Spacemarket,Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥1.76B
• Operating Income: ¥122M
• Net Income: ¥84M
• EPS: ¥9.67

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

Space Market, Inc. (TSE: 4487) delivered strong topline and earnings momentum in FY2025 Q3 under JGAAP on a consolidated basis. Revenue grew 30.0% YoY to ¥1,763m, outpacing a 53.9% YoY rise in operating income to ¥122m, indicating positive operating leverage. Net income was ¥116m (+38.2% YoY), translating to a net margin of 6.58%. Gross profit is reported at ¥1,051.6m, equating to a gross margin of 59.6%, which is robust for a marketplace/platform model. Note: cost of sales reported at ¥305.4m is inconsistent with the stated gross profit and margin; the implied cost of sales from gross profit is approximately ¥711.4m. We proceed using the internally consistent gross profit and margin figures provided. Ordinary income of ¥116m was slightly below operating income due to interest expense of ¥1.26m and other non-operating items; a small tax benefit (income tax of -¥7.58m) supported the bottom line. The DuPont breakdown is coherent with disclosures: net margin 6.58%, asset turnover 0.553x, and financial leverage 3.53x, yielding a calculated ROE of 12.85% that matches the reported figure. On the balance sheet, total assets were ¥3,187m, total liabilities ¥1,768m, and equity ¥903m; this implies an equity ratio of about 28.3% despite the reported equity ratio field showing 0.0% (treated as undisclosed). Liquidity is adequate with a current ratio of 126.8% and working capital of ¥455.1m, consistent with an asset-light model (inventories not disclosed). Interest coverage is strong at 96.5x (operating income/interest), indicating low financial stress from borrowing costs. Cash flow statement line items (operating, investing, financing CF) and cash balances are undisclosed (presented as zeros), limiting direct assessment of earnings-to-cash conversion and free cash flow. EPS was ¥9.67, but outstanding shares and book value per share were not disclosed in the XBRL (shown as zero), constraining per-share valuation analysis. The company paid no dividend (DPS 0), consistent with a reinvestment-led growth phase. Overall, profitability is improving on both margin and ROE, leverage is moderate, and liquidity is serviceable; however, the absence of cash flow disclosure and certain line-item inconsistencies merit caution when interpreting cash generation and margin structure. Near-term outlook is supported by platform scale effects and cost discipline, but monitoring revenue durability, operating expenses, and working capital intensity remains important. Data limitations are acknowledged, and analysis is based on the available non-zero metrics.

Profitability Analysis

ROE_decomposition: ROE 12.85% = Net margin 6.58% × Asset turnover 0.553 × Financial leverage 3.53. This indicates value creation driven by healthy margins and moderate balance sheet leverage, with asset efficiency in line with an asset-light marketplace. margin_quality: Gross margin is 59.6% (gross profit ¥1,051.6m on revenue ¥1,763m), consistent with a take-rate/platform revenue mix. The cost of sales figure disclosed (¥305.4m) is inconsistent with this margin; we rely on the internally consistent gross profit and margin. Operating margin is 6.9% (¥122m/¥1,763m), expanding faster than revenue YoY, evidencing operating cost discipline (e.g., marketing, G&A leverage). Net margin at 6.58% benefited from a small tax credit. operating_leverage: Operating income growth (+53.9% YoY) exceeded revenue growth (+30.0% YoY), implying positive operating leverage. Given high gross margin and relatively fixed platform costs, incremental revenue likely carries attractive contribution margins.

Growth Assessment

revenue_sustainability: 30.0% YoY revenue growth suggests strong demand and/or effective monetization (potentially higher GMV or take-rate). As a marketplace, growth durability depends on user acquisition, retention, and utilization of listed spaces. profit_quality: Ordinary income (¥116m) is close to operating income (¥122m) with minimal non-operating drag (interest expense ¥1.26m), indicating core operations drive profitability. A tax benefit (-¥7.58m) aided net, which may not recur. outlook: With high gross margin and improving opex efficiency, the company appears positioned for further margin scaling if growth persists. Key to sustaining growth will be platform liquidity, supply breadth, product enhancements, and controlled customer acquisition costs.

Financial Health

liquidity: Current assets ¥2,150.4m vs current liabilities ¥1,695.2m yields a current ratio of 1.27x and quick ratio of 1.27x (inventories undisclosed), providing a reasonable liquidity buffer. Working capital stands at ¥455.1m. solvency: Total liabilities ¥1,767.8m vs equity ¥903.0m implies a liabilities-to-equity ratio of 1.96x and an equity ratio of approximately 28.3% (calculated from totals; the reported 0.0% equity ratio is treated as undisclosed). Financial leverage (assets/equity) is 3.53x, moderate for a platform business. capital_structure: Interest expense is low at ¥1.26m with interest coverage of 96.5x (OI/interest), indicating minimal near-term refinancing risk. Specific debt composition and cash balances are not disclosed, limiting deeper assessment.

Cash Flow Quality

earnings_quality: Cash flow items are undisclosed (zeros indicate not reported), so OCF/Net income and FCF-based quality checks cannot be performed. Earnings appear predominantly operating in nature given the small non-operating items. FCF_analysis: Free cash flow cannot be calculated due to absent OCF and capex data. With an asset-light model, maintenance capex is likely modest, but this remains an assumption pending disclosure. working_capital: Positive working capital of ¥455.1m supports liquidity. Without cash flow detail, we cannot evaluate collection cycles, payables discipline, or booking prepayments that may influence period cash conversion.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0 and payout ratio is 0%, consistent with reinvestment during a growth phase. With net income of ¥116m and moderate leverage, the capacity to introduce dividends in the future would depend on sustained OCF and capex needs. FCF_coverage: FCF is undisclosed; hence, dividend coverage cannot be assessed. Current policy indicates retention of earnings to fund growth and platform investment. policy_outlook: Given the scale-up stage and positive operating leverage, maintaining a no-dividend stance appears consistent with growth prioritization until cash generation visibility improves.

Risk Assessment

Business Risks:

• Marketplace two-sided network effects risk (seller/buyer imbalance impacting liquidity).
• Competitive pressure from horizontal and vertical venue-booking platforms.
• Demand cyclicality tied to consumer and corporate event spending.
• Customer acquisition cost inflation and dependence on digital ad platforms.
• Platform disintermediation risk and take-rate sensitivity.
• Regulatory and zoning constraints affecting space utilization.
• Service quality and safety/liability management for hosted spaces.
• Data privacy, cybersecurity, and payment processing risks.

Financial Risks:

• Limited disclosure of cash and cash flows constrains visibility into liquidity runway.
• Potential working capital swings (prepayments, deposits, payables) affecting cash conversion.
• Tax benefit this period may reverse or normalize, affecting net margin.
• Moderate leverage (assets/equity 3.53x; liabilities/equity 1.96x) amplifies equity sensitivity to earnings volatility.
• Interest rate risk is currently modest given low interest expense but could rise with additional borrowings.

Key Concerns:

• Inconsistency between reported cost of sales and gross profit/margin.
• Absence of operating, investing, and financing cash flow disclosures.
• Zero values for key per-share and cash metrics (treated as undisclosed) hinder valuation and cash coverage analysis.

Investment Implications

Key Takeaways:

• Strong revenue growth (+30% YoY) with outsized operating income growth (+53.9% YoY) indicates operating leverage.
• Healthy gross margin of 59.6% supports scalability of the platform model.
• ROE at 12.85% is solid, driven by margin improvement and moderate leverage.
• Liquidity is adequate (current ratio 1.27x; working capital ¥455m) with very high interest coverage (96.5x).
• Disclosure gaps in cash flow and selected balance sheet details limit assessment of cash conversion and capital needs.

Metrics to Watch:

• Operating cash flow and free cash flow once disclosed.
• Contribution margin and operating margin progression.
• Customer acquisition cost (CAC), lifetime value (LTV), and cohort retention/booking frequency.
• GMV growth and take-rate trends (implied gross margin stability).
• Working capital movements (receivables, payables, deferred revenue) and cash balance.
• Effective tax rate normalization post current-period tax benefit.

Relative Positioning: Among domestic asset-light marketplace peers, Space Market exhibits above-market topline growth with improving profitability and a moderate balance sheet. However, peer comparison on cash generation and per-share metrics is constrained by current disclosure gaps.

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