Appier Group,Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥31.04B
• Operating Income: ¥1.91B
• Net Income: ¥1.66B
• EPS: ¥16.33

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

Appier Group (FY2025 Q3, IFRS, consolidated) delivered strong topline and profit growth on improving operating leverage, while cash flow was mixed due to heavier investing outflows. Revenue reached 310.36 (100M JPY), up 26.3% YoY, indicating robust demand across its AI-driven marketing solutions. Gross profit was 128.64 with a gross margin of 41.4%, consistent with a software-enabled model that scales with volume. Operating income rose to 19.08 (+58.5% YoY), yielding an operating margin of roughly 6.1%, reflecting cost discipline and scale efficiencies despite unreported SG&A details. Net income was 16.61 (+34.0% YoY), translating to a net margin of 5.3% and basic EPS of 16.33 JPY on 101.7 million average shares. DuPont-derived ROE stands at 4.9%, underpinned by 5.3% net margin, 0.56x asset turnover, and 1.63x financial leverage. Profit before tax of 16.84 and an effective tax rate of only 3.6% suggest the continued utilization of tax attributes or jurisdictional mix effects. Total comprehensive income was -1.23, implying sizable negative OCI (likely FX translation) that offset part of the net profit. The balance sheet is conservative with total assets of 554.35 and an equity ratio of 61.5%; debt-to-equity is a modest 0.30x. Interest-bearing debt totals about 75.31 (short-term 15.00, long-term 60.31), while cash and equivalents are 54.96, implying small net debt near 20.35. Operating cash flow was 16.07 and free cash flow was reported at -8.31, indicating that negative FCF stems from investing cash outflows rather than maintenance capex (capex only -0.62). Dividend and buyback outflows were modest (dividends -2.03, repurchases -1.45), signaling shareholder returns while preserving balance sheet strength. Retained earnings remain negative at -55.44, reflecting cumulative past losses despite current profitability. Working capital and liquidity ratios cannot be precisely assessed because current liabilities were not disclosed; the reported “working capital” equals current assets and should be treated cautiously. Overall, the quarter evidences improving profitability quality and scale benefits, with FX/OCI headwinds and investment cash outflows tempering cash conversion.

Profitability Analysis

ROE_decomposition: ROE 4.9% = Net margin 5.3% x Asset turnover 0.560 x Leverage 1.63x. The improvement in operating income (+58.5% YoY) versus revenue (+26.3% YoY) indicates positive operating leverage, supporting ROE expansion despite conservative leverage. margin_quality: Gross margin at 41.4% supports a software-like contribution profile. Operating margin is about 6.1% (19.08 / 310.36), indicating significant OPEX (SG&A not disclosed) but trending better given operating income growth outpacing revenue. Net margin at 5.3% benefits from a low effective tax rate (3.6%), which may not be structurally permanent. operating_leverage: Revenue +26.3% and operating income +58.5% demonstrate strong incremental margins. This suggests improved utilization of fixed costs (R&D/SG&A not reported) and potentially favorable revenue mix toward higher-margin products.

Growth Assessment

revenue_sustainability: 26.3% YoY growth is robust for an AI/marketing tech platform. Sustainability will hinge on customer expansion, upsell of automation modules, international growth, and resilience of digital ad budgets. profit_quality: Net income growth (+34.0% YoY) trails operating income growth due to negative OCI reducing comprehensive income (-1.23). Core profit quality is supported by gross margins and operating leverage, but the low tax rate inflates net margin and may normalize. outlook: With scale benefits evident and prudent leverage, continued margin expansion is plausible if revenue growth remains above 20% and OPEX is controlled. FX translation and investment outlays could introduce volatility to bottom line and FCF near term.

Financial Health

liquidity: Cash and equivalents 54.96 vs. short-term debt 15.00 suggests comfortable near-term coverage; current ratio is not calculable due to unreported current liabilities. The reported working capital of 279.99 equals current assets and is not a reliable proxy without CL. solvency: Equity ratio 61.5% and debt-to-equity 0.30x indicate a strong capital structure. Net debt is modest at approximately 20.35 (75.31 debt minus 54.96 cash). capital_structure: Long-term debt 60.31 dominates, spreading refinancing risk. Capital surplus of 240.69 and negative retained earnings (-55.44) reflect accumulated deficits offset by paid-in capital.

Cash Flow Quality

earnings_quality: OCF/Net income is 0.97x, implying solid earnings-to-cash conversion at Q3 year-to-date despite growth investments. The divergence between net income (16.61) and total comprehensive income (-1.23) points to sizable OCI losses (likely FX), not core operating issues. FCF_analysis: Free cash flow reported at -8.31 despite small capex (-0.62) indicates other investing outflows (e.g., M&A, intangibles, deposits) drove negative FCF. OCF 16.07 was insufficient to cover total investing needs and shareholder returns in the period. working_capital: Working capital metrics (DSO/DPO/DIO) are not derivable due to unreported AR/AP/inventory. OCF near net income suggests no major adverse working capital swing, but this cannot be confirmed without sub-accounts.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are unreported. Cash dividends of -2.03 against net income of 16.61 imply a low cash payout (~12%) through Q3, but the final annual payout is uncertain. FCF_coverage: With FCF at -8.31, dividends were not covered by FCF in the period; however, OCF coverage was available. Sustainability depends on moderating investment outflows or sustaining higher OCF in subsequent quarters. policy_outlook: Given modest leverage and improving profitability, the company appears capable of maintaining a small dividend and opportunistic buybacks, subject to investment priorities and cash generation. Lack of disclosed formal policy and DPS limits precision.

Risk Assessment

Business Risks:

• Cyclical or macro-driven volatility in digital advertising and marketing spend
• Customer concentration and churn risk in enterprise/advertiser base
• Competitive intensity from global adtech and marketing automation platforms
• Execution risk in cross-selling higher-margin AI modules to sustain growth
• Regulatory and privacy changes impacting data usage and targeting efficacy
• FX translation risk given international footprint, impacting OCI and reported equity

Financial Risks:

• Negative FCF due to elevated investing outflows
• Potential normalization of unusually low effective tax rate (3.6%)
• Residual net debt (~20.35) amid rising rates could pressure interest expense (interest not disclosed)
• Negative retained earnings (-55.44) limit internal capital buffers for large distributions

Key Concerns:

• Total comprehensive income negative despite positive net income
• Limited disclosure of SG&A, interest expense, and current liabilities constrains ratio analysis
• Sustainability of operating leverage if growth moderates

Investment Implications

Key Takeaways:

• Strong topline momentum (+26.3% YoY) with accelerating operating income (+58.5% YoY) underscores improving operating leverage
• Healthy gross margin (41.4%) supports scalable unit economics
• ROE at 4.9% reflects modest leverage and improving margins; room for further expansion if asset turnover improves
• Cash generation solid at the operating level (OCF/NI ~0.97x), but FCF negative due to investing outflows
• Balance sheet conservative (equity ratio 61.5%, D/E 0.30x) with small net debt
• Total comprehensive loss signals FX/OCI headwinds that affect book value
• Dividend and buybacks remain modest and manageable but should be matched to FCF trajectory

Metrics to Watch:

• Revenue growth rate and pipeline conversion in key verticals/geographies
• Operating margin progression and implied SG&A efficiency
• OCF conversion (OCF/NI) and reversion to positive FCF
• Composition of investing CF (M&A vs. internal development/capex)
• FX translation impacts on OCI and equity
• Tax rate normalization from 3.6% toward medium-term steady state

Relative Positioning: Within AI-driven marketing/adtech peers, Appier exhibits above-market revenue growth with mid-single-digit operating margin that is improving, supported by a strong equity base and modest leverage; cash flow visibility is the key watchpoint versus peers with steadier FCF.

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