SHARINGTECHNOLOGY.INC FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥8.58B
• Operating Income: ¥2.07B
• Net Income: ¥1.44B
• EPS: ¥60.30

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

Sharing Technology Co., Ltd. (3989) delivered solid top-line and operating performance in FY2025 Q4 under IFRS, with revenue of 85.79 and operating income of 20.74, up 14.4% and 15.9% YoY, respectively. The model remains highly asset-light and margin-accretive, evidenced by an 80.1% gross margin and a 24.2% operating margin derived from disclosed figures. EBITDA was 22.87, implying a 26.7% EBITDA margin, with modest D&A of 2.13. Despite stronger operating results, net income declined 3.7% YoY to 14.13, suggesting adverse non-operating or below-the-line effects and/or normalization of tax, as the reported effective tax rate stands at 15.0%. Operating cash flow was robust at 19.81, exceeding net income (OCF/NI = 1.40x), underpinning healthy earnings quality and cash conversion. Free cash flow reached 16.15, translating to an estimated FCF margin of about 18.8%, even after modest capital expenditures of 0.14 and investing outflows of 3.66. The balance sheet is conservative with an equity ratio of 69.3% and total equity of 52.00, while cash and equivalents of 54.31 exceed total liabilities of 24.11, indicating a net cash posture on a headline basis. DuPont decomposition indicates strong profitability and capital efficiency: net margin 16.5%, asset turnover 1.154x, and financial leverage 1.43x yield a calculated ROE of approximately 27.2%. By contrast, several XBRL-reported ratios (e.g., ROE 0.3%, operating margin 0.2%, ordinary-income-based ROA 0.3%) appear inconsistent with the disclosed financials; we rely on the company’s primary statements and calculated metrics. Working capital dynamics show accounts receivable of 10.40 (DSO roughly mid-40s days by our estimate) and accounts payable of 10.76; the apparent DPO is inflated when benchmarked to the very low cost of sales due to the model’s high gross margin, and should be interpreted cautiously. Dividend capacity looks comfortable: the calculated payout ratio is 25.9% and FCF coverage is 4.41x, with dividends paid of 3.49 via cash flow. On a per-share basis, EPS (basic) was 60.30 yen; book value per share was about 217.29 yen (214.53 yen per XBRL). Revenue growth outpaced expense growth, confirming modest positive operating leverage, though net income contraction flags potential non-operating or tax-related headwinds. Liquidity appears ample, yet some short-term structure details (current liabilities, cash composition) are unreported, limiting precision on classic liquidity ratios. Overall, the quarter underscores strengthening core profitability and cash generation, supported by a cash-rich, lowly levered balance sheet, albeit with some disclosure gaps and reported-ratio anomalies in the XBRL.

Profitability Analysis

ROE_decomposition: DuPont: Net profit margin 16.5% × Asset turnover 1.154 × Financial leverage 1.43x ≈ 27.2% ROE (calculated). margin_quality: - Gross margin: 80.1% (68.71/85.79), reflecting an asset-light, high-take-rate model.

• Operating margin: 24.2% (20.74/85.79), supported by disciplined SG&A (51.62; 60.2% of sales) vs. strong gross profit.
• EBITDA margin: 26.7% (22.87/85.79), D&A modest at 2.13.
• Net margin: 16.5% (14.13/85.79); delta from operating profit likely tied to non-operating/one-off items and tax (effective tax ~15%). operating_leverage: Revenue grew 14.4% YoY while operating income grew 15.9% YoY, indicating mild positive operating leverage from scaling effects and cost discipline.

Growth Assessment

revenue_sustainability: Top-line expanded 14.4% YoY to 85.79. High gross margins suggest mix quality and/or favorable take rate dynamics; sustainability depends on maintaining lead volumes, conversion, and partner network depth. profit_quality: Operating profit growth outpaced sales, supported by an 80%+ gross margin and stable D&A; however, net income declined 3.7% YoY, implying potential non-operating headwinds or tax normalization. outlook: With strong unit economics and cash generation, the business appears positioned for continued core profitability, subject to demand elasticity in matching/lead services, competitive intensity, and cost of customer acquisition. Monitoring non-operating lines and tax will be important for translating operating gains into bottom-line growth.

Financial Health

liquidity: Cash & equivalents of 54.31 are sizable versus total liabilities of 24.11, indicating ample headroom. Current assets are 52.74; current liabilities are unreported, so current/quick ratios are not computable. Accounts receivable of 10.40 suggests DSO ~44 days (10.40/85.79*365). solvency: Equity ratio is 69.3% (equity 52.00; assets 74.37). Financial leverage at 1.43x is low. Interest-bearing debt is unreported; given cash exceeds total liabilities, headline net cash looks strong. capital_structure: Debt-to-equity ratio is reported at 0.46x (methodology not disclosed). Accounts payable of 10.76 is material relative to cost of sales due to the high gross margin structure; interpret DPO with caution.

Cash Flow Quality

earnings_quality: OCF/Net income is 1.40x (19.81/14.13), indicating healthy conversion and limited accrual risk this period. FCF_analysis: FCF of 16.15 (OCF 19.81 minus capex 0.14) yields an estimated FCF margin of ~18.8%. Investing CF of -3.66 includes items beyond capex; nevertheless, cash generation comfortably funded dividends and reduced financing outflows. working_capital: Receivables 10.40 vs payables 10.76 indicate a payables-backed operating model; inventories are negligible at 0.17. The implied DSO (~44 days) is reasonable; the implied DPO is not meaningful when benchmarked solely to cost of sales in this model.

Dividend Sustainability

payout_ratio_assessment: Calculated payout ratio stands at 25.9%, supported by solid earnings and OCF. Reported DOE of 0.1% appears inconsistent with disclosed cash dividends and equity. FCF_coverage: FCF coverage is 4.41x, with dividends paid of 3.49 funded well within internally generated cash. policy_outlook: Given strong cash generation and a high equity ratio, the capacity for stable dividends is supported. Actual DPS is unreported; cash dividends suggest an implied DPS in the mid-teens of yen per share, subject to share count and policy decisions.

Risk Assessment

Business Risks:

• Demand volatility in matching/lead-generation services affecting volumes and take rates
• Competitive pressure from digital platforms driving CAC inflation and margin compression
• Dependence on partner network quality and retention (supply-side dynamics)
• Seasonality and event-driven fluctuations impacting service requests
• Regulatory or compliance changes affecting marketplace operations and data usage
• Technology reliability and cybersecurity risks impacting platform uptime and trust

Financial Risks:

• Non-operating income/expense and tax normalization dampening translation of operating gains into net income
• Potential concentration in payables dynamics that can distort cash conversion metrics
• Disclosure gaps (e.g., debt details, current liabilities breakdown) limiting analytical precision
• Sensitivity of results to working capital swings given receivables/payables timing
• Potential dilution risk if equity financing were pursued for growth (no such action indicated this period)

Key Concerns:

• Discrepancies between XBRL-reported ratios and calculated metrics (e.g., ROE, operating margin)
• Net income decline (-3.7% YoY) despite stronger operating profit
• Limited visibility on current liability composition and interest-bearing debt

Investment Implications

Key Takeaways:

• Core operations strengthened: revenue +14.4% YoY and operating income +15.9% YoY
• High-margin, asset-light model: gross margin 80.1%, operating margin 24.2%, EBITDA margin 26.7%
• Strong cash generation: OCF/NI 1.40x and FCF 16.15 supporting shareholder returns
• Robust balance sheet: equity ratio 69.3% and cash 54.31 exceeding total liabilities
• Calculated ROE ~27.2% driven by healthy margins and solid asset turnover
• Net income softness (-3.7% YoY) highlights importance of non-operating/tax dynamics

Metrics to Watch:

• Take rate and gross margin sustainability
• SG&A efficiency versus revenue growth (operating leverage)
• OCF/NI ratio and FCF margin
• Receivables and payables turns; cash conversion cycle
• Non-operating items and effective tax rate
• Dividend payout policy and cash balance trajectory

Relative Positioning: Within Japan’s platform/lead-generation cohort, the company exhibits superior gross margins, strong cash conversion, and a conservative balance sheet, positioning it favorably on profitability and financial resilience, albeit with moderate top-line growth and some disclosure inconsistencies in reported ratios.

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