Plus Alpha Consulting Co.,LTD. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥17.08B
• Operating Income: ¥6.38B
• Net Income: ¥3.55B
• EPS: ¥78.60

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

Plus Alpha Consulting (TSE: 4071) delivered strong FY2025 Q4 full-year results under JGAAP on a consolidated basis, with revenue of ¥17.084bn (+22.8% YoY) and operating income of ¥6.378bn (+40.8% YoY). Profitability expanded materially: gross margin was 59.4% and operating margin approximately 37.3%, indicating operating leverage and favorable mix. Ordinary income was ¥6.320bn, broadly in line with operating income, suggesting minimal net non-operating effects. Net income rose to ¥3.258bn (+5.4% YoY), implying a meaningful gap versus operating/ordinary income likely due to taxes and possible extraordinary items under JGAAP. The calculated effective tax rate, based on disclosed tax expense and net income, is about 29.1%, while the difference between ordinary income and pre-tax income suggests one-off losses impacted the bottom line. Cash generation was robust: operating cash flow reached ¥5.154bn (OCF/NI 1.58x) and free cash flow was ¥4.99bn, underscoring high earnings quality for an asset-light model. The balance sheet is conservative with total assets of ¥18.628bn and total equity of ¥14.809bn; the implied equity ratio is approximately 79.5% despite the reported 0.0% placeholder. Liquidity is strong, with a current ratio of about 407% and working capital of roughly ¥9.11bn, reflecting low short-term pressure. Leverage is low, with liabilities-to-equity of ~0.22x and negligible interest expense, aligning with the asset-light, subscription-oriented profile. DuPont analysis points to a 22.0% ROE, supported by a 19.1% net margin, 0.917x asset turnover, and modest leverage of 1.26x. EBITDA of ¥6.529bn (38.2% margin) provides ample capacity for reinvestment. Investing cash outflows were modest (¥0.164bn), consistent with scalable software/analytics operations. Reported dividends show 0, indicating either retention of cash for growth or unreported items; financing cash outflow of ¥0.615bn suggests buybacks, lease repayments, or other financing uses. Overall, the firm demonstrates accelerating operating profit growth, strong cash conversion, and a fortress balance sheet, though the divergence between ordinary income and net income warrants monitoring for one-off losses or changes in tax/extraordinary items. Data limitations exist where some items were reported as zero placeholders; the analysis emphasizes available, non-zero disclosures and derived ratios.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 19.07%
• asset_turnover: 0.917
• financial_leverage: 1.26
• calculated_ROE: 22.0%
• commentary: ROE is primarily driven by strong margins and respectable asset turnover, with only modest leverage contribution. margin_quality:
• gross_margin: 59.4%
• operating_margin: 37.3% (6,378m / 17,084m)
• ordinary_margin: 37.0% (6,320m / 17,084m)
• net_margin: 19.07%
• insight: Expansion in operating margin vs. revenue growth indicates operating leverage and efficient cost management; minimal gap between operating and ordinary profit points to limited non-operating drag. operating_leverage:
• evidence: Operating income growth (+40.8% YoY) outpaced revenue growth (+22.8% YoY).
• implication: Fixed-cost absorption and scalable delivery (likely subscription/analytics) are enhancing profitability as the business scales.

Growth Assessment

revenue_sustainability: Revenue grew 22.8% YoY, consistent with a healthy demand backdrop for analytics/consulting solutions and potential recurring revenue dynamics. profit_quality: Operating profit increased 40.8% YoY with strong gross margin, suggesting mix improvement and scale benefits; the gap to net income growth (+5.4%) appears driven by tax/extraordinary items rather than core performance. outlook: With high FCF, ample liquidity, and low leverage, the company is positioned to continue investing in product, sales capacity, and possibly M&A. Key to sustaining growth will be retention/upsell metrics (NRR), new logo momentum, and maintaining high gross margins.

Financial Health

liquidity:

• current_assets: 12077001000
• current_liabilities: 2968483000
• current_ratio: 406.8%
• quick_ratio: 406.8% (no inventories reported)
• working_capital: 9108518000
• commentary: Very strong near-term liquidity with sizable net working capital and limited short-term obligations. solvency:
• total_assets: 18628000000
• total_liabilities: 3311035000
• total_equity: 14809000000
• equity_ratio_implied: ≈79.5% (computed as equity/assets)
• debt_to_equity: 0.22x (liabilities/equity)
• interest_coverage: N/A; interest expense reported as 0 (likely negligible).
• commentary: Low leverage and high equity buffer indicate very low solvency risk. capital_structure: Primarily equity-financed with minimal financial debt; ordinary income closely tracks operating income, indicating limited financial income/expense effects.

Cash Flow Quality

earnings_quality:

• OCF: 5154000000
• net_income: 3258000000
• OCF_to_NI: 1.58
• insight: OCF exceeds net income, indicating conservative revenue recognition and strong cash conversion. FCF_analysis:
• investing_CF: -164000000
• free_cash_flow: 4990000000
• capex_intensity: Low; supports asset-light model and scalable growth.
• insight: High FCF provides capacity for reinvestment, shareholder returns, or strategic M&A. working_capital:
• observations: Strong positive working capital; quick ratio elevated with no inventories reported. Deferred revenue dynamics not disclosed; receivables/payables granularity unavailable.
• implication: Cash generation is unlikely to be constrained by working capital in the near term; monitor receivable days and deferred income (if applicable).

Dividend Sustainability

payout_ratio_assessment: Payout ratio reported as 0% with DPS 0.00 (may reflect undisclosed items). Given strong FCF and cash generation, capacity to pay is high, but the firm may prioritize growth investments. FCF_coverage: Not applicable for FY given DPS reported as 0; if dividends were to be initiated, FCF of ~¥5.0bn suggests ample coverage. policy_outlook: Absent clear guidance, policy appears conservative/retentive. Watch for announcements on dividends or buybacks as scale increases; financing CF outflow implies some capital return or lease/debt servicing.

Risk Assessment

Business Risks:

• Customer concentration risk in enterprise analytics/consulting engagements.
• Competitive intensity in SaaS/analytics leading to pricing pressure and higher CAC.
• Retention and churn risk impacting recurring revenue metrics (NRR, logo churn).
• Execution risk in scaling sales and product while maintaining margin.
• Dependence on key human capital (data scientists, engineers, consultants).
• Data privacy, security, and compliance risks.
• Domestic macro softness affecting IT budgets and project timing.

Financial Risks:

• Potential volatility from extraordinary items under JGAAP affecting net income.
• Limited disclosure on cash and detailed working capital components.
• Revenue recognition and collection risk if receivables grow faster than sales.
• Currency exposure if expanding internationally (not disclosed).
• Equity-based compensation dilution risk (not disclosed).

Key Concerns:

• Gap between ordinary income (¥6.32bn) and pre-tax income implied by NI and taxes suggests one-off losses; magnitude warrants monitoring.
• Dividend and share count data not disclosed; per-share capital allocation assessment constrained.
• Equity ratio, cash, and certain ratios reported as zero placeholders; requires cautious interpretation.

Investment Implications

Key Takeaways:

• Strong topline growth (+22.8% YoY) with outsized operating leverage (+40.8% YoY OP).
• High-quality earnings with OCF/NI at 1.58x and FCF of ~¥5.0bn.
• Conservative balance sheet with implied ~79.5% equity ratio and low leverage.
• EBITDA margin at 38.2% supports reinvestment flexibility.
• Watch the divergence between ordinary income and net income for extraordinary impacts.

Metrics to Watch:

• Net revenue retention (NRR) and churn.
• Bookings/ARR growth and pipeline conversion.
• Deferred revenue and receivable days (DSO).
• Gross margin stability and operating margin trajectory.
• OCF/NI ratio and FCF margin.
• Extraordinary gains/losses and effective tax rate stability.

Relative Positioning: Operationally strong, asset-light analytics/consulting firm with superior margins, robust cash generation, and low leverage, positioning it favorably versus typical domestic software/IT services peers; near-term watchpoint is the NI impact from non-operating/extraordinary items under JGAAP.

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