WILL,Co.,Ltd. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥10.15B
• Operating Income: ¥923M
• Net Income: ¥376M
• EPS: ¥48.80

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

For FY2025 Q3 (consolidated, JGAAP), Will Co., Ltd. (32410) delivered solid top-line expansion and disproportionately stronger profit growth, indicating meaningful operating leverage. Revenue reached ¥10,149 million, up 18.5% YoY, while operating income rose 45.6% YoY to ¥923 million and net income increased 49.6% YoY to ¥563 million. The DuPont bridge indicates a reported/derived ROE of 10.61%, built from a 5.55% net margin, 0.668x asset turnover, and 2.86x financial leverage. Operating margin of approximately 9.10% (¥923m/¥10,149m) outpaced revenue growth, suggesting either improved gross margins, tighter SG&A discipline, favorable mix, or execution benefits. Ordinary income was ¥833 million, implying some non-operating costs (notably interest of ¥45 million) but still strong coverage at 20.5x. Using income tax expense of ¥182 million against ordinary income as a proxy, the implied effective tax rate is about 21–22%, which is reasonable for a domestic filer and preferable to the displayed 0.0% metric that appears to be an undisclosed placeholder. The company’s balance sheet shows total assets of ¥15,199 million and equity of ¥5,308 million, implying an equity ratio of roughly 34.9% and financial leverage of 2.86x. Liquidity appears healthy with a current ratio of 1.46x (¥9,662m/¥6,628m) and working capital of ¥3,034 million. The reported gross profit margin is 13.0%; however, there is an apparent mismatch among revenue, cost of sales, and gross profit figures, which may reflect account classification differences under JGAAP or segment presentations. Despite this, the sustained expansion in operating income suggests underlying profitability improved during the period. Cash flow statements are not disclosed in this dataset (zeros indicate not reported), limiting the ability to assess cash conversion and free cash flow durability. Debt-to-equity is 1.95x, consistent with a moderately leveraged profile for a real estate-related business, yet comfortably serviced given the high interest coverage. EPS is ¥48.80, with implied shares outstanding of roughly 11.53 million based on reported net income, though official share count is not disclosed here. Dividend data are not provided; thus payout and FCF coverage cannot be assessed from this set. Overall, the quarter reflects robust earnings momentum, healthy ROE, and solid liquidity, while the lack of cash flow disclosure and certain presentation inconsistencies warrant monitoring. The outlook hinges on sustaining margin discipline and maintaining strong coverage metrics against a backdrop of sector cyclicality and interest-rate sensitivity.

Profitability Analysis

ROE of 10.61% is decomposed into a 5.55% net margin, 0.668x asset turnover, and 2.86x financial leverage, indicating a balanced contribution from efficiency and leverage alongside improved profitability. Operating margin is about 9.10% (¥923m/¥10,149m), significantly above the net margin due to interest and taxes, yet strong enough to deliver 45.6% YoY operating income growth on 18.5% revenue growth (positive operating leverage). The reported gross margin is 13.0%, but header-line components appear inconsistently mapped; nonetheless, the operating result implies either gross margin tailwinds or SG&A efficiency. Ordinary margin stands near 8.21% (¥833m/¥10,149m), reflecting limited non-operating drag beyond interest. Interest coverage is robust at 20.5x (¥923m/¥45m), offering cushion against rate increases or earnings volatility. Implied effective tax rate is approximately 21–22% using disclosed income tax and ordinary income, in line with expectations. Overall, margin quality appears to be improving YoY, with evidence of operating leverage and disciplined cost control.

Growth Assessment

Revenue grew 18.5% YoY to ¥10,149 million, signaling healthy demand and/or effective pricing and mix. Operating income rose 45.6% YoY to ¥923 million, indicating strong incremental margins and operating leverage. Net income growth of 49.6% to ¥563 million underscores improved conversion of sales into earnings after financing and tax. Asset turnover of 0.668x suggests reasonable capital efficiency for the business model, supporting ROE alongside leverage. The sustainability of revenue growth will depend on transaction volumes, pipeline visibility, and macro conditions (housing demand, rates). Profit quality appears strong at the operating level, but confirmation via cash flows is not possible due to undisclosed OCF/FCF. With an implied effective tax rate around 21–22% and limited non-operating headwinds, earnings run-rate looks credible if current demand and cost discipline persist. Near-term outlook hinges on maintaining the elevated operating margin while navigating potential market normalization.

Financial Health

Total assets are ¥15,199 million and total equity is ¥5,308 million, implying an equity ratio of roughly 34.9% and leverage (assets/equity) of 2.86x. Total liabilities of ¥10,371 million equate to a debt-to-equity proxy of 1.95x (all liabilities vs equity), a moderate-to-elevated level typical for the sector. Current assets of ¥9,662 million and current liabilities of ¥6,628 million yield a current ratio of 1.46x and working capital of ¥3,034 million, indicating sound short-term liquidity. The quick ratio is effectively the same at 1.46x due to minimal reported inventories (¥12 million). Interest expense of ¥45 million is well covered by operating income (20.5x), suggesting manageable solvency risk under current conditions. The combination of a mid-30% equity ratio and strong coverage provides a stable financial base, though sensitivity to financing conditions remains a consideration.

Cash Flow Quality

Operating, investing, and financing cash flows are undisclosed in this dataset (zeros indicate not reported), preventing direct assessment of cash conversion and free cash flow. As a result, the OCF/Net Income ratio and FCF metrics shown as zero should be treated as not available rather than actual results. Earnings quality therefore cannot be corroborated via cash flow in this period. Working capital appears ample (¥3,034 million), and minimal reported inventories suggest limited capital tied in stock; however, without OCF details, we cannot determine whether receivables or other current assets expanded in line with sales or absorbed cash. Future disclosures should be used to validate whether the step-up in operating income translates into sustainable operating cash flow and free cash flow after maintenance investments.

Dividend Sustainability

Dividend data (DPS, payout ratio, and FCF coverage) are not disclosed in this dataset, so dividend sustainability cannot be evaluated directly. EPS is ¥48.80 for the period, but without an announced DPS or free cash flow, coverage analysis is not possible. If the company maintains or initiates dividends, assessment should focus on payout ratio relative to full-year EPS, FCF coverage once OCF/Capex are disclosed, and balance sheet flexibility (equity ratio ~34.9%, interest coverage 20.5x). Current liquidity and coverage are supportive of flexibility, but policy insight requires management guidance and historical payout practices.

Risk Assessment

Business Risks:

• Exposure to real estate market cycles and transaction volumes affecting brokerage, development, or related revenues
• Interest-rate sensitivity impacting financing costs, valuations, and customer affordability
• Margin volatility due to product mix, pricing, and cost inflation in materials/services
• Dependence on pipeline/backlog conversion and timing of closings
• Competitive intensity in real estate services potentially pressuring fees and spreads
• Regulatory and tax changes affecting property transactions or housing policy

Financial Risks:

• Moderate-to-elevated leverage (liabilities/equity ~1.95x) increases sensitivity to earnings shocks
• Refinancing and rate-reset risk if a portion of debt is variable-rate or maturing near-term
• Limited visibility on cash generation due to undisclosed OCF and capex
• Potential working capital swings tied to deal timing and receivables collection
• Concentration risk if reliant on specific regions or asset classes within real estate

Key Concerns:

• Cash flow statements not disclosed, limiting validation of earnings quality and FCF
• Apparent mismatch among revenue, cost of sales, and gross profit figures suggesting presentation or mapping differences
• Dividend policy and payout capacity not assessable from current data
• Sensitivity to macro conditions and interest rates despite currently strong interest coverage

Investment Implications

Key Takeaways:

• Strong operating leverage: revenue +18.5% YoY, operating income +45.6% YoY, net income +49.6% YoY
• ROE of 10.61% driven by a 5.55% net margin, 0.668x asset turnover, and 2.86x leverage
• Healthy liquidity (current ratio 1.46x) and robust interest coverage (20.5x) support resilience
• Equity ratio around 34.9% indicates a balanced capital structure for the sector
• Cash flow and dividend details are not disclosed, constraining assessment of cash conversion and payout capacity

Metrics to Watch:

• Operating cash flow and free cash flow once disclosed (OCF/NI conversion)
• Gross margin and SG&A ratio to confirm sustained margin gains
• Order intake/pipeline, contract closures, and transaction volumes
• Interest coverage and effective tax rate stability
• Equity ratio and debt maturity profile amid rate environment
• EPS trajectory and any dividend policy updates

Relative Positioning: Relative to domestic real estate services peers, the company exhibits healthy ROE, solid liquidity, and strong interest coverage, with leverage in a typical range; confirmation of cash conversion and consistent gross margin reporting will be key to solidifying its quality profile.

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