BASE CO.,LTD. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥16.47B
• Operating Income: ¥4.42B
• Net Income: ¥2.64B
• EPS: ¥167.09

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

ベース株式会社 (44810) reported robust FY2025 Q3 results under JGAAP on a consolidated basis, with revenue of ¥16.473bn, up 11.8% YoY, indicating healthy demand and effective execution. Operating income grew faster than sales at +16.6% to ¥4.416bn, implying positive operating leverage and disciplined cost control. Net income rose 17.7% to ¥3.085bn, with a net margin of 18.73%, underscoring efficient operations and limited financing burden. Gross profit of ¥4.706bn translates to a gross margin of 28.6%, while the operating margin is approximately 26.8% (operating income/revenue), highlighting strong cost discipline beyond cost of sales. Ordinary income of ¥4.462bn exceeded operating income by about ¥46m, suggesting modest non-operating gains. The DuPont analysis shows a calculated ROE of 21.69% driven by a solid net margin (18.73%), healthy asset turnover (0.931x), and moderate financial leverage (1.24x). The balance sheet is conservative: total assets are ¥17.688bn and total liabilities are ¥4.159bn, implying assets-to-equity of ~1.24x and a liabilities-to-equity ratio of ~0.29x. Liquidity appears strong with current assets of ¥15.902bn versus current liabilities of ¥4.145bn, yielding a current ratio of ~3.84x and substantial working capital of ¥11.757bn. Interest expense is negligible (¥3k), resulting in an effectively unlimited interest coverage ratio, which reduces refinancing risk. Based on ordinary income and income tax of ¥1.169bn, the implied effective tax rate is circa 26.2%, consistent with Japan’s statutory range, despite the “0.0%” placeholder appearing in the provided calculated metrics. Equity ratio was listed as 0.0% in the summary data, but using the reported balance sheet, equity of ¥14.223bn over assets of ¥17.688bn implies an equity ratio of about 80.4%. EPS was ¥167.09; back-solving implies an outstanding share count of roughly 18.5 million, though shares outstanding were not disclosed in the dataset. Cash flow statement data were not disclosed (OCF/FCF shown as zero placeholders), so cash conversion and free cash flow coverage cannot be assessed from this release. Dividends were listed as zero (DPS 0 and payout 0%), which may reflect a retained-earnings focus or simply the absence of disclosure in this period. Overall profitability quality looks strong on the face of margins and ROE, but the absence of cash flow data limits the assessment of earnings quality and dividend capacity. The company’s low leverage, strong liquidity, and expanding margins position it well to navigate macro volatility. Key monitoring points include sustained revenue momentum, operating leverage durability, and confirmation of cash generation once cash flow data are available.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 18.73%
• asset_turnover: 0.931x
• financial_leverage: 1.24x (Assets/Equity ≈ 17.688/14.223)
• calculated_ROE: 21.69%
• commentary: ROE is primarily driven by strong net margins and respectable asset turnover, with only modest leverage contribution. margin_quality:
• gross_margin: 28.6% (GP ¥4.706bn / Revenue ¥16.473bn)
• operating_margin: ≈26.8% (OI ¥4.416bn / Revenue ¥16.473bn)
• ordinary_margin: ≈27.1% (Ordinary income ¥4.462bn / Revenue ¥16.473bn)
• net_margin: 18.73% (provided)
• tax_rate: ≈26.2% (Income tax ¥1.169bn / Ordinary income ¥4.462bn)
• notes: Ordinary income exceeds operating income by ~¥46m, indicating positive non-operating balance. Margin structure suggests disciplined operating costs beyond COGS. operating_leverage: Revenue +11.8% YoY vs Operating income +16.6% YoY indicates positive operating leverage, implying good scalability of the cost base and/or richer mix. Sustainability to be confirmed against future quarters.

Growth Assessment

revenue_sustainability: Double-digit revenue growth (+11.8% YoY) points to healthy demand and execution. No segment or order backlog data were provided; therefore, visibility into future revenue is limited based on this disclosure alone. profit_quality: Profit expansion outpaced sales, driven by operating leverage and likely mix/efficiency gains. Tax rate (~26%) appears normal, and non-operating items are modest. Lack of D&A disclosure prevents assessment of EBIT-to-EBITDA bridge. outlook: Given strong margins and low leverage, the company appears positioned to continue investing for growth. However, absence of cash flow and backlog information constrains confidence in forecasting the durability of current growth trends.

Financial Health

liquidity:

• current_ratio: ≈3.84x (CA ¥15.902bn / CL ¥4.145bn)
• quick_ratio: ≈3.84x (no inventories disclosed)
• working_capital: ¥11.757bn
• commentary: Ample short-term liquidity with significant buffer to cover near-term obligations. solvency_capital_structure:
• total_assets: ¥17.688bn
• total_liabilities: ¥4.159bn
• total_equity: ¥14.223bn
• equity_ratio: ≈80.4% (vs reported 0.0% placeholder)
• debt_to_equity: ≈0.29x (Liabilities/Equity)
• interest_coverage: ≈1,472,000x (Operating income/Interest expense)
• commentary: Very conservative balance sheet with minimal financing costs and strong equity buffer.

Cash Flow Quality

earnings_quality: Cash flow data (OCF/FCF) were not disclosed; zeros shown should be treated as placeholders. As such, conversion of earnings to cash cannot be assessed from this dataset. FCF_analysis: Unavailable due to undisclosed OCF and capex. The sizable working capital and strong profitability suggest potential for positive FCF, but confirmation requires actual cash flow figures. working_capital: Current assets substantially exceed current liabilities; however, without detail on receivables and payables turnover, the efficiency of working capital use cannot be judged.

Dividend Sustainability

payout_ratio_assessment: Payout ratio listed as 0.0% and DPS as 0.00, likely indicating no dividend for the period or lack of disclosure. With EPS at ¥167.09, theoretical capacity exists, but actual policy and cash coverage are unknown. FCF_coverage: Not assessable; FCF undisclosed (zeros are placeholders). policy_outlook: Given strong profitability and conservative leverage, the company could support distributions, but absent cash flow and stated policy, the stance appears to favor reinvestment or retention for now.

Risk Assessment

Business Risks:

• Growth normalization risk if demand moderates after strong YoY expansion.
• Dependence on non-disclosed segment/client concentration could elevate volatility.
• Pricing pressure and wage inflation potentially compressing margins.
• Execution risk in scaling operations while maintaining quality and utilization.
• Competitive intensity in the company’s markets (IT services/software assumed) potentially eroding margins.

Financial Risks:

• Cash flow uncertainty due to undisclosed OCF and capex.
• Working capital swings (receivables collection) could impact cash conversion.
• Tax rate variability around the ~26% level may affect net margins.
• Limited hedging disclosure; exposure to macro/currency factors unknown.

Key Concerns:

• Absence of cash flow statement prevents verification of earnings quality.
• Equity ratio reported as 0.0% in summary metrics conflicts with balance sheet; reliance on recalculated figure is necessary.
• No disclosure on dividends beyond zero DPS, limiting visibility on capital allocation.

Investment Implications

Key Takeaways:

• Strong top-line growth (+11.8% YoY) with even stronger operating profit growth (+16.6%), evidencing operating leverage.
• High quality margin profile: GM 28.6%, OPM ≈26.8%, NPM 18.73%.
• ROE 21.69% supported by robust margins and moderate leverage (Assets/Equity ~1.24x).
• Very conservative balance sheet: equity ratio recalculated at ~80%, D/E ~0.29x, minimal interest burden.
• Cash flow metrics not disclosed; earnings-to-cash conversion remains a key unknown.
• Dividend not indicated (DPS 0), suggesting retention or lack of disclosure this period.

Metrics to Watch:

• Order intake/backlog and pipeline conversion to sustain revenue growth.
• Operating margin trend and cost discipline (personnel and subcontracting ratios, if disclosed).
• Cash flow from operations and free cash flow once reported (OCF/NI, FCF margin).
• Working capital efficiency (DSO/DPO) and receivables collection.
• Tax rate stability and non-operating items impact on ordinary income.
• Capital allocation signals (dividend policy or buybacks) in future disclosures.

Relative Positioning: Based on disclosed profitability and balance sheet strength, the company appears above sector median on margins and ROE with lower financial risk; however, lack of cash flow disclosure tempers relative quality assessment until conversion is confirmed.

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