approximately ¥1.97bn. Solvency risk looks low: total liabilities of ¥2.57bn against equity of ¥4.63bn (implying an equity ratio around 60% based on totals, though the reported equity ratio metric shows 0.0% and should be treated as undisclosed). Interest expense is minimal (¥9.1m) with interest coverage of roughly 174x, pointing to very modest financial burden. EBITDA was ¥2.04bn with an 11.0% margin, consistent with an asset-light, service-centric model. The effective tax rate metric is shown as 0.0%, but based on reported taxes (¥451m) and net income, the implied tax burden appears closer to the low-30% range; therefore, the 0.0% figure should be treated as not disclosed. Dividend information (DPS and payout) is not disclosed in the data provided, so we cannot assess dividend distributions this period. Balance sheet cash and outstanding shares are not disclosed, limiting per-share and liquidity granularity despite strong cash flow indicators. Overall, the company demonstrates high ROE, solid margins, positive operating leverage, and strong cash conversion, albeit with data gaps in certain disclosures. The outlook hinges on sustaining revenue growth in a cyclical hiring and advertising environment while preserving cost discipline. Key watchpoints include revenue pipeline health, operating expense control, and working capital trends that supported the OCF outperformance.

Profitability Analysis

ROE_decomposition: ROE 23.77% = Net margin 5.90% × Asset turnover 2.411 × Financial leverage 1.67. The result reflects solid efficiency (high turnover) and moderate leverage rather than heavy reliance on margins or debt. margin_quality: Gross margin is 52.2% (¥9.74bn/¥18.65bn), indicating strong value-add in recruitment/media services. Operating margin is approximately 8.5% (¥1.58bn/¥18.65bn), and net margin is 5.90%. Ordinary margin is ~8.6%. The margin structure is consistent with an asset-light service model with controllable fixed costs. operating_leverage: Revenue grew 5.1% YoY while operating income rose 10.5% YoY, evidencing positive operating leverage. EBITDA margin of 11.0% and D&A of ¥461m (about 2.5% of sales) suggest limited depreciation drag and room for incremental margins as volumes scale.

Growth Assessment

revenue_sustainability: Top-line growth of 5.1% YoY suggests steady demand in core services. Sustainability depends on hiring sentiment, client advertising budgets, and competitive dynamics in online recruitment media. profit_quality: Operating income growth (+10.5% YoY) outpaced sales, indicating disciplined cost control or mix benefits. Net income grew 11.8% YoY to ¥1.10bn, with limited financing drag. outlook: If current demand conditions persist, continued modest growth with incremental margin expansion is plausible given the operating leverage profile. Key sensitivities are macro labor market cycles, client churn, and pricing in a competitive market.

Financial Health

liquidity: Current assets ¥4.27bn vs current liabilities ¥2.30bn yields a current ratio of 1.86x and quick ratio of 1.86x (inventories not disclosed). Working capital is ~¥1.97bn, indicating ample short-term coverage. solvency: Total liabilities ¥2.57bn vs equity ¥4.63bn implies a conservative capital structure (equity ratio inferred at ~59.9% despite the reported 0.0% figure). Interest coverage is ~173.6x, signaling minimal debt-servicing pressure. capital_structure: Debt-to-equity of 0.55x here appears to reflect total liabilities to equity; interest-bearing debt is not separately disclosed. Leverage is modest, aligning with the strong coverage metrics.

Cash Flow Quality

earnings_quality: OCF/Net income is 1.85x (¥2.03bn/¥1.10bn), indicating high cash conversion and low accrual reliance. D&A of ¥461m provides a non-cash buffer underpinning EBITDA. FCF_analysis: Free cash flow was ¥1.69bn (OCF ¥2.03bn minus net investing cash outflow ¥0.34bn). OCF margin is ~10.9% and FCF margin is ~9.1%, both healthy for a service business. working_capital: The OCF outperformance versus net income likely reflects favorable working capital movements alongside non-cash charges, though itemized AR/AP changes are not disclosed. Sustaining these dynamics is key to maintaining high cash conversion.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are not disclosed in the provided data (zeros should be treated as undisclosed). Therefore, we cannot assess payout against EPS of ¥209.67. FCF_coverage: With dividends undisclosed, FCF coverage cannot be computed. From a capacity standpoint, FCF of ¥1.69bn appears robust relative to earnings, but actual distribution needs are unknown. policy_outlook: No dividend policy information is provided here. Future distributions will depend on management policy, capital needs, and market conditions.

Risk Assessment

Business Risks:

• Cyclical exposure to hiring activity and corporate advertising budgets
• Intense competition from large recruitment platforms and job boards
• Client concentration or sector concentration risk in tech/white-collar hiring
• Potential pricing pressure and higher customer acquisition costs
• Regulatory changes impacting labor intermediation and advertising
• Operational dependence on talent acquisition and retention of sales/editorial staff
• Digital platform execution risk (traffic, conversion, algorithm changes)

Financial Risks:

• Working capital swings affecting cash flow timing
• Limited disclosure of cash balance and debt profile
• Potential increase in marketing or technology investments compressing margins
• Small-company scale risk amplifying earnings volatility

Key Concerns:

• Data gaps: equity ratio, cash balance, share count, and dividends not disclosed
• Sustainability of positive working capital tailwinds supporting OCF
• Exposure to macro softness in hiring and recruitment advertising

Investment Implications

Key Takeaways:

• ROE of 23.77% supported by strong asset turnover and moderate leverage
• Positive operating leverage with operating income growth exceeding revenue growth
• High cash conversion (OCF/NI 1.85x) and solid FCF generation
• Healthy liquidity with current ratio of 1.86x and low interest burden
• Margins consistent with an asset-light service model
• Several important disclosures (cash, dividend, share count) are missing

Metrics to Watch:

• Revenue growth versus job postings and client count/ARPU
• Operating margin and EBITDA margin trajectory
• OCF/NI ratio and working capital days (DSO/DPO)
• Capex and product/platform investment needs
• Client retention/churn and sales pipeline indicators
• Any updates on dividend policy and capital allocation

Relative Positioning: Within Japanese HR/recruitment media peers, the company exhibits high ROE, lean leverage, and strong cash conversion, positioning it favorably on efficiency and balance sheet prudence, albeit with scale and disclosure limitations compared to larger listed competitors.

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