Yappli,Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥4.46B
• Operating Income: ¥723M
• Net Income: ¥715M
• EPS: ¥55.81

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

Yappli (4168) reported FY2025 Q3 (single-entity, JGAAP) revenue of ¥4,455m, up 9.1% YoY, demonstrating steady top-line expansion. Gross profit reached ¥2,737m, implying a robust gross margin of 61.4%, consistent with a high-value, software-like model with limited direct cost of sales. Operating income rose to ¥723m, up 50.7% YoY, evidencing strong operating leverage as expenses grew slower than revenue. Ordinary income was ¥720m and net income ¥715m, translating to a net margin of 16.05%, which is healthy for a growth-oriented software/service business. The DuPont framework indicates ROE of 26.28%, driven by a 16.05% net margin, 1.004x asset turnover, and moderate financial leverage of 1.63x. On the balance sheet, total assets were ¥4,439m, liabilities ¥1,879m, and equity ¥2,721m; while the reported equity ratio field is 0.0% (undisclosed), the implied equity ratio is approximately 61.3% based on available figures. Liquidity appears strong with a current ratio of 377.9% and working capital of ¥2,068m, supported by current assets of ¥2,812m versus current liabilities of ¥744m. Interest expense was minimal at ¥4.6m, and interest coverage was a very comfortable 158.5x, underscoring low debt service risk. The effective tax rate shows as 0.0% due to a reported tax benefit of ¥174.4m, which boosts bottom-line profitability in this period. Cash flow statement items are unreported (recorded as zeros), so operating cash flow, free cash flow, and cash balances cannot be assessed from this dataset. Depreciation and amortization also show as zero (unreported), resulting in an EBITDA figure of zero (unreported) in the calculated metrics. Despite the cash flow data gap, the income statement and balance sheet point to improving profitability and a conservative capital structure. Operating leverage appears favorable: 9.1% revenue growth produced a 50.7% increase in operating profit, indicating effective cost discipline and/or scale benefits. The absence of dividends (DPS ¥0, payout ratio 0.0%) aligns with reinvestment priorities typical for growth-stage software businesses. Key limitations include single-entity reporting, lack of cash flow disclosure, and unreported depreciation/amortization, which constrain earnings quality analysis and FCF-based dividend/valuation assessments. Overall, profitability momentum and balance sheet strength are clear, but confirmation via cash flow and working capital dynamics is needed to validate sustainability.

Profitability Analysis

ROE_decomposition: ROE 26.28% = Net margin 16.05% × Asset turnover 1.004 × Financial leverage 1.63. The high net margin is the primary driver, with modest asset turnover and moderate leverage amplifying returns. margin_quality: Gross margin 61.4% (¥2,737m/¥4,455m) supports a software/service mix with limited COGS. Operating margin is approximately 16.24% (¥723m/¥4,455m), improving sharply versus revenue growth (+50.7% OI vs +9.1% sales), suggesting disciplined opex and scale benefits. Ordinary margin ~16.16% and net margin 16.05% indicate limited non-operating drag. Effective tax rate shows as 0.0% due to a ¥174.4m tax benefit, temporarily elevating net margin. operating_leverage: Revenue +9.1% YoY vs operating income +50.7% YoY implies significant operating leverage and fixed-cost absorption. Sustaining this will depend on sales productivity and R&D/S&M scaling relative to revenue.

Growth Assessment

revenue_sustainability: Top-line growth of 9.1% YoY is solid but not hypergrowth, consistent with a maturing SaaS-like trajectory. Gross margin stability at 61%+ suggests pricing and mix remain favorable. profit_quality: Net margin (16.05%) benefits from a one-off-like tax credit (¥174.4m). Operating margin expansion is the cleaner signal of structural improvement. Minimal interest burden (¥4.6m) contributes little distortion. outlook: Assuming continued cost control, the company can sustain mid-teens operating margins near-term. Revenue durability will hinge on subscription retention, upsell, and new logo acquisition; with limited disclosures, maintaining high-50s/low-60s gross margin will be key to funding growth while preserving profitability.

Financial Health

liquidity: Current assets ¥2,812m vs current liabilities ¥744m yields a current ratio of 377.9% and quick ratio of 377.9% (no inventories reported), indicating strong short-term liquidity. Working capital stands at ¥2,068m. solvency: Total liabilities ¥1,879m vs equity ¥2,721m implies an equity ratio of ~61.3% (computed; reported field unfilled). Debt-to-equity is 0.69x (liabilities/equity), with low interest expense (¥4.6m) and interest coverage of 158.5x, reflecting low financial risk. capital_structure: Financial leverage at 1.63x (assets/equity) is moderate, providing flexibility. The balance sheet supports continued reinvestment without near-term funding pressure.

Cash Flow Quality

earnings_quality: Cash flow statements are unreported (OCF, ICF, FCF recorded as 0 by data provider), so conversion of earnings to cash cannot be assessed. The displayed OCF/Net Income ratio of 0.00 is not meaningful given missing disclosure. FCF_analysis: Free cash flow is unreported; capex and D&A are also unreported (D&A shown as 0). Without these, we cannot evaluate maintenance vs growth capex or cash reinvestment intensity. working_capital: With only period-end balances, intra-period dynamics (DSO, deferred revenue, payables) are unknown. Current asset build vs revenue growth cannot be matched to cash generation absent CF data.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0 and payout ratio is 0.0%, consistent with reinvestment priorities. Given positive earnings and strong liquidity, capacity exists, but the company appears to prioritize growth. FCF_coverage: Not assessable; FCF is unreported. Any payout analysis based on earnings alone would be incomplete. policy_outlook: With ROE at 26.28% and expanding operating margins, retention makes sense. Future initiation of dividends would likely depend on visibility into stable OCF and lower reinvestment needs.

Risk Assessment

Business Risks:

• Growth deceleration risk as revenue expanded 9.1% YoY, implying maturing trajectory.
• Customer churn and contract renewals typical of subscription/app platform businesses.
• Pricing pressure and competition in mobile app platforms and adjacent SaaS markets.
• Dependence on sales productivity and partner channels to sustain new bookings.
• Talent acquisition/retention in engineering and enterprise sales.
• Information security and platform reliability risks impacting reputation and churn.

Financial Risks:

• Limited visibility into cash generation due to unreported OCF/FCF, raising uncertainty on earnings-to-cash conversion.
• Tax normalization risk: a ¥174.4m tax benefit drives a 0.0% effective tax rate; margins could compress as taxes normalize.
• Potential working capital swings (receivables, deferred revenue) not observable from available data.
• Single-entity reporting may omit exposures present in consolidated affiliates (if any).

Key Concerns:

• Cash flow data gaps (OCF/FCF reported as zero due to non-disclosure) hinder assessment of earnings quality.
• Sustainability of operating leverage given slower top-line growth.
• Net margin currently aided by tax benefit; underlying after-tax profitability could be lower under a normalized tax rate.

Investment Implications

Key Takeaways:

• Revenue grew 9.1% YoY to ¥4,455m with strong gross margin of 61.4%.
• Operating income rose 50.7% YoY to ¥723m, lifting operating margin to ~16.2%.
• ROE is robust at 26.28% on moderate leverage (1.63x) and a 16.05% net margin.
• Balance sheet is conservative with an implied equity ratio ~61% and interest coverage 158.5x.
• Tax benefit of ¥174.4m depresses the effective tax rate to 0.0%, inflating net profitability this period.
• Cash flow information is unavailable; earnings-to-cash conversion cannot be validated.

Metrics to Watch:

• Operating cash flow, free cash flow, and cash balance disclosure in the full-year results.
• Deferred revenue, billings, and DSO to gauge demand and cash conversion.
• Gross margin trajectory and opex ratios (S&M and R&D as a % of sales) to test operating leverage durability.
• Net revenue retention/churn and ARR growth to assess sustainability of top-line expansion.
• Normalized effective tax rate and its impact on net margin.
• Any changes in interest-bearing debt and interest expense.

Relative Positioning: Within domestic software/application platform peers, Yappli shows above-average profitability momentum (operating margin ~16% with 50%+ YoY OI growth) and strong ROE supported by moderate leverage and a solid balance sheet; confirmation via cash flow disclosures would strengthen the relative quality case.

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