FUNDINNO,INC. FY2025 Q4 Earnings Report

Financial Highlights

• Operating Income: ¥213M
• Net Income: ¥394M
• EPS: ¥17.35

Income Statement

Balance Sheet

Cash Flow Statement

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

FUNDINNO (462A0) reported FY2025 Q4 consolidated results under JGAAP with a marked turnaround in profitability, driven by strong operating improvement and a large tax benefit. Operating income reached 2.13 (100M JPY), up 430.1% YoY, while ordinary income rose 435.5% YoY to 2.11 (100M JPY). Net income was 3.95 (100M JPY), up 189.9% YoY, boosted by an effective tax rate of -87.2% (income tax of -1.84 (100M JPY) on PBT of 2.11). Revenue and gross profit were not disclosed, limiting margin analysis and DuPont decomposition. The cost profile indicates an asset-light, platform-like model: cost of sales was only 2.41 versus SG&A of 20.46, suggesting that scale benefits primarily flow through SG&A efficiency rather than gross margin expansion. EBITDA was 2.29 (100M JPY) with low D&A of 0.16, underscoring limited capital intensity. Cash generation was solid: operating cash flow (OCF) was 4.02, translating to OCF/Net income of 1.02x and Free Cash Flow (FCF) of 3.71. The balance sheet is cash-heavy and conservatively leveraged, with cash and deposits of 44.97 and total assets of 54.26. Liquidity is robust: current assets of 50.55 versus current liabilities of 5.84 result in a current ratio of 865.1% and quick ratio of 865.1%. Equity stands at 48.42, implying an equity ratio of about 89.2% and a low debt-to-equity of 0.12x. Despite this strength, retained earnings remain negative at -51.47, indicating accumulated deficits that are being repaired by current profitability. Ordinary income closely tracks operating income, implying minimal non-operating distortions; the large tax credit is the primary driver of the gap between ordinary income and net income. The tax benefit may reflect loss carryforwards or deferred tax adjustments and may not recur at the same magnitude. Financing cash inflow of 1.75 suggests some reliance on external capital during the year, though liquidity needs appear modest given cash balances. EPS (basic) was 17.35 JPY on average shares of 22.81 million, consistent with reported net income of 3.95 (100M JPY). Overall, fundamentals indicate improving earnings quality, strong liquidity, and low leverage; however, the absence of revenue disclosure, the one-off nature of tax effects, and negative retained earnings warrant caution in extrapolating net profit growth.

Profitability Analysis

ROE decomposition is constrained by missing revenue and average equity; however, financial leverage is low at 1.12x, and a rough proxy for ROE using ending equity suggests about 8.2% (3.95 / 48.42), which likely overstates true ROE if average equity is higher. Net profit margin and asset turnover are not calculable due to undisclosed revenue. Operating income of 2.13 against SG&A of 20.46 indicates improving operating efficiency and likely operating leverage benefits as scale increases. The very low cost of sales (2.41) relative to SG&A implies a platform/fee-based business where gross margin is structurally high but unquantified. EBITDA of 2.29 and D&A of 0.16 indicate limited depreciation drag and suggest that earnings are not heavily dependent on capital assets. Ordinary income (2.11) is very close to operating income, with non-operating income of 0.15 and expenses of 0.17 netting to a small loss, indicating limited financial or investment income/expense impact. The large negative tax expense (-1.84) materially lifts net income above operating income and should be treated as non-core in assessing sustainable profitability. On a pre-tax basis, profitability expansion is robust (+430% YoY operating profit, +436% YoY ordinary profit), suggesting genuine core improvement even before tax effects. Given the low leverage, returns are mainly driven by operating performance rather than balance sheet gearing. Overall, margin quality looks to be improving, but the lack of revenue disclosure prevents confirmation of operating margin and net margin resilience through the cycle.

Growth Assessment

Top-line growth cannot be evaluated due to unreported revenue. Nevertheless, operating income growth of +430.1% YoY and ordinary income growth of +435.5% YoY indicate strong operational progress. Net income growth of +189.9% YoY is partly non-recurring given the sizable tax credit, so core growth should be proxied by operating/ordinary income. The cost base shows SG&A at 20.46, implying that scaling user volumes or transaction volumes could yield further operating leverage if SG&A growth decelerates versus gross profit. Low D&A (0.16) and minimal capex (-0.05) support a scalable, asset-light model with potential to translate incremental revenue into profit. OCF of 4.02 exceeding EBITDA (2.29) suggests favorable working capital dynamics or upfront cash receipts, which may or may not be sustainable. Outlook hinges on volume growth, take rates, and customer acquisition efficiency, which are not disclosed; normalization of tax effects will likely reduce net income growth rates in subsequent periods. Overall, while profit growth appears strong, its sustainability should be judged on pre-tax and operating trends until revenue and cohort metrics are disclosed.

Financial Health

Liquidity is very strong: current assets of 50.55 versus current liabilities of 5.84 yield a current and quick ratio of 865.1% and working capital of 44.71. Cash and deposits of 44.97 represent about 82.9% of total assets (44.97 / 54.26), providing a sizable buffer. Solvency is robust with total equity of 48.42 and total liabilities of 5.84; the equity ratio is approximately 89.2%, and debt-to-equity is 0.12x. Noncurrent liabilities are negligible at 0.00, and long-term loans are 0.01, indicating minimal structural leverage. Despite strong capitalization, retained earnings are negative at -51.47, reflecting cumulative losses historically; continued profitability is needed to rebuild equity quality. Accounts receivable and payable are both small (0.13 each), suggesting low counterparty credit risk exposure in working capital. Overall, the balance sheet is conservative, highly liquid, and well-positioned to absorb volatility.

Cash Flow Quality

OCF of 4.02 (100M JPY) versus net income of 3.95 yields an OCF/NI ratio of 1.02x, indicating earnings are backed by cash generation. FCF of 3.71 aligns with OCF plus investing cash flow (-0.31), reflecting limited investment needs in the period. Capex was minimal at -0.05, consistent with an asset-light model and supporting high cash conversion. EBITDA of 2.29 compared to OCF of 4.02 suggests positive working capital effects or deferred revenue inflows; the durability of this uplift is uncertain without detailed working capital disclosures. Investing cash outflow was modest (-0.31), with no material acquisition or securities investment reported. Financing cash inflow of 1.75 indicates some external funding; given the large cash balance, this appears opportunistic rather than necessary for liquidity, but details (e.g., equity issuance vs. debt) are not disclosed. With receivables and payables both small (0.13), working capital risk appears low, though platform activity seasonality could affect cash timing.

Dividend Sustainability

Dividend data and DPS are unreported, and payout ratios are not calculable. With retained earnings at -51.47 (100M JPY), the company likely prioritizes reinvestment and equity base repair over distributions. While FCF of 3.71 is positive and could theoretically support dividends, the absence of a track record and negative retained earnings reduce the likelihood of near-term payouts under typical Japanese corporate practice. Cash balances are ample, but sustainable dividend capacity should be assessed after normalizing for tax effects and confirming recurring profitability. Policy outlook is unclear due to missing disclosures; monitoring any stated capital allocation policy and AGM materials is advised.

Risk Assessment

Business Risks:

• Revenue visibility risk due to lack of disclosed top-line and gross profit metrics
• Scalability dependence on SG&A efficiency and customer acquisition cost control
• Potential regulatory and compliance risks typical for fintech/platform businesses (e.g., KYC/AML, investor protection)
• Platform security and cyber risk affecting customer trust and transaction volumes
• Concentration of business model on transaction volumes and take rates, which may be cyclical

Financial Risks:

• Earnings sensitivity to non-recurring tax benefits; normalization could reduce net income materially
• Negative retained earnings indicate limited capacity for shareholder distributions until sustained profits rebuild equity
• Cash concentration risk if deposits are held with a limited number of financial institutions
• Potential dilution risk if future financing relies on equity issuance (financing CF of +1.75 suggests use of external capital)
• Interest rate risk on cash balances and any floating-rate liabilities, albeit leverage is minimal

Key Concerns:

• Absence of revenue disclosure limits margin and growth analysis
• Large negative tax expense drives a significant portion of net profit
• Sustainability of OCF outperformance vs. EBITDA without detailed working capital disclosure

Investment Implications

Key Takeaways:

• Core profitability inflected sharply: operating income +430% YoY to 2.13 with minimal non-operating noise
• Net income of 3.95 was elevated by a sizable tax credit; pre-tax metrics are better indicators of run-rate earnings
• Balance sheet strength is notable: cash 44.97, equity ratio ~89%, debt-to-equity 0.12x
• Cash conversion is strong: OCF/NI 1.02x and FCF 3.71 with negligible capex
• Retained earnings remain negative (-51.47), indicating an early stage of equity base repair

Metrics to Watch:

• Revenue disclosure and trend to assess margins and asset turnover
• Operating margin (once revenue is available) and SG&A ratio trajectory to gauge operating leverage
• Tax rate normalization and deferred tax asset utilization patterns
• OCF vs. EBITDA bridge (working capital movements, deferred revenue, customer prepayments)
• Capital allocation policy (dividends/buybacks) once retained earnings turn positive
• Share count changes and financing mix following the +1.75 financing cash flow

Relative Positioning: Within Japan’s asset-light, fintech/platform peer set, FUNDINNO exhibits strong liquidity, low leverage, and improving operating profitability, but lags on disclosure granularity (notably revenue) and carries negative retained earnings, placing it in a rebuilding phase despite solid cash generation.

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