SpiderPlus & Co. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥3.60B
• Operating Income: ¥-58M
• Net Income: ¥-469M
• EPS: ¥-2.64

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

Verdict: A mixed quarter with solid top-line growth but continued operating losses and weak capital efficiency. Revenue reached 35.97 (100M JPY), up 21.3% YoY, showing healthy demand momentum. Gross profit is reported at 19.81 (100M JPY), translating to a gross margin of 55.1%, which is adequate for a SaaS-like model but suggests room for efficiency gains. SG&A expenses were 24.38 (100M JPY), exceeding gross profit and resulting in an operating loss of -0.58 (100M JPY), or an operating margin of approximately -1.6%. Ordinary income came in at -0.85 (100M JPY) after non-operating activities, implying limited financial income and modest interest cost headwinds. Net income was -0.93 (100M JPY), equating to a net margin of -2.6% and EPS of -2.64 JPY. DuPont-calculated ROE was -3.6%, driven by a negative net margin, modest asset turnover of 0.881, and financial leverage of 1.59x. The balance sheet remains liquid, with cash and deposits at 25.64 (100M JPY), current assets of 33.05 (100M JPY), and a current ratio of 257.5%, offset by short-term loans of 5.00 and long-term loans of 2.19. Debt is manageable with a D/E ratio of 0.59x, but interest coverage is weak at -7.54x due to operating losses. There is a notable gap between operating loss (-0.58) and profit before tax (-4.61), suggesting the presence of non-recurring or extraordinary items not detailed in the provided breakdown. Cash flow data were not disclosed, limiting assessment of earnings quality and cash conversion. ROIC is reported at -8.0%, signaling that current investments are not yet generating adequate returns. Working capital is ample (20.21), reducing short-term liquidity risk even as profitability lags. Overall, while revenue growth is encouraging, margin pressure and negative ROIC weigh on quality, and the absence of cash flow disclosure increases uncertainty. Forward-looking, the key to re-rating is scaling revenue while tightening SG&A and converting growth into positive operating cash flow.

Profitability Analysis

ROE decomposition: ROE (-3.6%) = Net Profit Margin (-2.6%) × Asset Turnover (0.881) × Financial Leverage (1.59x). The most impactful driver is the negative net margin, stemming from SG&A exceeding gross profit and weak operating leverage at current scale. Asset turnover below 1.0x indicates moderate efficiency for a software-oriented business with a cash-heavy balance sheet. Financial leverage is moderate (1.59x) and not the primary swing factor. Business reason: growth investments (notably headcount, sales and marketing, and product) appear to be running ahead of gross profit generation, compressing operating margin to approximately -1.6%. The widening gap between operating income (-0.58) and profit before tax (-4.61) suggests extraordinary or one-off factors also weighed on bottom-line profitability this quarter. Sustainability: revenue growth looks durable near term, but margin recovery depends on SG&A discipline and sustaining gross margin above 55%; one-off below-the-line charges are not necessarily recurring, while the structural SG&A run-rate will determine sustainable ROE. Watch-outs: the implied SG&A growth outpacing revenue (given negative operating margin despite 21.3% YoY revenue growth) indicates limited operating leverage to date; tightening cost growth versus revenue growth is needed to improve ROE.

Growth Assessment

Revenue growth of 21.3% YoY is solid for the company’s scale, indicating continuing adoption. Gross margin at 55.1% supports a software-led model but is not yet at best-in-class SaaS levels, implying scope for hosting, support, and pricing optimization. Operating margin remains negative (-1.6%), showing limited operating leverage despite growth. Ordinary income (-0.85) and net income (-0.93) reflect ongoing investment and some below-the-line drag. The large delta from operating income to profit before tax (-4.61) implies non-recurring items or impairments that could distort quarterly comparability. Without cash flow data, we cannot confirm whether growth is translating into cash; this is critical for sustainability. Outlook hinges on: maintaining >20% revenue growth, lifting gross margin toward high-50s/60%, and reining in SG&A to converge toward break-even. Near-term profit quality is mixed; medium-term improvement is feasible if cost discipline and pricing/unit economics strengthen.

Financial Health

Liquidity is strong: current ratio 257.5% and quick ratio 257.5%, supported by cash and deposits of 25.64 (100M JPY) against current liabilities of 12.83. No warning on current ratio (<1.0) as it is comfortably above threshold. Solvency is reasonable with D/E at 0.59x and total liabilities of 15.14 versus equity of 25.69. Maturity mismatch risk appears low: short-term loans (5.00) are well covered by cash (25.64) and receivables (6.31). Long-term loans are modest at 2.19. Interest coverage is weak at -7.54x due to negative operating income, indicating sensitivity to any increase in interest rates or further earnings deterioration. No off-balance sheet obligations were disclosed in the provided data. Overall, balance sheet strength provides runway despite losses.

Cash Flow Quality

Operating cash flow, investing cash flow, and free cash flow were not disclosed, so OCF/Net Income and FCF coverage cannot be assessed. Given negative operating income and interest coverage, near-term cash generation is likely weak, but the sizeable cash balance provides a buffer. With AR at 6.31 (100M JPY) and no inventory reported, working capital risk seems manageable; however, without OCF we cannot rule out collection delays or timing effects. There are no explicit signs of working capital manipulation in the disclosed data, but the absence of cash flow statements is a material limitation for earnings quality analysis. FCF sustainability for dividends or higher capex cannot be evaluated.

Dividend Sustainability

Dividend data were not reported, and the company posted a net loss (-0.93). With ROIC at -8.0% and negative operating income, distributions would not be supported by earnings. FCF coverage is not calculable due to missing cash flow disclosures. Policy-wise, given growth investments and current losses, internal reinvestment is likely prioritized over dividends. Until sustained positive OCF and operating margin are achieved, dividend capacity appears limited.

Risk Assessment

Business Risks:

• Execution risk in scaling sales while improving unit economics (SG&A currently exceeding gross profit).
• Product and pricing risk: gross margin at 55.1% leaves less cushion than top-tier SaaS peers.
• End-market cyclicality and budget constraints in construction/field-tech customers could slow adoption.
• Dependence on continued double-digit growth to reach operating break-even.

Financial Risks:

• Negative ROIC (-8.0%) indicating value dilution if sustained.
• Weak interest coverage (-7.54x) from operating losses, heightening sensitivity to rate increases.
• Potential extraordinary losses (gap between operating income and PBT) introduce earnings volatility.
• Reliance on cash reserves to fund losses; if burn accelerates without OCF improvement, refinancing risk could rise.

Key Concerns:

• Absence of cash flow disclosure limits assessment of earnings quality and runway.
• Large divergence between operating income (-0.58) and profit before tax (-4.61) suggests undisclosed one-off items or impairments.
• SG&A discipline: operating leverage not evident despite 21.3% YoY revenue growth.
• Sustainability of gross margin at mid-50% range amid scaling and competitive pressure.

Investment Implications

Key Takeaways:

• Healthy revenue growth (+21.3% YoY) but margins remain negative.
• Gross margin at 55.1% is acceptable but needs improvement for robust operating leverage.
• Operating loss (-0.58) and negative ROE (-3.6%) reflect ongoing investment and cost pressure.
• Balance sheet liquidity is strong (cash 25.64; current ratio 257.5%).
• Interest coverage is weak (-7.54x), and ROIC is negative (-8.0%), both key quality flags.
• Unexplained P/L items between operating income and PBT introduce result volatility.
• Cash flow statements are missing; confirming cash conversion is a priority.

Metrics to Watch:

• Operating cash flow and free cash flow (quarterly trend and OCF/NI).
• ARR growth, net revenue retention, and churn (to validate sustainability of +21.3% YoY).
• Gross margin trajectory toward high-50s/60%+.
• SG&A as a percentage of revenue and sales productivity (CAC payback).
• Operating margin breakeven timing and interest coverage improvement.
• Receivables collection (DSO) given AR of 6.31 and revenue growth.

Relative Positioning: Relative to Japan SaaS peers, revenue growth is respectable but margins are weaker and capital efficiency (ROIC, ROE) lags; liquidity is stronger than many early-stage peers, providing runway to pursue efficiency improvements.

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