CELSYS,Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥6.99B
• Operating Income: ¥2.24B
• Net Income: ¥1.36B
• EPS: ¥44.50

Income Statement

Balance Sheet

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

Celsys (36630) reported FY2025 Q3 standalone JGAAP results showing solid top-line growth and strong operating leverage. Revenue was ¥6,987 million, up 12.9% year over year, indicating continued demand for the company’s software offerings. Gross profit reached ¥4,199 million, implying a robust gross margin of 60.1%, consistent with an asset-light software model. Operating income rose to ¥2,236 million, up 35.1% YoY, materially outpacing revenue growth and evidencing operating leverage from fixed-cost containment and scale benefits. Ordinary income of ¥2,226 million tracked closely to operating income, suggesting minimal non-operating gains/losses. Net income was ¥1,360 million, with a net margin of 19.46%, flat YoY in absolute terms but healthy in efficiency terms. DuPont analysis yields ROE of 26.05%, driven primarily by a high net margin (19.46%), moderate asset turnover (0.878x), and measured financial leverage (1.52x). The balance sheet appears conservative with total assets of ¥7,958 million, total liabilities of ¥2,892 million, and implied debt-to-equity of 0.55x, underpinning solvency. Liquidity is strong: current assets of ¥6,052 million and current liabilities of ¥2,380 million yield a current ratio of 254.2% and working capital of ¥3,671 million. SG&A can be inferred at roughly ¥1,963 million (gross profit minus operating income), about 28.1% of revenue, suggesting disciplined expense management. EPS is ¥44.50, but share count data are unreported, limiting per-share cross-checks. Cash flow statement items (OCF/ICF/FCF) are unreported, so earnings-to-cash conversion cannot be evaluated from this dataset. Depreciation, interest expense, and taxes are also unreported; thus EBITDA, interest coverage, and effective tax rate metrics shown as zero are placeholders rather than economic values. The company paid no dividend (DPS ¥0.00), consistent with a reinvestment stance amid growth and high ROE. Overall, the quarter reflects high-quality profitability and cost control, conservative leverage, and ample liquidity, with the main analytical constraint being the absence of cash flow disclosures and some line items in this snapshot. Given these limitations, conclusions focus on the available non-zero data while flagging cash conversion and capex as key follow-ups.

Profitability Analysis

ROE_decomposition: Calculated ROE is 26.05%, derived from Net Profit Margin 19.46% × Asset Turnover 0.878 × Financial Leverage 1.52. The primary driver is the elevated net margin, supported by strong gross margin, with asset turnover and leverage making smaller but positive contributions. margin_quality: Gross margin stands at 60.1% (¥4,199m gross profit on ¥6,987m revenue), in line with a software license/subscription model. Operating margin is approximately 32.0% (¥2,236m/¥6,987m), indicating disciplined SG&A spend. Net margin of 19.46% confirms solid after-tax profitability; tax expense is unreported, so the underlying effective tax rate cannot be verified from this dataset. operating_leverage: Operating income growth of +35.1% YoY versus revenue growth of +12.9% signals significant operating leverage. Implied SG&A is ¥1,963m (about 28.1% of sales), suggesting scale benefits and cost control. Ordinary income closely tracking operating income indicates minimal dilution from non-operating items.

Growth Assessment

revenue_sustainability: Revenue growth of +12.9% YoY suggests healthy demand, likely supported by recurring subscription revenue and international expansion typical for the company’s products. profit_quality: Gross margin at 60.1% and operating margin near 32% support the view of high structural profitability. The absence of reported taxes, D&A, and interest limits full quality assessment; however, the tight spread between operating and ordinary income points to limited non-core income reliance. outlook: Given high ROE (26.05%) and operating leverage, continued mid-teens top-line growth could translate into outsized operating profit gains if cost discipline persists. Key determinants will be subscription retention/churn, pricing, distribution platform terms, and FX effects on overseas sales.

Financial Health

liquidity: Current assets ¥6,051.9m vs. current liabilities ¥2,380.4m yield a current ratio of 254.2% and quick ratio of 254.2% (inventories unreported), indicating strong short-term coverage. Working capital stands at ¥3,671.5m, providing operating flexibility. solvency: Total liabilities ¥2,891.7m against equity ¥5,221.0m imply a debt-to-equity ratio of 0.55x and financial leverage of 1.52x, reflecting a conservative capital structure. capital_structure: With ordinary income broadly equal to operating income and interest expense unreported, financial costs appear limited in this snapshot. Equity ratio is shown as 0.0% due to non-disclosure; based on assets and equity, the implied equity ratio would be approximately 65.6% (¥5,221m/¥7,958m), reinforcing balance-sheet strength.

Cash Flow Quality

earnings_quality: OCF and capex are unreported; thus, cash conversion cannot be assessed from this dataset. The strong margins and operating leverage suggest healthy underlying earnings power, but verification via OCF/NI and working-capital movements is pending. FCF_analysis: Free cash flow is unreported (displayed as zero). Given an asset-light software profile, structural capex needs are typically modest, but actual capex and FCF should be confirmed when detailed cash flow statements are available. working_capital: Current assets exceed current liabilities by ¥3,671.5m. Without a breakdown (e.g., receivables, deferred revenue, payables), we cannot assess collection cycles or deferred revenue trends; monitoring these will be key to understanding cash conversion.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0.00 and payout ratio is 0.0% per the dataset, indicating retention of earnings. With EPS of ¥44.50 and ROE of 26.05%, internal reinvestment appears accretive. FCF_coverage: FCF is unreported; therefore, dividend coverage by FCF cannot be evaluated. If future dividends are considered, confirmation of positive, recurring OCF and modest capex would be essential. policy_outlook: Given high profitability and growth, a retention-focused policy is plausible. Any shift toward dividends or buybacks would likely hinge on visibility of sustainable cash generation and growth investment needs.

Risk Assessment

Business Risks:

• Customer concentration in core creative software products (product concentration risk).
• Subscription retention and churn dynamics impacting recurring revenue.
• Distribution platform dependency (e.g., app stores) and potential fee/term changes.
• Competitive intensity from global creative software vendors and freemium alternatives.
• IP protection and piracy risk in international markets.
• FX volatility affecting overseas sales and pricing.
• Product roadmap execution risk (feature updates, cross-platform performance).

Financial Risks:

• Unreported cash flow figures obscure cash conversion and FCF visibility.
• Potential working-capital swings (receivables and deferred revenue) affecting OCF.
• Tax rate normalization risk given unreported tax expense in this snapshot.
• Limited disclosure on interest-bearing debt terms and coverage.
• Non-consolidated basis may omit exposures from affiliates or subsidiaries.

Key Concerns:

• Inability to validate OCF/FCF and capex from this dataset.
• EPS is reported but outstanding share count is unreported, limiting per-share analysis cross-checks.
• Equity ratio displayed as 0.0% despite strong implied equity, signaling disclosure gaps in this excerpt.

Investment Implications

Key Takeaways:

• Top-line growth of +12.9% YoY with strong gross margin of 60.1%.
• Operating income up +35.1% YoY, evidencing operating leverage and cost control.
• High ROE of 26.05% driven by margin strength and moderate leverage.
• Robust liquidity (current ratio 254.2%, working capital ¥3,671.5m).
• Ordinary income closely aligns with operating income, suggesting limited non-operating noise.
• Cash flow items unreported; cash conversion remains the principal analytical blind spot.
• No dividend (DPS ¥0.00); earnings are being retained amid growth.

Metrics to Watch:

• OCF/Net income and FCF once cash flow statements are available.
• Deferred revenue and subscriber churn/ARPU to assess recurring revenue durability.
• Receivables days and payables days for working-capital efficiency.
• Gross and operating margin trajectory as scale increases.
• Effective tax rate normalization and its impact on net margin.
• FX exposure and pricing actions in overseas markets.

Relative Positioning: Versus TSE-listed software peers, Celsys exhibits above-average profitability (60% gross margin, ~32% operating margin) and high ROE (~26%) with conservative leverage, positioning it favorably on quality metrics; the main differentiator to confirm is consistent cash conversion.

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