uSonar Co.,Ltd. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥5.39B
• Operating Income: ¥1.18B
• Net Income: ¥684M
• EPS: ¥87.60

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 (cumulative) on a non-consolidated JGAAP basis, the company delivered solid top-line growth and strong operating leverage. Revenue increased 13.3% year over year to ¥5,395 million, while operating income rose 38.5% to ¥1,180 million, implying material margin expansion. Gross profit of ¥3,418 million translates to a high gross margin of 63.3%, consistent with a high value-add, software/data or service-heavy model. Operating margin improved to approximately 21.9% (¥1,180m / ¥5,395m), up roughly 4 percentage points versus the prior-year level implied by the YoY growth. Net income was ¥684 million, up 21.3% YoY, with a net margin of 12.68%, reflecting healthy profitability after taxes and minor financial expenses. Ordinary income was essentially in line with operating income (¥1,175m vs. ¥1,180m), indicating minimal non-operating noise and low interest burden (interest expense of just ¥2.3 million). DuPont analysis shows ROE at 20.46%, driven by a 12.68% net margin, 0.841x asset turnover, and 1.92x financial leverage. Based on the balance sheet totals, the computed equity ratio is approximately 52.1% (¥3,343m equity / ¥6,417m assets), suggesting a conservative capital structure despite the reported “0.0%” equity ratio figure likely reflecting an undisclosed metric. Liquidity appears comfortable with a current ratio of 194.6% and working capital of ¥1,881 million, though cash and cash flow disclosures are not available in this dataset. Interest coverage is extremely strong at roughly 507x (operating income/interest expense), reflecting low financial risk. The effective tax rate is roughly 31–32% (¥370m tax on ~¥1,175m pre-tax), notwithstanding a reported “0.0%” placeholder in the metrics. Cash flow statement items (OCF, investing, financing) show as zero, which should be interpreted as undisclosed rather than true zeros; thus, free cash flow and cash conversion cannot be assessed. Dividend data are also not disclosed (DPS and payout shown as zeros), so distribution policy and sustainability cannot be evaluated from this release alone. Overall, the quarter indicates robust execution with clear operating leverage and disciplined cost control, but the absence of cash flow and dividend disclosures limits assessment of earnings quality and capital allocation. Investors should focus on sustainability of revenue growth, durability of gross margin, and confirmation of cash generation once cash flow data are available.

Profitability Analysis

ROE_decomposition: ROE 20.46% = Net Margin 12.68% × Asset Turnover 0.841 × Financial Leverage 1.92. The result indicates that high margins are the primary driver, complemented by moderate asset efficiency and prudent leverage. margin_quality: Gross margin at 63.3% (¥3,418m/¥5,395m) is strong, consistent with a high value-add service/software profile. Operating margin is ~21.9% (¥1,180m/¥5,395m). Net margin is 12.68% (¥684m/¥5,395m), reflecting a normalized tax burden (~31.5%) and minimal interest costs. operating_leverage: Revenue grew 13.3% YoY while operating income grew 38.5% YoY, implying significant operating leverage and cost discipline. Back-solving prior-year figures implies operating margin expanded by roughly 400 bps (from ~17.9% to ~21.9%).

Growth Assessment

revenue_sustainability: Top-line growth of 13.3% YoY to ¥5,395m indicates solid demand. The high gross margin suggests pricing power and/or favorable mix, supportive of sustainability if churn is controlled and customer acquisition remains efficient. profit_quality: Ordinary income closely tracks operating income (¥1,175m vs. ¥1,180m) and interest expense is minimal (¥2.3m), indicating limited reliance on non-core items for earnings. The implied tax rate of ~31–32% appears normal for Japan, supporting quality of earnings. outlook: If the company maintains current mix and scale benefits, operating margins could remain elevated. Key sensitivities include retention/pricing in core services and cost scaling as growth continues. Confirmation of cash conversion (OCF) will be important to validate durability of growth.

Financial Health

liquidity: Current assets ¥3,871m vs. current liabilities ¥1,990m yield a current ratio of 194.6% and working capital of ¥1,881m, pointing to solid near-term liquidity. Inventories are undisclosed; quick ratio is presented as equal to the current ratio, but actual quick ratio may differ slightly if inventories exist. solvency: Total liabilities of ¥2,283m vs. equity of ¥3,343m imply a debt-to-equity ratio of ~0.68x (liabilities/equity). Computed equity ratio is ~52.1% (equity/assets), indicative of a conservative balance sheet despite the reported placeholder of 0.0%. capital_structure: Leverage is modest with financial leverage at 1.92x (assets/equity). Interest coverage is exceptionally high (~507x), suggesting ample headroom against interest rate or earnings volatility.

Cash Flow Quality

earnings_quality: Cash flow from operations is not disclosed in this dataset (reported as zero placeholder). As such, OCF/Net Income, free cash flow, and cash conversion cannot be assessed. The income statement shows limited non-operating effects, which is positive, but cash corroboration is needed. FCF_analysis: Investing and financing cash flows are undisclosed. Capex and working capital outflows are therefore unknown, preventing assessment of true free cash flow and reinvestment intensity. working_capital: Working capital is positive at ¥1,881m, supporting operations. However, without detailed receivables/payables and OCF, we cannot evaluate collection cycles or the degree of cash tied up in growth.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are not disclosed (zeros are placeholders). With EPS at ¥87.60, theoretical capacity for dividends exists, but actual payout cannot be evaluated. FCF_coverage: Free cash flow is undisclosed; hence FCF coverage of dividends cannot be assessed. policy_outlook: No dividend policy information is available in this dataset. Future commentary should be monitored for payout targets or capital return frameworks.

Risk Assessment

Business Risks:

• Revenue concentration risk if major customers or verticals dominate sales (not disclosed; needs verification).
• Pricing pressure or competitive intensity in data/software/services potentially compressing margins.
• Execution risk in scaling operations while maintaining high gross margins.
• Dependence on proprietary data or technology; potential regulatory/privacy changes impacting offerings.
• Macroeconomic slowdowns affecting IT spending and new project starts.

Financial Risks:

• Limited visibility into cash generation due to undisclosed OCF and cash balances.
• Potential working capital swings not observable without detailed cash flow data.
• Interest rate changes are low risk given minimal interest expense, but still a consideration.
• Tax rate variability affecting net margin (implied ~31–32%).

Key Concerns:

• Lack of cash flow disclosure (OCF/FCF) impedes assessment of earnings quality.
• Dividend information not disclosed, limiting view on capital allocation.
• Equity ratio reported as 0.0% appears to be a placeholder; reliance on computed metrics is necessary.

Investment Implications

Key Takeaways:

• Strong operating leverage: +13.3% revenue growth translated to +38.5% operating income growth.
• High profitability profile: 63.3% gross margin and ~21.9% operating margin.
• Robust ROE at 20.46% driven primarily by margins with moderate leverage.
• Solid balance sheet: computed equity ratio ~52.1% and interest coverage ~507x.
• Data gaps in cash flow and dividends require caution in interpreting cash conversion and payout capacity.

Metrics to Watch:

• Operating cash flow and free cash flow once disclosed (OCF/NI conversion ratio).
• Retention/churn and average revenue per customer (if disclosed) to validate sustainability.
• Gross margin trend and cost-to-serve as the business scales.
• Working capital movements (receivables/payables days) for signs of cash discipline.
• Capital expenditure intensity and any shifts in non-operating income/expenses.

Relative Positioning: Within a high-margin services/software peer set, the company’s profitability and ROE appear competitive to strong, supported by a conservative balance sheet; however, lack of cash flow visibility currently limits assessment of conversion versus best-in-class peers.

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