Speee,Inc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥16.43B
• Operating Income: ¥-685M
• Net Income: ¥-950M
• EPS: ¥-84.88

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Verdict: FY2025 Q4 was weak, with modest topline growth (+4.5% YoY) but a larger net loss, negative operating cash flow, and continued operating losses. Revenue reached 164.35, while gross profit was 128.12 at a high gross margin of 78.0%. SG&A (134.98) exceeded gross profit, resulting in operating income of -6.85 (operating margin -4.2%). Ordinary income was -6.61 and net income -9.50 (EPS basic -84.88 yen). Non-operating items were small (income 0.59, expenses 0.35), with interest income 0.10 and interest expense 0.17. The OCF/NI ratio was 0.79x, signaling weaker earnings quality (OCF -7.51 vs NI -9.50). Free cash flow was negative at -9.02 despite modest capex (-0.40), indicating core operations consumed cash. Liquidity remains strong (current ratio 309%, cash and deposits 93.95 vs current liabilities 42.11), reducing near-term funding risk. Leverage is moderate (D/E 1.03x; equity-to-assets ~49.2%), but interest coverage is deeply negative (-39.86x) due to operating losses. ROE was -13.0% driven by a negative net margin (-5.8%), with asset turnover at 1.109 and leverage at 2.03x. Margin direction in basis points cannot be precisely quantified due to lack of prior-period margin disclosure, but YoY operating income declined by 36.1%, implying margin pressure. The effective tax rate was -23.5%, reflecting tax expense despite a pre-tax loss and adding to the net loss. Financing cash inflows were large (+53.10), likely debt-funded (long-term loans 31.31 outstanding), masking the negative FCF at the consolidated cash level. Forward-looking, the company must realign SG&A with revenue growth, improve cash conversion, and restore operating margin to achieve sustainable profitability. With a high gross margin business model, incremental operating discipline could yield strong operating leverage, but near-term risks stem from loss-making operations and reliance on financing.

Profitability Analysis

ROE decomposition (DuPont): ROE (-13.0%) = Net Profit Margin (-5.8%) × Asset Turnover (1.109) × Financial Leverage (2.03x). The dominant driver of the negative ROE is the negative net margin, as asset turnover is reasonable for a tech/marketing model and leverage is only moderate. Operating losses stem from SG&A (134.98) exceeding gross profit (128.12), compressing operating margin to -4.2% (calc). Non-operating items were not large enough to offset the operating shortfall, and taxes further deepened the loss (effective tax rate -23.5%). The business reason for the margin deterioration appears to be cost growth in SG&A outpacing revenue (+4.5% YoY revenue vs unknown SG&A YoY, but SG&A/revenue is elevated at ~82.1%). This suggests inadequate operating leverage and potentially higher personnel, marketing, or platform costs to drive growth. Sustainability: Without SG&A discipline or acceleration in revenue growth, negative operating margin is likely to persist; however, the structurally high gross margin (78.0%) provides room for rapid margin recovery if costs are contained. Concerning trend: SG&A intensity at ~82% of revenue is too high relative to gross profit, implying insufficient scale economies and limiting earnings visibility.

Growth Assessment

Revenue grew 4.5% YoY to 164.35, but profitability deteriorated with operating income at -6.85 and net income at -9.50. Gross profit increased to 128.12, sustaining a strong 78.0% margin, indicative of a high-value-added service mix. However, SG&A at 134.98 outweighed gross profit, preventing operating leverage from revenue growth. Non-operating items were minor and did not change the earnings trajectory. Margin expansion/compression in bps cannot be quantified due to missing prior-period margin data; directionally, operating margin worsened given the YoY decline in operating income. Profit quality is weak: OCF -7.51 versus NI -9.50 (OCF/NI 0.79x) suggests cash conversion issues, likely from working capital draw and loss-making operations. Outlook hinges on curbing SG&A growth and/or accelerating revenue; given strong liquidity, the company has runway to execute restructuring or growth initiatives, but near-term profit recovery is uncertain without cost actions.

Financial Health

Liquidity is strong: current ratio 309.3% and quick ratio 309.3%, with cash and deposits 93.95 comfortably exceeding current liabilities 42.11. Solvency is moderate: D/E 1.03x and equity-to-assets approximately 49.2% (72.89/148.13). Interest-bearing debt detail is partly unreported, but long-term loans are 31.31; interest coverage is severely negative (-39.86x), highlighting earnings risk rather than immediate liquidity stress. No explicit maturity mismatch is evident given high cash vs short-term obligations; refinancing risk concentrates on long-term loans if losses persist. Off-balance sheet obligations are not disclosed in the provided data. No explicit warning triggers for Current Ratio (<1.0) or D/E (>2.0).

Cash Flow Quality

OCF/Net Income is 0.79x (<0.8), indicating weaker earnings quality; losses are not fully translating into cash outflows, but cash generation remains negative. Free cash flow is -9.02 (OCF -7.51 plus investing), despite low capex (-0.40), implying that core operations, not investment, drive the cash burn. Financing CF of +53.10 backstops liquidity, likely via debt, which is not a sustainable substitute for operating cash generation. Working capital signals: accounts receivable at 30.84 (~18.8% of revenue) and accounts payable at 5.83 (~3.6% of revenue) suggest limited supplier financing and potential cash drag; no explicit signs of aggressive working capital release (e.g., payables stretch) are observed in the snapshot.

Dividend Sustainability

Dividend data is unreported; given negative net income and negative FCF, any cash dividends would be economically uncovered. With OCF negative and capex modest, priority should be restoring positive OCF before considering distributions. Balance sheet liquidity is ample, but using financing inflows to fund dividends would be imprudent and likely inconsistent with sustainable policy. Absent explicit guidance, the base case is a conservative stance on dividends until profitability and FCF recover.

Risk Assessment

Business Risks:

• Operating losses driven by SG&A exceeding gross profit, limiting scalability.
• Execution risk in achieving cost discipline while sustaining revenue growth.
• Potential customer demand cyclicality in digital marketing/IT-related services.
• Pricing pressure and competitive intensity impacting unit economics.

Financial Risks:

• Negative operating cash flow (-7.51) and negative FCF (-9.02) requiring continued financing.
• Interest coverage deeply negative (-39.86x), raising medium-term covenant/refinancing risk if losses persist.
• Tax expense despite pre-tax loss (effective tax rate -23.5%) exacerbates bottom-line pressure.
• Moderate leverage (D/E 1.03x) could rise if additional financing is needed.

Key Concerns:

• Net margin -5.8% driving ROE -13.0%; ROIC -66.9% indicates poor capital efficiency.
• SG&A intensity (~82% of revenue) impedes operating leverage.
• OCF/NI 0.79x indicates weak cash conversion.
• Reliance on financing cash inflows (+53.10) to support liquidity.

Investment Implications

Key Takeaways:

• Topline grew modestly (+4.5%) but failed to translate into profits due to elevated SG&A.
• High gross margin (78.0%) suggests potential for rapid earnings recovery with cost control.
• Cash position is strong relative to current liabilities, reducing near-term liquidity risk.
• Earnings quality is weak (OCF/NI 0.79x; FCF negative), necessitating operational fixes.
• Leverage is moderate but coverage is poor, making profit normalization a priority.

Metrics to Watch:

• Operating margin and SG&A-to-revenue ratio (target: sustained reduction).
• OCF/Net income (target: >1.0) and FCF trajectory.
• Receivables and payables turnover (cash conversion cycle).
• Debt and interest expense trend; any covenant disclosures.
• Revenue growth acceleration vs. headcount/marketing cost growth.

Relative Positioning: Within Japanese small/mid-cap digital/IT services peers, Speee exhibits solid gross margins but weaker operating leverage and cash conversion. Liquidity is above average, solvency is acceptable, but profitability and capital efficiency lag peers that deliver positive OPM and FCF.

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