BASE,Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥14.05B
• Operating Income: ¥1.15B
• Net Income: ¥687M
• EPS: ¥7.87

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

BASE Inc. (4477) delivered solid topline and profit growth in FY2025 Q3 (consolidated, JGAAP). Revenue rose 24.4% year over year to ¥14.052 billion, indicating sustained user and/or transaction volume momentum. Gross profit reached ¥5.024 billion, translating to a gross margin of 35.8%, consistent with a platform/payment model where variable processing-related costs are material. Operating income increased 43.2% YoY to ¥1.145 billion, yielding an operating margin of 8.15%, evidencing operating leverage as costs grew below revenue. Ordinary income was ¥1.174 billion (margin 8.36%), modestly above operating income due to net non-operating gains. Net income was ¥906 million, up 31.8% YoY, with a net margin of 6.45%. DuPont ROE calculates to 6.42%, driven by 6.45% net margin, asset turnover of 0.30x, and financial leverage of 3.33x. Balance sheet strength appears adequate: total assets ¥46.912 billion, equity ¥14.103 billion, and an equity ratio we calculate at approximately 30.1% (versus the reported 0.0% placeholder). Liquidity is comfortable with a current ratio of 141.9% and working capital of ¥13.364 billion; current assets comprise 96.5% of total assets, and current liabilities 97.6% of total liabilities. Interest expense is minimal at ¥10 million with interest coverage of 114.5x, reducing near-term refinancing risk. Cash flow statements and several ancillary metrics (e.g., depreciation/amortization, cash & equivalents) are unreported; as such, EBITDA and OCF-based quality metrics in the provided summary are not decision-useful. Despite these limitations, the reported P&L and balance sheet data indicate improving profitability supported by revenue growth and cost discipline. Implied below-the-line items and tax expense suggest an effective tax rate likely in low double digits, though exact reconciliation is not disclosed. The company pays no dividend (DPS ¥0), consistent with a reinvestment or cash-conservation stance. Overall, we see strengthening core profitability, moderate leverage, and adequate liquidity; however, incomplete cash flow disclosure limits assessment of earnings-to-cash conversion. Key watchpoints include sustaining operating leverage, managing working-capital-intensive settlement flows, and visibility on extraordinary items. The outlook hinges on execution in scaling the platform while maintaining take-rate economics and disciplined cost control.

Profitability Analysis

roe_decomposition:

• net_profit_margin: 6.45%
• asset_turnover: 0.300x
• financial_leverage: 3.33x
• calculated_roe: 6.42%
• commentary: ROE is primarily supported by positive net margins and moderate leverage; asset turnover of ~0.30x reflects a cash/settlement-heavy balance sheet typical of platform/payment models. margin_quality:
• gross_margin: 35.8% (¥5,024m GP on ¥14,052m revenue)
• operating_margin: 8.15% (¥1,145m OI)
• ordinary_margin: 8.36% (¥1,174m)
• net_margin: 6.45% (¥906m)
• opex_intensity: SG&A implied at ¥3,879m (~27.6% of revenue).
• commentary: Gross margin supports the cost-to-serve of payments/logistics; operating margin expansion vs revenue growth signals cost discipline and scalable overhead. operating_leverage:
• growth_vs_margin: Revenue +24.4% YoY; Operating income +43.2% YoY.
• interpretation: Positive operating leverage as fixed/semifixed costs grow slower than revenue, leading to faster profit growth than sales.

Growth Assessment

revenue_sustainability: YoY revenue growth of 24.4% suggests healthy platform activity; sustainability will depend on merchant acquisition/retention, GMV growth, and take-rate stability. profit_quality: Net income growth (+31.8% YoY) exceeds sales growth, consistent with margin expansion; ordinary income above operating income implies modest net non-operating gains. outlook: If growth persists and cost discipline continues, margins can remain stable to slightly expanding; watch for potential normalization of growth rates and any changes in payment processing costs that could affect gross margin.

Financial Health

liquidity:

• current_ratio: 141.9% (CA ¥45,252m / CL ¥31,888m)
• quick_ratio: 141.9% (no inventories reported)
• working_capital: ¥13,364m
• commentary: Comfortable short-term coverage; current assets and liabilities dominate the balance sheet, consistent with settlement-cycle dynamics. solvency:
• equity_ratio: ≈30.1% (Equity ¥14,103m / Assets ¥46,912m)
• debt_to_equity: 2.32x (Liabilities/Equity)
• interest_coverage: 114.5x (OI/Interest expense)
• commentary: Moderate leverage with strong interest coverage; solvency risk appears contained given low interest burden. capital_structure: Liabilities are largely current (97.6% of total), implying reliance on short-term settlement-related liabilities rather than long-term debt.

Cash Flow Quality

earnings_quality: Operating cash flow is unreported for the period; thus, we cannot validate earnings-to-cash conversion or compute OCF/NI. fcf_analysis: Free cash flow is unreported; capex and D&A are also unreported, making EBITDA/FCF interpretations unavailable. working_capital: Positive working capital (¥13.364bn) supports liquidity, but the current-heavy structure suggests potential sensitivity to transaction settlement timing; changes in payables/receivables will materially influence OCF.

Dividend Sustainability

payout_ratio_assessment: No dividend declared (DPS ¥0; payout 0%). With net income of ¥906m, there is capacity to consider distributions, but policy appears to prioritize reinvestment or balance sheet flexibility. fcf_coverage: Unavailable; FCF not disclosed, so dividend coverage cannot be assessed quantitatively. policy_outlook: Absent stated policy changes, continued retention is likely until cash flow visibility and growth investment needs are clearer.

Risk Assessment

Business Risks:

• Dependence on transaction volumes and merchant activity for revenue growth.
• Pressure on gross margin from payment processing and logistics costs.
• Potential normalization of pandemic-era or cyclical e-commerce growth tailwinds.
• Competitive intensity in e-commerce enablement and online payments.
• Regulatory and compliance risks related to payments and data privacy.

Financial Risks:

• High proportion of current assets and liabilities exposes cash flows to settlement-cycle timing.
• Moderate leverage (Liabilities/Equity 2.32x) could amplify earnings volatility, though interest burden is low.
• Limited visibility due to unreported cash flow and depreciation data, hindering assessment of cash generation and asset reinvestment needs.
• Potential extraordinary items affecting net income volatility (implied difference between ordinary and pre-tax earnings).

Key Concerns:

• Sustainability of operating leverage if revenue growth slows.
• Gross margin sensitivity to variable processing and logistics costs.
• Lack of disclosed OCF/FCF and D&A impairs earnings quality assessment.

Investment Implications

Key Takeaways:

• Strong YoY revenue growth (+24.4%) with outsized operating income growth (+43.2%) demonstrates operating leverage.
• Margins are healthy: GM 35.8%, OPM 8.15%, NPM 6.45%.
• ROE of 6.42% is supported by moderate leverage (3.33x) and improving profitability.
• Liquidity is adequate (current ratio 142%; working capital ¥13.4bn) with strong interest coverage (114.5x).
• Cash flow data are not disclosed; earnings-to-cash conversion remains a key unknown.
• No dividend (DPS ¥0), suggesting focus on reinvestment and/or liquidity preservation.

Metrics to Watch:

• GMV growth and take rate (proxy: revenue growth vs merchant/base metrics).
• Gross margin trajectory vs payment/logistics cost trends.
• SG&A as a percentage of revenue to gauge operating leverage sustainability.
• Operating cash flow and free cash flow once disclosed.
• Working capital movements (receivables/payables) tied to settlement cycles.
• Extraordinary items and effective tax rate normalization.

Relative Positioning: Within Japanese e-commerce/payment-enablement peers, BASE exhibits solid growth and improving operating leverage with moderate balance sheet leverage; however, relative assessment of cash conversion and reinvestment needs is constrained by unreported cash flow and D&A data.

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