ROXX,inc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥4.51B
• Operating Income: ¥-721M
• Net Income: ¥1.05B
• EPS: ¥144.55

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

ROXX reported strong top-line growth in FY2025 Q4 with revenue of ¥4,513 million, up 29.8% YoY, but profitability at the operating level remained negative. Gross profit was ¥2,980 million, implying a high gross margin of 66.0%, consistent with a service-heavy cost structure. Operating income was a loss of ¥721 million (operating margin approximately -16.0%), flat YoY, indicating limited operating leverage despite scale. Ordinary income was a loss of ¥767 million, reflecting ongoing operating and financial cost burdens. Notably, net income turned positive at ¥1,051 million despite operating losses, implying the presence of material non-operating or extraordinary gains and minimal taxes (effective tax rate near 0%). EPS was reported at 144.55, but outstanding shares information was not disclosed, limiting per-share analysis. Cash flow from operations was negative at ¥1,023 million, highlighting weak cash conversion and indicating that earnings quality is poor relative to accounting profit. Investing cash flow was a large inflow of ¥1,669 million, likely from asset disposals or investment redemptions rather than routine capex, which supported positive free cash flow of ¥646 million on a headline basis. Financing cash flow was an inflow of ¥788 million, suggesting reliance on external funding (debt or equity) to bridge operating cash burn. Total assets stood at ¥5,625 million and total equity at ¥1,955 million; this implies an inferred equity ratio around 34.7%, despite a reported 0.0% figure that appears undisclosed. Liquidity looks adequate with a current ratio of 193.7% and working capital of ¥1,722 million, providing a buffer against near-term cash needs. Leverage measured by liabilities-to-equity is 1.43x, and interest expense was modest at ¥25.6 million, but interest coverage based on EBITDA is deeply negative (-28.1x), reflecting weak underlying earnings. DuPont metrics show a high ROE of 53.76% driven by a 23.29% net margin, 0.802x asset turnover, and 2.88x financial leverage; however, this ROE is not representative of core performance due to one-time gains and negative operating profitability. The company paid no dividend (DPS ¥0, payout 0%), which is consistent with cash preservation amid operating losses. Overall, ROXX is growing revenue rapidly with a high gross margin base, but the business has yet to translate scale into sustainable operating profits or positive OCF. The FY2025 headline profitability and ROE are distorted by non-recurring items, and the investment and financing inflows mask underlying cash burn.

Profitability Analysis

ROE_decomposition: Calculated ROE is 53.76% = Net Profit Margin (23.29%) × Asset Turnover (0.802x) × Financial Leverage (2.88x). The elevated net margin is inconsistent with operating losses and likely reflects non-operating/extraordinary gains. Asset turnover at 0.80x is reasonable for a light-asset model. Leverage at 2.88x (Assets/Equity) amplifies ROE but also risk. margin_quality: Gross margin is high at 66.0%, indicating a scalable service/platform cost structure. Operating margin is approximately -16.0% (operating loss ¥721 million on revenue ¥4,513 million), showing insufficient scale to cover fixed costs such as personnel, R&D, and SG&A. Ordinary margin is about -17.0%. The positive net margin (23.29%) is non-core and almost certainly driven by one-offs given negative OCF and EBITDA. operating_leverage: Revenue grew 29.8% YoY but operating loss was flat YoY, indicating weak operating leverage to date. Depreciation and amortization were only ¥14 million, so negative EBITDA of ¥707 million reflects operating cost intensity rather than heavy non-cash charges. To achieve breakeven, meaningful SG&A efficiency gains or sustained gross profit growth are required.

Growth Assessment

revenue_sustainability: Revenue of ¥4,513 million (+29.8% YoY) suggests solid demand momentum. The high gross margin supports a scalable model, but sustainability depends on retention, pricing power, and acquisition cost efficiency (not disclosed). profit_quality: Core profit quality is weak: operating loss (¥721 million), ordinary loss (¥767 million), negative EBITDA (¥707 million), and negative OCF (¥1,023 million) indicate that reported net income was boosted by non-operating items. Effective tax rate near 0% supports the view of non-recurring gains and loss carryforwards. outlook: If revenue growth persists at high double digits and cost discipline improves, operating losses could narrow. However, absent evidence of OCF improvement and recurring profitability, near-term growth is likely to remain investment-heavy with cash burn funded by asset sales (investing inflow) and external financing.

Financial Health

liquidity: Current assets ¥3,559 million vs current liabilities ¥1,837 million yields a current ratio of 193.7% and quick ratio equivalent, indicating ample near-term liquidity. Working capital is ¥1,722 million, providing runway despite operating cash burn. solvency: Total liabilities are ¥2,792 million against equity of ¥1,955 million (liabilities-to-equity ~1.43x). Inferred equity ratio is about 34.7% (equity/assets), despite a reported 0.0% figure that appears undisclosed. Interest expense of ¥25.6 million is manageable in absolute terms, but EBITDA coverage is -28.1x, signaling dependence on non-operating sources to meet obligations. capital_structure: Financial leverage (Assets/Equity) is 2.88x. The company also received ¥788 million of financing inflows, suggesting incremental leverage or equity injection. Without positive OCF, continued external funding may be necessary.

Cash Flow Quality

earnings_quality: OCF/Net Income is -0.97, indicating that accounting earnings are not converting to cash; positive net income was likely driven by non-cash or non-operating gains. EBITDA is negative despite positive net income, reinforcing low earnings quality. FCF_analysis: Free cash flow reported at ¥646 million is driven by a ¥1,669 million investing cash inflow (likely asset disposals or investment redemptions). This is not a sustainable source of FCF. Core FCF (OCF minus maintenance capex) is likely negative given OCF of -¥1,023 million. working_capital: Specific WC components are undisclosed; however, negative OCF suggests outflows tied to receivables growth, prepayments, or reduced payables alongside operating losses. Monitoring DSO/DPO trends will be important when disclosed.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0.00 with a payout ratio of 0.0%, appropriate given operating losses and negative OCF. FCF_coverage: Headline FCF coverage is not meaningful as FCF is driven by one-off investing inflows; core FCF coverage of dividends would be insufficient if any dividend were attempted. policy_outlook: Given growth investment needs, operating losses, and reliance on financing, continuation of a no-dividend policy is the most plausible near term until sustained positive OCF and operating profit are achieved.

Risk Assessment

Business Risks:

• Execution risk in scaling operations to achieve operating breakeven despite high gross margins
• Dependence on potentially volatile non-operating gains to support net income
• Customer acquisition cost and retention risks that could pressure gross profit (details undisclosed)
• Competitive intensity in core markets, risking pricing power and margin
• Operational scalability and fixed-cost absorption risk leading to persistent EBITDA losses

Financial Risks:

• Negative operating cash flow (-¥1,023 million) requiring continued financing or asset sales
• Weak interest coverage (EBITDA/interest -28.1x) despite modest absolute interest expense
• Leverage and reliance on financing inflows (¥788 million) to sustain operations
• Potential variability in non-operating/extraordinary income that inflated ROE and net income
• Liquidity risk if working capital swings or growth investment intensify cash needs

Key Concerns:

• Quality of earnings: positive net income alongside negative EBITDA and OCF
• Sustainability of investing cash inflows that currently support FCF
• Lack of visibility on cash and share count due to undisclosed items, limiting per-share and liquidity analyses

Investment Implications

Key Takeaways:

• Strong revenue growth (+29.8% YoY) with high gross margin (66.0%) indicates a scalable model
• Core profitability remains weak: operating loss ¥721 million and EBITDA -¥707 million
• Positive net income (¥1,051 million) appears driven by non-recurring items; ROE of 53.76% is not reflective of core operations
• OCF is negative (-¥1,023 million); headline FCF positive only due to investing inflows
• Liquidity is adequate (current ratio 193.7%), but continued financing support (¥788 million inflow) underscores funding needs

Metrics to Watch:

• Operating cash flow trajectory and conversion of gross profit to cash
• Operating margin and EBITDA margin progression toward breakeven
• Composition of investing cash flows (recurring capex vs asset sales/one-offs)
• Leverage and interest coverage, including any increase in interest-bearing debt
• Working capital efficiency (DSO/DPO/advance billings) once disclosed

Relative Positioning: Relative to typical TSE growth-stage service companies, ROXX exhibits above-average revenue growth and gross margin but below-average operating profitability and cash conversion, with a funding profile reliant on non-operating and financing inflows.

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