Cacco Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥601M
• Operating Income: ¥-84M
• Net Income: ¥-83M
• EPS: ¥-30.53

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

For FY2025 Q3, かっこ株式会社 reported revenue of ¥601 million, up 14.9% YoY, indicating healthy top-line momentum despite macro uncertainty. Gross profit was disclosed at ¥316 million, yielding a gross margin of 52.6%, which is robust for a software/analytics-oriented model; however, this figure does not arithmetically reconcile with disclosed cost of sales, suggesting classification/timing differences in reported subtotals. Operating income remained negative at ¥-84 million, with YoY change noted as +0.0%, implying limited progress in operating leverage despite revenue growth. Ordinary income was ¥-82 million and net income was ¥-83 million, translating into a net margin of -13.8%. DuPont decomposition indicates ROE of -10.84%, driven by negative profitability (NPM -13.81%), moderate asset turnover (0.636x), and low financial leverage (1.23x). The balance sheet is conservative: total assets of ¥945 million and total liabilities of ¥193 million imply an equity base of ¥766 million and an implied equity ratio of roughly 81% (despite a reported 0.0% equity ratio figure, which appears to be undisclosed rather than zero). Liquidity is strong with current assets of ¥863 million against current liabilities of ¥125 million (current ratio ~6.9x), and working capital of ¥738 million. Interest expense is minimal at ¥0.44 million, and interest coverage appears negative given operating losses, but the absolute burden is de minimis. Cash flow statements are undisclosed in this dataset (zeros reflect non-reporting), which limits assessment of earnings-to-cash conversion and capex intensity this quarter. The company paid no dividends, which is consistent with a loss-making quarter and likely a policy to prioritize reinvestment and balance sheet strength. Overall profitability hinges on controlling SG&A and achieving scale efficiencies; the strong gross margin provides headroom if growth persists and cost discipline improves. Revenue growth quality appears solid, but the unchanged operating loss suggests reinvestment and/or elevated cost base are offsetting gains. The capital structure is conservative, providing runway to execute growth initiatives without immediate financing pressure. Key near-term watchpoints include cost discipline, operating leverage realization, and visibility on recurring revenue retention and upsell. Data gaps around cash flows and share data constrain precision in cash-based metrics and per-share analysis, so conclusions prioritize the disclosed non-zero figures.

Profitability Analysis

ROE is -10.84% per DuPont: Net profit margin -13.81% × asset turnover 0.636 × financial leverage 1.23. The negative margin is the primary drag; leverage is modest and not a driver of returns, while asset turnover is reasonable for a software/services profile. Gross margin of 52.6% indicates healthy unit economics, suggesting the core service offering carries attractive contribution margins. The gap between gross margin and operating margin (operating income ¥-84 million on ¥601 million sales) implies elevated SG&A/R&D relative to scale, consistent with growth investment or fixed cost absorption. Ordinary income (¥-82 million) slightly outperforms operating income, indicating limited non-operating headwinds and negligible interest burden (interest expense ¥0.44 million). Effective tax rate appears not meaningful in a loss-making quarter; a small tax amount was recognized (¥0.40 million), likely due to non-deductible items or minimum taxes. Operating leverage has not materialized this quarter despite 14.9% YoY revenue growth; the flat operating loss trajectory suggests costs rose in tandem with revenues. To pivot toward profitability, management would need to moderate cost growth below revenue growth or realize higher gross contribution via mix/price. The reported EBITDA and D&A are undisclosed (zeros), so EBITDA margin is not assessable from this dataset; however, the negative operating result already signals pressure below gross profit.

Growth Assessment

Revenue grew 14.9% YoY to ¥601 million, indicating continued demand and/or successful customer acquisition and retention. Given the strong gross margin (52.6%), growth appears to be value-accretive at the gross level. However, unchanged operating losses suggest reinvestment intensity or cost inflation is offsetting the scale benefits; growth is not yet translating to operating profitability. The ordinary-to-operating income delta is small, confirming growth quality is not being masked by financial items. Without disclosed cash flow, we cannot validate cash collection pace, deferred revenue movements, or customer prepayments, which are important for assessing SaaS-like growth sustainability. Absent segment data, we assume recurring revenue is a material component, given industry norms; retention and net expansion will be key to sustaining double-digit growth. Near-term outlook depends on maintaining sales momentum while structurally lowering the cost-to-serve and go-to-market costs per unit of revenue. If revenue growth persists at low-to-mid teens and SG&A growth moderates, breakeven at the operating line could be achievable over the next few quarters. Conversely, if growth slows without corresponding cost flexibility, losses may persist.

Financial Health

Liquidity is strong: current assets ¥863.4 million vs current liabilities ¥125.1 million, yielding a current ratio of ~6.9x and quick ratio similar given zero inventories reported. Working capital stands at ¥738.2 million, providing ample short-term funding capacity. Solvency is robust with total liabilities of ¥193.1 million against equity of ¥766.0 million; implied equity ratio is approximately 81% (766/945), despite the reported 0.0% figure in the dataset being a non-disclosure placeholder. Debt-to-equity of ~0.25x (proxy using total liabilities/equity) indicates low leverage. Interest expense is only ¥0.44 million, so financial risk from debt service is minimal even with operating losses. The capital structure can support continued investment and temporary losses. However, sustained negative operating income will gradually erode equity if not corrected; monitoring accumulated losses versus equity is prudent. Absence of cash and cash flow disclosure constrains precise assessment of the cash runway; nonetheless, large current assets and low current liabilities suggest a comfortable liquidity buffer.

Cash Flow Quality

Operating, investing, and financing cash flows are undisclosed this quarter (zeros represent non-reporting). As such, OCF-to-net-income and free cash flow metrics cannot be reliably assessed from this dataset. Earnings quality assessment must therefore rely on accrual-based signals: the combination of strong gross margin and negative operating income points to elevated operating expenses rather than revenue recognition anomalies. Without working capital detail (receivables/payables/deferred revenue), we cannot assess cash conversion, DSO/DPO trends, or any prepayment characteristics. Depreciation and amortization are undisclosed, limiting inference on non-cash expense contribution. Given the single-entity basis (non-consolidated), intercompany cash flows do not apply, but quarter-to-quarter volatility in OCF could still be material for a growth-stage model. Key data needed: cash and equivalents balance, OCF, capex, and changes in receivables and contract liabilities to validate cash conversion.

Dividend Sustainability

No dividend was paid or guided for the period (DPS ¥0.00), which aligns with a loss-making quarter and growth investment posture. Payout ratio is effectively 0% given negative earnings, and free cash flow coverage is not assessable from undisclosed CF data. With an implied high equity ratio and ample working capital, the balance sheet could accommodate a dividend in theory, but sustaining payouts would be imprudent until operating profitability and positive OCF are established. The likely policy stance is to prioritize reinvestment and balance sheet resilience over distributions. Any future dividend initiation would require consistent net profit, positive OCF, and visibility on maintaining growth while funding product development and sales capacity.

Risk Assessment

Business Risks:

• Execution risk in achieving operating leverage despite revenue growth
• Customer concentration and churn sensitivity typical of SaaS/analytics models
• Pricing pressure or mix shifts that could compress gross margin from 52.6%
• Competitive intensity from domestic and global fraud/analytics providers
• Regulatory and data privacy changes affecting model performance and onboarding
• Dependence on IT talent; wage inflation could elevate SG&A

Financial Risks:

• Sustained operating losses eroding equity over time
• Limited visibility on cash flows due to non-disclosure this quarter
• Potential working capital swings (receivables/contract liabilities) not observable
• Negative interest coverage due to operating loss, albeit with small absolute interest expense

Key Concerns:

• Operating loss unchanged YoY despite 14.9% revenue growth
• Lack of cash flow disclosure prevents validation of earnings-to-cash conversion
• Discrepancy between cost of sales and gross profit subtotals implies classification/timing differences

Investment Implications

Key Takeaways:

• Top-line growth remained solid at +14.9% YoY to ¥601 million
• Gross margin is strong at 52.6%, evidencing healthy unit economics
• Operating leverage not yet realized; operating income stuck at ¥-84 million
• Balance sheet is conservative with implied equity ratio around 81% and D/E ~0.25x
• Liquidity is ample: current ratio ~6.9x and working capital ¥738 million
• Cash flow metrics are unavailable; monitoring OCF and capex is essential
• ROE is negative at -10.84%, primarily driven by negative margins rather than leverage

Metrics to Watch:

• Operating expense growth vs revenue growth (SG&A and R&D ratio to sales)
• Quarterly operating income progression and breakeven timeline
• Net retention rate and new logo additions (if disclosed)
• Cash and equivalents, OCF, and FCF once disclosed
• Deferred revenue/contract liabilities and receivables turnover
• Gross margin stability vs pricing and product mix

Relative Positioning: The company exhibits attractive gross margins and a strong balance sheet relative to many early-stage software/service peers, but trails profitability peers that are already demonstrating operating leverage; execution on cost discipline and cash conversion will determine convergence toward profitable growth.

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