Sapeet Inc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥996M
• Operating Income: ¥55M
• Net Income: ¥70M
• EPS: ¥45.25

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

Sapeet (269A0) reported strong topline growth in FY2025 Q4 on a standalone JGAAP basis, with revenue of ¥996.0m, up 56.9% YoY. Reported gross profit was ¥382.4m, implying a 38.4% gross margin; however, the disclosed cost of sales of ¥252.6m does not reconcile with the reported gross profit, suggesting partial classification differences or non-disclosed cost items in the cost of sales line. Operating income rose to ¥55.0m (+48.6% YoY), indicating positive operating leverage despite investment needs. Ordinary income was ¥45.0m, below operating income due to ¥4.2m in interest expense and other non-operating items, while net income printed at ¥70.0m (+16.2% YoY), implying the presence of non-operating or extraordinary gains and a minimal tax burden. EPS was ¥45.25, but outstanding shares are unreported, limiting per-share cross-checks. The DuPont profile is solid for an early-stage growth company: net margin of 7.03%, asset turnover of 1.668x, and financial leverage of 1.20x together yield a calculated ROE of 14.06%, matching the reported figure. EBITDA was ¥64.0m (6.4% margin), consistent with operating income plus ¥9.0m depreciation, supporting the quality of operating profitability. Cash conversion is weaker: operating cash flow (OCF) of ¥45.0m represents 0.64x of net income, and free cash flow (FCF) was negative ¥57.0m due to ¥102.0m in investing outflows, likely reflecting growth investments. Liquidity is adequate with a current ratio and quick ratio of 116.2% and working capital of ¥46.2m, though the absence of disclosed cash restricts granularity. Capital structure appears moderate with a debt-to-equity ratio of 0.57x; current liabilities account for all reported liabilities, indicating short-term funding reliance. The equity ratio was not disclosed (listed at 0.0%), and balance sheet subtotals do not fully reconcile (Total assets vs equity plus liabilities), so interpretations should focus on directional insights rather than exact levels. Interest coverage is comfortable at 13.1x, suggesting manageable financing costs. The effective tax rate rounds to 0.0%, likely reflecting NOL utilization or tax credits/valuation allowance effects. The dividend remains nil (DPS ¥0, payout 0%), consistent with reinvestment of earnings during a growth phase; negative FCF also constrains distributions near term. Overall, Sapeet is demonstrating healthy revenue momentum, improving operating leverage, and double-digit ROE, but with weaker cash conversion, negative FCF driven by investment, and some disclosure gaps that warrant monitoring.

Profitability Analysis

ROE decomposes to a 7.03% net margin, 1.668x asset turnover, and 1.20x leverage, delivering 14.06% ROE. The net margin of 7.03% is solid for a company investing for growth and reflects operating profitability (operating margin ~5.5%) plus the impact of non-operating items and a low tax burden. Reported gross margin is 38.4% based on gross profit of ¥382.4m; note the disclosed cost of sales (¥252.6m) does not reconcile with this margin, implying other cost lines may be captured outside cost of sales. EBITDA of ¥64.0m (6.4% margin) and operating income of ¥55.0m indicate positive operating leverage compared to revenue growth, though the YoY delta in operating income (+48.6%) trails revenue growth (+56.9%), suggesting increased operating expenses to support scale. Interest expense of ¥4.2m is modest relative to EBIT, with a 13.1x coverage ratio, confirming profitability headroom. Ordinary income (¥45.0m) is below operating income due to net non-operating costs, but net income (¥70.0m) is elevated, likely from extraordinary gains or tax effects, which may not be recurring. The effective tax rate rounds to 0.0%, supportive to margins but potentially non-recurring. Overall margin quality is acceptable but shows mixed signals due to the gross profit/cost of sales mismatch and the reliance on below-OP items for bottom-line strength.

Growth Assessment

Revenue expanded 56.9% YoY to ¥996.0m, indicating strong demand and/or successful go-to-market execution. Operating income grew 48.6% YoY to ¥55.0m, confirming operating leverage, albeit with some reinvestment drag as opex scaled with growth. Net income growth of 16.2% to ¥70.0m is positive but appears supported by non-operating and/or extraordinary items and a minimal tax burden, which may not recur at the same magnitude. Asset turnover at 1.668x suggests efficient utilization of the asset base to drive sales, supportive of sustainable growth. OCF of ¥45.0m lagged net income (0.64x), indicating weaker cash conversion, which could be attributable to working capital build alongside rapid growth. Investing outflows of ¥102.0m point to continued capacity and product investment, which, if executed well, should underpin medium-term top-line expansion. With financing inflows of ¥49.0m offsetting negative FCF, the company is funding growth while maintaining liquidity. Outlook-wise, sustaining 30%+ revenue growth would likely require continued investment, disciplined cost control, and improved cash conversion to ease reliance on external funding. The margin trajectory should benefit from scale effects, but gross margin disclosure inconsistencies temper precision in forecasting.

Financial Health

Liquidity is adequate with current assets of ¥330.4m and current liabilities of ¥284.3m, yielding a current ratio/quick ratio of 116.2% and working capital of ¥46.2m. All liabilities appear current, suggesting limited long-term debt but a heavier reliance on short-term obligations. The debt-to-equity ratio of 0.57x indicates moderate leverage; interest serviceability is strong (13.1x coverage). Reported total assets are ¥597.0m vs total liabilities of ¥284.3m and total equity of ¥498.0m; these figures do not fully reconcile, implying classification or disclosure gaps. The equity ratio is listed as 0.0%, which should be treated as undisclosed rather than zero. In aggregate, solvency appears sound based on coverage and leverage metrics, but precise balance sheet strength is difficult to ascertain due to the noted inconsistencies.

Cash Flow Quality

OCF of ¥45.0m versus net income of ¥70.0m (OCF/NI = 0.64x) indicates weaker earnings-to-cash conversion, likely due to working capital investment consistent with rapid growth. Depreciation of ¥9.0m is modest relative to EBITDA, and earnings quality at the operating level appears reasonable; however, bottom-line support from non-operating/extraordinary items and minimal taxes reduces repeatability. Free cash flow was negative at -¥57.0m (OCF ¥45.0m minus investing CF of -¥102.0m), reflecting elevated growth investments. Financing inflows of ¥49.0m largely bridged the FCF gap, preserving liquidity. With cash and equivalents undisclosed (reported as 0), we cannot assess the cash buffer or net cash position precisely. Sustained improvement in OCF/NI and stabilization of working capital will be important to enhance cash flow quality.

Dividend Sustainability

No dividend was paid (DPS ¥0), with a payout ratio of 0.0%, consistent with a reinvestment-led strategy amid high growth. Given negative FCF (-¥57.0m) and reliance on financing inflows to support investments, near-term dividend capacity is limited. Coverage metrics are not applicable currently (FCF coverage 0.00x), and undisclosed cash levels further limit visibility. Policy-wise, the company appears focused on growth and strengthening its operating base; any introduction of dividends would likely follow sustained positive FCF and improved cash conversion.

Risk Assessment

Business Risks:

• Execution risk in scaling operations while maintaining margin discipline amid rapid revenue growth (+56.9% YoY).
• Potential non-recurring nature of below-operating items supporting net income (extraordinary gains/tax effects).
• Pricing and cost management risk given uncertainty around true cost of sales composition and gross margin.
• Customer concentration or demand volatility risk typical for high-growth, smaller-scale companies.
• Product development and investment risk given ¥102.0m investing outflows and the need for returns on capital.

Financial Risks:

• Weaker cash conversion (OCF/NI 0.64x) and negative FCF (-¥57.0m), implying dependence on external funding.
• Short-term funding reliance with all liabilities classified as current, elevating refinancing/liquidity risk.
• Disclosure inconsistencies in the balance sheet and gross profit vs cost of sales, which hinder precise risk assessment.
• Interest rate risk is modest but present given interest expense of ¥4.2m and the need to finance investments.
• Tax normalization risk from a near-zero effective tax rate potentially rising over time.

Key Concerns:

• Mismatch between reported gross profit and cost of sales, affecting margin interpretation.
• OCF trailing net income and negative FCF driven by investment outflows.
• Balance sheet reconciliation gaps and undisclosed cash position limiting visibility.

Investment Implications

Key Takeaways:

• Strong top-line growth (+56.9% YoY) with improving operating leverage (OP income +48.6% YoY).
• Solid DuPont profile with 14.06% ROE driven by 7.03% net margin and 1.668x asset turnover.
• Cash conversion is a weak point (OCF/NI 0.64x) and FCF is negative due to heavy investment.
• Liquidity is adequate (current ratio 116.2%) but relies on short-term liabilities.
• Disclosure gaps (gross profit vs cost of sales; balance sheet reconciliation; undisclosed cash) constrain precision.

Metrics to Watch:

• OCF/Net income ratio and working capital changes to gauge cash conversion.
• Sustained EBITDA margin expansion and operating income growth vs revenue growth for operating leverage.
• Capex/investing outflows vs revenue growth to assess efficiency of growth investments.
• Interest coverage and the mix of current vs non-current liabilities for refinancing risk.
• Effective tax rate normalization and the recurrence of non-operating/extraordinary gains.

Relative Positioning: Within high-growth TSE-listed peers of similar scale, Sapeet exhibits above-average revenue growth and a competitive ROE, offset by weaker cash conversion and heavier reliance on short-term funding; disclosure completeness is below best-in-class, tempering visibility despite encouraging operating momentum.

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