Schoo,inc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥3.36B
• Operating Income: ¥290M
• Net Income: ¥175M
• EPS: ¥14.31

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

Schoo reported FY2025 Q4 (JGAAP, non-consolidated) results showing solid top-line expansion and a sharp rebound in operating profitability. Revenue rose 17.8% YoY to ¥3,360m, consistent with sustained demand in its e-learning/services franchise. Gross profit reached ¥1,957.7m, implying a robust gross margin of 58.3%, indicative of a scalable, content/software-heavy business model. Operating income surged 149.8% YoY to ¥290m as operating leverage kicked in, reflecting disciplined cost control and scale benefits. Ordinary income came in at ¥258m, slightly below operating income due to non-operating costs, including ¥22.5m in interest expense. Net income was ¥175m, down 4.9% YoY despite improved operations, suggesting headwinds below operating profit (e.g., higher financing costs or the absence of prior-period one-offs); the tax line shows a net tax benefit (income tax: -¥97.0m), which partially cushioned bottom line. DuPont analysis points to an ROE of 9.43%, supported by a 5.21% net margin, asset turnover of 0.976x, and financial leverage of 1.86x. Liquidity appears strong with a current ratio of 207% and working capital of ¥1,181.7m, providing ample runway for operations. Solvency is moderate: debt-to-equity is 0.95x, and interest coverage is 12.9x, pointing to manageable leverage at current earnings levels. Cash flow quality is healthy; OCF of ¥249m was 1.42x net income, and FCF was positive at ¥114m after ¥135m of investing outflows. Financing cash inflow of ¥786m suggests incremental funding (likely borrowings or hybrid funding given no share data disclosed), bolstering liquidity. No dividend was declared (DPS ¥0.00), consistent with reinvestment and growth focus; FCF coverage of dividends is therefore not a constraint. Effective tax burden appears low this period due to the recorded tax benefit, which may not be recurring and should be monitored for normalization. The company’s high gross margin, improving operating margin, and positive FCF support the quality of earnings narrative. Data limitations exist: certain items (e.g., cash and equivalents, equity ratio, share counts) are unreported in this disclosure and should not be interpreted as zero values. Overall, the profile is of a growing, asset-light business with improving operating metrics, moderate leverage, and adequate liquidity, though bottom-line volatility from non-operating items and taxes warrants attention.

Profitability Analysis

ROE_decomposition: ROE 9.43% = Net margin 5.21% × Asset turnover 0.976× × Financial leverage 1.86×. Net profitability is modest but improving operationally; leverage provides a meaningful but not excessive boost to ROE. margin_quality: Gross margin of 58.3% underscores a scalable, content/software-driven model. Operating income of ¥290m implies an operating margin of roughly 8.6% (290/3,360), up sharply YoY, reflecting operating leverage as revenue scales. Net margin of 5.21% trails operating margin due to non-operating costs (interest expense ¥22.5m) and the mix of other non-operating items; a tax benefit (-¥97.0m) mitigated the decline below the line. operating_leverage: Operating income +149.8% YoY on revenue +17.8% indicates strong flow-through, likely from fixed-cost dilution and disciplined opex. EBITDA of ¥291.9m (margin 8.7%) is close to operating income due to minimal D&A (¥1.9m), consistent with an asset-light profile.

Growth Assessment

revenue_sustainability: Revenue grew 17.8% YoY, consistent with healthy demand and likely expansion in enterprise subscriptions and content uptake. The high gross margin suggests pricing power and/or favorable product mix. profit_quality: Operating profit growth outpaced sales, evidencing improved efficiency and scale. However, ordinary income lagged operating income due to non-operating costs, and net income fell 4.9% YoY despite a tax benefit, implying some below-the-line pressures versus the prior year. outlook: With strong liquidity and positive FCF, the company is positioned to continue investing in content and sales capacity. Sustaining double-digit revenue growth with continued operating leverage could support further margin expansion, though normalization of taxes and financing costs may cap net margin gains. Monitoring customer retention, enterprise expansion, and cost discipline will be key to sustaining the growth trajectory.

Financial Health

liquidity: Current assets ¥2,283.1m vs. current liabilities ¥1,101.4m yield a current ratio of 207% and quick ratio of 207% (inventories unreported), indicating strong short-term coverage. Working capital stands at ¥1,181.7m, providing operational flexibility. solvency: Total liabilities ¥1,765.4m vs. total equity ¥1,855.0m result in a debt-to-equity ratio of 0.95x, a moderate leverage level. Interest coverage of 12.9x suggests interest costs are well covered by operating earnings. capital_structure: Financial leverage of 1.86× implies moderate use of liabilities relative to equity. Financing CF inflow of ¥786m indicates the company augmented its capital base during the period, likely via debt given lack of share data disclosure.

Cash Flow Quality

earnings_quality: OCF of ¥249m vs. net income of ¥175m (OCF/NI 1.42x) indicates solid earnings-to-cash conversion. The tax benefit supports net income this period; cash conversion remains healthy even adjusting for that. FCF_analysis: FCF was ¥114m after ¥135m of investing outflows, demonstrating capacity to self-fund growth investments at current profitability. EBITDA of ¥291.9m comfortably covers investing needs. working_capital: Positive OCF alongside strong working capital suggests effective receivables and payables management. With inventories unreported, cash generation is primarily driven by service/subscription dynamics rather than physical goods.

Dividend Sustainability

payout_ratio_assessment: No dividend declared (DPS ¥0.00; payout ratio 0.0%), consistent with reinvestment during a growth and scaling phase. With net income at ¥175m, the balance sheet could theoretically support a payout, but management appears to prioritize growth. FCF_coverage: Given FCF of ¥114m and no dividends, coverage is ample. The company retains cash flow for expansion and potential balance sheet strengthening. policy_outlook: Assuming continued double-digit growth and stable operating leverage, dividend initiation would most likely follow sustained profitability and visibility on recurring cash flows; near-term focus likely remains on reinvestment.

Risk Assessment

Business Risks:

• Customer concentration or contract renewal risk in enterprise learning subscriptions
• Churn and retention risk in B2C segments impacting recurring revenue
• Content relevance and platform competitiveness versus domestic and global e-learning providers
• Execution risk in scaling sales and customer success without inflating CAC
• Regulatory or compliance changes affecting corporate training budgets

Financial Risks:

• Moderate leverage (D/E 0.95x) with exposure to interest rate increases (interest expense ¥22.5m)
• Potential normalization of tax benefits, raising effective tax rate and reducing net margin
• Reliance on continued positive working capital dynamics to sustain OCF
• Potential refinancing needs if financing inflows (¥786m) were debt

Key Concerns:

• Net income declined 4.9% YoY despite strong operating improvement, pointing to below-the-line pressures
• Ordinary income below operating income indicates ongoing non-operating drag
• Tax benefit may be non-recurring, risking lower future net margins

Investment Implications

Key Takeaways:

• Top-line growth of 17.8% YoY with strong 58.3% gross margin underscores a scalable model
• Operating income up 149.8% YoY highlights operating leverage and cost discipline
• ROE at 9.43% supported by moderate leverage (1.86×) and near-1.0× asset turnover
• Liquidity is ample (current ratio 207%) and FCF positive (¥114m), enabling reinvestment
• Non-operating costs and tax normalization represent the main headwinds to net margin

Metrics to Watch:

• Revenue growth rate and net retention/churn (not disclosed)
• Operating margin progression and sales efficiency (e.g., CAC payback, not disclosed)
• Ordinary income trends versus operating income to track non-operating drag
• OCF/NI ratio sustainability and working capital movements
• Interest coverage and debt levels amid potential rate changes
• Effective tax rate normalization and any changes in deferred tax

Relative Positioning: Within domestic digital learning and SaaS-like education services, Schoo exhibits high gross margins, mid-to-high teens revenue growth, improving operating margins, and ROE in the high single digits, supported by moderate leverage and solid liquidity—competitive fundamentals, with below-the-line items and tax normalization as differentiators for bottom-line consistency.

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