rakumo Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥1.31B
• Operating Income: ¥318M
• Net Income: ¥166M
• EPS: ¥33.48

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

rakumo株式会社 (40600) reported FY2025 Q3 consolidated results under JGAAP with strong top-line momentum and solid profitability. Revenue reached ¥1,309 million, up 24.0% YoY, indicating sustained demand and likely healthy net retention in its subscription-centric model. Gross profit was ¥690.1 million, implying a gross margin of 52.7%, which supports a scalable, software-oriented cost structure despite room for further efficiency versus higher-margin SaaS peers. Operating income of ¥318 million grew 19.2% YoY, translating to an operating margin of roughly 24.3%, demonstrating disciplined OPEX control even as the company invests for growth. Ordinary income was ¥314 million, only slightly below operating income, reflecting minimal non-operating drag; interest expense was negligible at ¥0.087 million. Net income rose 17.5% YoY to ¥194 million, with a net margin of 14.82%, evidencing resilient bottom-line conversion. DuPont analysis yields an ROE of 10.8%, driven by a 14.8% net margin, 0.317x asset turnover, and 2.30x financial leverage, a balanced profile for a growing software company. The balance sheet shows total assets of ¥4,131 million and total equity of ¥1,796 million, implying an equity ratio of about 43.5% (the reported 0.0% equity ratio is clearly an unreported placeholder). Liquidity is strong with a current ratio of 2.91x and quick ratio of 2.91x (no inventories reported), supported by ¥1,570 million of working capital. Solvency appears comfortable: total liabilities to equity are 0.78x, and interest coverage is extremely high at roughly 3,655x, suggesting minimal reliance on debt finance. Cash flow statement items were not disclosed (all zeros are placeholders), so operating cash flow, free cash flow, and cash-on-hand cannot be assessed from this filing. The effective tax rate shown as 0.0% in the calculated metrics is a placeholder; using reported income tax of ¥95.1 million and ordinary income of ¥314 million suggests an effective rate of roughly 30%. Dividend per share is undisclosed (0.00 placeholder), and payout ratio shows as 0.0%, indicating either no distribution or nondisclosure for the period. EPS was ¥33.48, but share count data were not provided, limiting per-share valuation analysis. Overall, the company demonstrates healthy growth, strong margins, robust liquidity, and ample interest coverage, with ROE in the low double digits. Key limitations to this analysis include the absence of cash flow data, undisclosed depreciation/amortization, and lack of share count and cash balance, all of which constrain cash conversion and capital allocation assessment.

Profitability Analysis

ROE of 10.8% is explained by net profit margin of 14.82%, asset turnover of 0.317x, and financial leverage of 2.30x. The 52.7% gross margin indicates decent unit economics consistent with software/services; there may be a mix of subscription and services given the margin level. Operating margin of ~24.3% reflects good operating leverage: revenue grew 24.0% YoY while operating income grew 19.2% YoY, suggesting opex growth modestly outpaced gross profit growth, but margins remain robust. Ordinary income margin is ~24.0%, close to operating margin, due to minimal interest expense (¥0.087 million). Net margin at 14.8% remains strong after taxes. Margin quality appears solid, though the lack of depreciation/amortization disclosure prevents precise EBITDA analysis and assessment of capitalized development effects. Operating leverage is positive, evidenced by double-digit revenue growth and sustained mid-20% operating margin; further scale could support incremental margin expansion if sales and R&D productivity improve.

Growth Assessment

Revenue grew 24.0% YoY to ¥1,309 million, signaling solid demand and likely healthy retention/expansion in the installed base. Operating income increased 19.2% YoY to ¥318 million, indicating that growth is being achieved without major margin sacrifice. Net income rose 17.5% YoY to ¥194 million, showing resilient bottom-line growth. The gross margin of 52.7% suggests a scalable platform, though not at the upper echelon of pure-play SaaS; product mix or services could moderate the margin. Ordinary income slightly below operating income implies little non-operating volatility. Absent cash flow and backlog/ARR disclosure, we cannot fully validate the durability of growth via cash-based metrics or contract liabilities. That said, the combination of strong top-line growth and stable margins supports a constructive outlook for continued mid- to high-teens earnings growth if cost discipline is maintained. Future growth sustainability will hinge on retention, upsell, new logos, and pricing power, as well as continued investment efficiency in sales and R&D.

Financial Health

Total assets are ¥4,131 million and total equity is ¥1,796 million, implying an equity ratio of approximately 43.5% (the reported 0.0% figure is a placeholder). Total liabilities of ¥1,400.9 million equate to a liabilities-to-equity ratio of 0.78x, a moderate leverage level. Current assets of ¥2,390.5 million vs. current liabilities of ¥820.4 million yield a current ratio of 2.91x and quick ratio of 2.91x, indicating strong liquidity. Working capital is ¥1,570.1 million, providing cushion for operations and growth investments. Interest expense is negligible at ¥0.087 million, and interest coverage is ~3,655x, implying minimal debt service burden. Inventories are not reported (likely not material for a software model). Lack of cash and cash equivalents disclosure (0 placeholder) limits assessment of immediate liquidity buffer and net cash/debt position.

Cash Flow Quality

Operating cash flow, investing cash flow, and financing cash flow were not disclosed in this report (zeros denote unreported), preventing direct evaluation of earnings-to-cash conversion. The stated OCF/Net Income ratio of 0.00 and FCF of 0 are placeholders and should not be interpreted as weak cash generation. With revenue up 24% and strong margins, cash conversion would typically be supported by subscription billings and deferred revenue, but we cannot verify without cash flow details or contract liability data. Depreciation and amortization are undisclosed, limiting ability to adjust earnings to a cash proxy. Working capital quality cannot be evaluated due to lack of receivables, payables, and deferred revenue detail. Overall, earnings quality appears sound from the income statement, but cash flow quality is indeterminable from provided data.

Dividend Sustainability

Annual DPS and payout ratio are shown as 0.00%, indicating no dividend or nondisclosure for the period. With net income of ¥194 million and strong liquidity (current ratio 2.91x), capacity for distributions would depend on actual operating cash flow and capital needs, both undisclosed. Free cash flow coverage metrics are unavailable due to missing OCF and capex. Given growth investments implied by double-digit revenue growth, retained earnings reinvestment may remain a priority; however, explicit policy guidance is not provided. Absent cash flow and policy disclosure, we cannot assess dividend sustainability beyond noting that no payout is evident for the period.

Risk Assessment

Business Risks:

• Dependence on subscription renewals, net retention, and churn management
• Competitive intensity in cloud software/workspace productivity solutions
• Pricing pressure and partner ecosystem dependency
• Execution risk in scaling sales and R&D while preserving margins
• Product mix shifts that could affect gross margins
• Customer concentration risk (not disclosed but common in smaller SaaS vendors)

Financial Risks:

• Limited visibility on cash position and cash generation due to undisclosed cash flow statement
• Potential capitalization of development costs affecting earnings quality (D&A undisclosed)
• Tax rate variability (computed ~30% vs. placeholder 0.0% in metrics)
• Exposure to working capital swings without disclosed receivables/deferred revenue detail
• Potential reliance on short-term liabilities not detailed in the filing

Key Concerns:

• Absence of operating, investing, and financing cash flow data
• Zero disclosures for cash, depreciation/amortization, and shares outstanding
• Equity ratio reported as 0.0% despite calculable ~43.5%, highlighting data gaps
• Inability to assess FCF coverage and capital allocation due to missing capex and OCF

Investment Implications

Key Takeaways:

• Strong revenue growth (+24.0% YoY) with resilient operating margin (~24.3%) and net margin (14.8%)
• ROE of 10.8% supported by healthy margins and moderate leverage (assets/equity 2.30x)
• Robust liquidity (current ratio 2.91x; working capital ¥1.57bn) and negligible interest burden
• Cash flow conversion and cash balance not assessable due to undisclosed CF data
• Equity ratio calculable at ~43.5% despite placeholder disclosure

Metrics to Watch:

• Operating cash flow and free cash flow; OCF/NI ratio
• Annualized recurring revenue (ARR), net revenue retention, churn
• Deferred revenue and billing growth as leading indicators
• Gross margin trajectory and operating expense ratios (S&M and R&D efficiency)
• Effective tax rate normalization (~30% based on current data)
• Any disclosure on cash and equivalents and capitalized development costs

Relative Positioning: Within TSE Growth-oriented software peers, rakumo shows above-market revenue growth with solid mid-20% operating margins and low double-digit ROE, coupled with strong liquidity and low financial risk, but is disadvantaged by limited disclosure on cash flows and capital allocation compared to best-in-class peers.

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