Safie Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥13.46B
• Operating Income: ¥-95M
• Net Income: ¥-1.27B
• EPS: ¥0.70

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

Safie Inc. (TSE: 4375) delivered robust top-line momentum in FY2025 Q3 with revenue of ¥13,464 million, up 27.9% YoY, indicating solid demand and effective scaling of its core offerings. Despite the strong growth, operating income remained slightly negative at ¥-95 million, essentially flat YoY, suggesting the company is nearing breakeven but has not yet translated growth into sustained operating profitability. Gross profit was ¥5,256 million, implying a gross margin of 39.0%, which is reasonable for a platform-centric model but leaves room for further improvement via mix and scale. Ordinary income was ¥-117 million, reflecting minor non-operating headwinds relative to operating loss. Net income, however, came in positive at ¥39 million (net margin 0.29%), pointing to non-operating or extraordinary tailwinds and/or tax effects under JGAAP. The DuPont decomposition yields a calculated ROE of 0.45%, driven by low net margin (0.29%), decent asset turnover (1.212x), and modest financial leverage (1.27x). Liquidity is a clear strength: the current ratio stands at 425.4% and working capital is ¥7,838 million, providing significant operational flexibility. The debt profile appears conservative given interest expense of only ¥0.231 million and a reported debt-to-equity ratio of 0.28x, indicating limited financial risk from leverage. Operating leverage looks to be improving: rapid revenue growth with operating loss essentially unchanged implies opex scaling discipline and progress toward profitability. Cash flow figures are not disclosed in this dataset (zeros denote unreported), limiting assessment of earnings-to-cash conversion and FCF durability. Similarly, depreciation and amortization are not reported here, constraining EBITDA analysis and margin normalization. No dividend is paid (DPS ¥0.00), appropriate for a company near breakeven and investing for growth; payout and FCF coverage metrics are therefore not meaningful from this dataset. The equity ratio is shown as 0.0% in the feed but should be treated as undisclosed; based on assets of ¥11,113 million and equity of ¥8,719 million, the implied equity ratio would be high, consistent with the strong balance sheet. Overall, Safie is demonstrating healthy growth and improving operating leverage, with ample liquidity and limited financial risk, but still needs to convert revenue growth into consistent operating and cash profitability. Key near-term focuses include gross margin trajectory, opex discipline, and visibility into operating cash flow and capital allocation. Data limitations (notably cash flow and D&A) warrant caution in interpreting earnings quality and coverage metrics.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 0.29%
• asset_turnover: 1.212x
• financial_leverage: 1.27x
• calculated_ROE: 0.45%
• interpretation: ROE is driven primarily by efficient asset use and modest leverage, with margin still the main bottleneck. Sustained improvements in operating margin would have the largest impact on ROE. margin_quality:
• gross_margin: 39.0% (Gross profit ¥5,255,768 thousand on revenue ¥13,464,000 thousand)
• operating_margin: -0.7% (Operating income ¥-95,000 thousand)
• ordinary_margin: -0.9% (Ordinary income ¥-117,000 thousand)
• net_margin: 0.29% (Net income ¥39,000 thousand)
• notes: Positive net income despite operating loss suggests non-operating gains or tax effects. D&A not disclosed; true EBITDA margin cannot be assessed from this dataset. operating_leverage:
• commentary: Revenue grew 27.9% YoY while operating loss was flat YoY, indicating improving operating leverage as fixed costs are absorbed by higher scale. Further scaling and mix optimization should allow operating margin to cross into positive territory if growth persists.

Growth Assessment

revenue_sustainability: Top-line growth of 27.9% YoY signals strong demand and likely expansion in subscriptions and platform usage. The absence of inventory suggests an asset-light model with scalable distribution/channel partnerships. profit_quality: Net profit is positive but largely a product of non-operating/tax items given the operating loss. Core profit quality hinges on converting gross profit into positive operating income through opex discipline. outlook: With healthy asset turnover (1.212x) and improving operating leverage, Safie appears positioned to approach operating breakeven. Sustaining 20%+ growth while stabilizing gross margin and controlling SG&A should drive incremental profitability.

Financial Health

liquidity:

• current_assets: ¥10,246,326 thousand
• current_liabilities: ¥2,408,521 thousand
• current_ratio: 425.4%
• quick_ratio: 425.4% (no inventories reported)
• working_capital: ¥7,837,805 thousand
• assessment: Very strong liquidity provides cushion for growth investments and operating volatility. solvency_capital_structure:
• total_assets: ¥11,113,000 thousand
• total_liabilities: ¥2,454,920 thousand
• total_equity: ¥8,719,000 thousand
• debt_to_equity: 0.28x (as provided)
• interest_expense: ¥231 thousand
• interest_coverage: -411.3x (operating loss basis)
• assessment: Low interest burden suggests minimal financial leverage risk. The reported equity ratio in the feed is 0.0% but should be treated as undisclosed; balance sheet composition implies a high equity buffer.

Cash Flow Quality

earnings_quality: OCF not disclosed; OCF/Net Income shown as 0.00 reflects non-reporting rather than true cash performance. As such, we cannot corroborate earnings with cash conversion this period. free_cash_flow_analysis: FCF not disclosed. Without capex and OCF detail, FCF sustainability cannot be evaluated. working_capital_dynamics: Large positive working capital (¥7.84bn) supports operations; however, the lack of cash flow detail prevents assessment of receivables/payables turns and underlying cash conversion cycle.

Dividend Sustainability

payout_ratio_assessment: No dividend (DPS ¥0.00; payout ratio 0.0%). Given near-breakeven earnings and growth investments, a non-distributing stance aligns with balance sheet preservation. FCF_coverage: Not assessable due to undisclosed OCF/FCF. policy_outlook: Continuation of a reinvestment-focused policy appears likely until the company consistently generates positive operating and free cash flows.

Risk Assessment

Business Risks:

• Execution risk in monetizing growth to reach sustained operating profitability.
• Gross margin sensitivity to product/service mix (e.g., hardware vs. platform subscriptions) and partner terms.
• Customer concentration or channel dependency risks common in scaling B2B platforms.
• Competitive intensity in cloud video/IoT and adjacent security solutions.
• Potential slowdown in enterprise capex or SMB demand impacting ARR growth.

Financial Risks:

• Limited visibility into cash generation due to undisclosed OCF and FCF.
• Operating loss persists; reliance on balance sheet to fund scaling until breakeven.
• Interest coverage negative on an operating basis, though absolute interest burden is small.
• Equity ratio unreported in the feed; though implied equity is strong, lack of disclosure limits precision.

Key Concerns:

• Sustained negative operating income despite strong growth.
• Unreported cash flow metrics hinder assessment of earnings quality and runway.
• Dependence on non-operating items/tax effects to produce positive net income.

Investment Implications

Key Takeaways:

• Revenue growth remains strong at 27.9% YoY, indicating solid demand.
• Operating leverage is improving; operating loss is minimal relative to scale.
• Balance sheet liquidity is robust with a 425% current ratio and ¥7.84bn working capital.
• ROE is low (0.45%) due to thin net margin; profitability improvement is the key lever.
• Cash flow visibility is limited; confirmation of positive OCF/FCF is a critical next step.

Metrics to Watch:

• Operating margin trajectory and timing to sustained positive EBIT.
• Gross margin trend by revenue mix and scale efficiencies.
• OCF and FCF disclosure and coverage of growth investments.
• ARR/net retention (if disclosed) as leading indicators of durable growth.
• SG&A as a percentage of revenue to gauge cost discipline.

Relative Positioning: Relative to growth-oriented TSE software/platform peers, Safie shows competitive top-line growth and conservative leverage with stronger near-term liquidity, but trails best-in-class peers on operating profitability and cash flow visibility.

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