Medical Data Vision Co.,Ltd. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥4.65B
• Operating Income: ¥95M
• Net Income: ¥-318M
• EPS: ¥1.46

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

Medical Data Vision Co., Ltd. (MDV) delivered FY2025 Q3 consolidated results showing solid top-line expansion but limited operating leverage. Revenue rose 12.7% year over year to ¥4.65bn, while operating income was flat at ¥95m, compressing the operating margin to roughly 2.0%. Gross profit of ¥3.06bn implies a robust gross margin of 65.7%, consistent with an asset-light, data/analytics-driven model, but the translation to operating profit remains modest due to elevated operating expenses. Ordinary income reached ¥106m, exceeding operating income, suggesting positive non-operating contributions (e.g., financial income or subsidies). Despite a reported tax benefit of ¥39m (negative tax), net income was only ¥55m, implying below-the-line losses (e.g., extraordinary losses) and/or non-controlling interest effects. The DuPont profile indicates a thin net margin of 1.18%, asset turnover of 1.014x, and financial leverage of 1.58x, resulting in an ROE of 1.90% (aligned with the reported figure). Liquidity appears strong with a current ratio of 216% and working capital of ¥1.67bn, supporting near-term obligations. Total liabilities of ¥1.59bn versus equity of ¥2.90bn (debt-to-equity 0.55x) points to a conservative balance sheet. Equity ratio was reported as 0.0% (undisclosed), but is mechanically about 63.2% based on provided totals. Operating, investing, and financing cash flows were undisclosed (shown as zero), constraining cash flow quality analysis; cash and equivalents were also undisclosed. No dividend was paid (DPS ¥0), and the payout ratio is 0%. Overall, MDV shows healthy growth and gross margins but muted earnings scalability in the quarter, with tax benefits offset by below-the-line items. The near-term focus is on restoring operating leverage by pacing SG&A and R&D investments relative to revenue growth. Balance sheet resilience provides flexibility, but the absence of cash flow disclosures limits visibility on earnings quality and FCF coverage. Key sensitivities include client adoption in hospitals/insurers, regulatory dynamics around healthcare data, and the mix shift toward recurring analytics subscriptions. Given data gaps (notably D&A, cash flows, share count, and equity ratio disclosure), conclusions are drawn primarily from income statement and selected balance sheet items, and should be revisited when full-year disclosures are available.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 1.18% (NI ¥55m / Revenue ¥4,650m)
• asset_turnover: 1.014x (Revenue ¥4,650m / Assets ¥4,586m)
• financial_leverage: 1.58x (Assets ¥4,586m / Equity ¥2,897m)
• calculated_ROE: 1.90% (matches reported)
• ROA: Approx. 1.19% (net margin 1.18% × asset turnover 1.014) margin_quality:
• gross_margin: 65.7% (¥3,055m / ¥4,650m) – strong, consistent with data/analytics model
• operating_margin: 2.0% (¥95m / ¥4,650m) – constrained by opex growth outpacing revenue
• ordinary_margin: 2.3% (¥106m / ¥4,650m) – indicates positive non-operating items
• net_margin: 1.18% – thin due to below-the-line items despite tax benefit operating_leverage: Negative in the period: revenue +12.7% YoY with flat operating income suggests SG&A (and/or R&D) grew roughly in line with or faster than sales. Sustained gross margin strength indicates leverage pressure resides below gross profit. tax_and_below_the_line: Income tax was negative (¥-39m), implying a tax benefit (e.g., deferred tax asset recognition), yet net income (¥55m) was below ordinary income (¥106m), pointing to extraordinary losses and/or minority interest impact.

Growth Assessment

revenue_sustainability: Double-digit growth (+12.7% YoY) suggests healthy demand for MDV’s healthcare data and analytics solutions, likely driven by ongoing hospital data onboarding, product cross-sell, and payer/provider analytics needs. profit_quality: Gross margin robustness underpins product value, but conversion to operating profit is weak due to elevated operating costs; recurring revenue share (not disclosed) will be key to sustained scalability. outlook: If opex growth is moderated relative to sales and mix shifts to higher-margin recurring subscriptions, operating leverage should improve. However, the quarter’s flat operating income signals near-term pressure on profitability despite top-line growth. Visibility would improve with disclosure on subscription ARR, churn, and cohort economics (not provided).

Financial Health

liquidity:

• current_ratio: 216.3% (Current assets ¥3,111m / Current liabilities ¥1,439m)
• quick_ratio: 216.3% (inventories undisclosed/zero), indicating strong short-term coverage
• working_capital: ¥1,672.9m solvency_and_capital_structure:
• total_assets: ¥4,586m
• total_liabilities: ¥1,594.6m
• total_equity: ¥2,897m
• debt_to_equity: 0.55x (total liabilities / equity)
• equity_ratio: Implied ~63.2% (¥2,897m / ¥4,586m), reported as 0.0% due to non-disclosure interest_coverage: Not assessable (interest expense undisclosed). Ordinary income covers operating expense base, but leverage is modest and balance sheet conservative.

Cash Flow Quality

earnings_quality: Unable to reconcile earnings to cash due to non-disclosure of operating cash flow and D&A (both shown as zero). EBITDA cannot be derived. free_cash_flow_analysis: FCF not computable (OCF and capex not disclosed). With an asset-light model, medium-term FCF potential is plausible if receivables are managed and opex scales, but evidence is lacking this quarter. working_capital_dynamics: Current assets significantly exceed current liabilities, suggesting a cushion; however, without AR/AP and OCF details, cash conversion cycle and collections risk cannot be assessed. OCF_to_NI_ratio: Reported 0.00 due to non-disclosure; no inference should be drawn.

Dividend Sustainability

payout_ratio_assessment: No dividend declared (DPS ¥0; payout 0%). Given low net margin (1.18%) and flat operating profit, capacity for distributions appears limited near term without clearer FCF visibility. FCF_coverage: Not assessable (FCF undisclosed). Any future dividend policy should be anchored to recurring FCF generation and cash balance, both not provided. policy_outlook: Likely continued reinvestment focus to drive scale and operating leverage in a data/analytics business; explicit policy not disclosed for the period.

Risk Assessment

Business Risks:

• Regulatory and policy changes affecting healthcare data usage and privacy in Japan
• Customer concentration risk among hospitals, insurers, and public-sector stakeholders
• Lengthy enterprise sales cycles and procurement delays in healthcare institutions
• Execution risk in onboarding new hospitals and expanding data coverage
• Competition from domestic and global health data/analytics providers
• Product mix risk between project-based services and recurring subscriptions
• Dependence on maintaining data quality, security, and compliance certifications

Financial Risks:

• Limited operating margin buffer; negative operating leverage observed this quarter
• Cash flow visibility is low due to non-disclosure of OCF/FCF and cash balance
• Potential volatility from extraordinary items and tax effects under JGAAP
• Working capital collection risk (AR) not assessable without disclosure
• Modest leverage from liabilities, though overall capital structure is conservative

Key Concerns:

• Flat operating income despite double-digit revenue growth
• Net income below ordinary income even with a tax benefit, implying below-the-line losses
• Absence of cash flow and D&A disclosure limits assessment of earnings quality
• Unclear recurring revenue metrics (ARR, churn, retention) impeding visibility on scalability

Investment Implications

Key Takeaways:

• Top-line growth strong (+12.7% YoY), but operating leverage presently negative
• Gross margin healthy at 65.7%, supporting long-term scalability if opex normalizes
• ROE is low at 1.90% due to thin net margin and modest leverage
• Balance sheet appears robust (implied equity ratio ~63%, current ratio 216%)
• Cash generation not verifiable this quarter due to non-disclosure of cash flows

Metrics to Watch:

• Operating margin trajectory and SG&A-to-sales ratio
• Subscription/recurring revenue mix (ARR, churn, net retention)
• D&A and capex to gauge true EBITDA and FCF conversion
• Accounts receivable days and cash conversion cycle
• Non-operating and extraordinary items affecting the bridge from ordinary to net income
• Cash and equivalents balance and OCF trend

Relative Positioning: Within Japan’s healthcare data/analytics and SaaS-adjacent cohort, MDV exhibits strong gross margins and a conservative balance sheet, but lags peers on operating margin scalability and ROE in the reported quarter.

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