KeyHolder,Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥26.22B
• Operating Income: ¥1.15B
• Net Income: ¥648M
• EPS: ¥30.72

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

KeyHolder reported FY2025 Q3 (cumulative) consolidated results under IFRS with revenue of 262.17 billion yen-equivalent units (262.17 in 100M JPY), up 19.6% YoY, indicating solid top-line momentum. Gross profit was 36.94, translating to a gross margin of 14.1%, which is modest and suggests a cost-intensive business mix. EBITDA came in at 20.64 with an EBITDA margin of 7.9%, while operating income was 11.48 (+7.4% YoY), implying operating margin of about 4.4% and some compression in operating leverage compared with the revenue growth rate. Despite higher operating profit, profit before tax fell to 7.67 and net income declined to 5.78 (-33.7% YoY), pointing to headwinds below the operating line and a heavier effective tax rate of 36.2%. DuPont metrics show a net margin of 2.2%, asset turnover of 0.481x, and financial leverage of 2.43x, yielding a calculated ROE of 2.6%, which is subdued. Operating cash flow was strong at 18.15, 3.14x net income, indicating conservative accruals or a working capital tailwind; however, investing cash outflows of -41.16 led to negative free cash flow of -23.01 on a total-investing basis. Capex burden is light (-1.03), so FCF weakness mainly reflects financial investments or M&A-type outlays, not maintenance spending. The balance sheet remains balanced with total assets of 544.70, equity of 223.95, and an equity ratio of 41.0%, while total liabilities/equity is 1.44x, suggesting moderate solvency risk absent a detailed debt breakdown. Accounts receivable at 46.36 and inventories at 5.43 look manageable relative to the scale of revenue, though limited current liability disclosure constrains liquidity analysis. Equity-method investment income is sizable at 7.88 relative to PBT of 7.67, indicating a material contribution from affiliates and potential earnings volatility tied to associates. The gap between operating income (11.48) and PBT (7.67) implies net non-operating drag during the period, possibly interest or other items not disclosed, offset in part by equity-method gains depending on classification. EPS (basic and diluted) was 30.72 JPY with average shares of 18.82 million, and book value per share is calculated at about 1,190 JPY. The reported payout ratio (calculated) is 32.8% despite dividends being unreported; visibility on actual cash distributions is limited and FCF coverage is negative due to large investing outflows. Overall, the company shows healthy revenue growth and positive OCF, but margin pressure, associate income reliance, elevated tax burden, and negative FCF from investments weigh on bottom-line quality and returns. Data limitations (several N/A items, notably non-operating details, cash breakdown, current liabilities, and dividend cash) constrain precision and require cautious interpretation.

Profitability Analysis

ROE_decomposition: Net margin 2.2% x asset turnover 0.481x x financial leverage 2.43x = ROE 2.6% (calculated), aligned with reported 2.6%. The low net margin is the primary drag; leverage is moderate and asset turnover is middling for the business model. margin_quality: Gross margin is 14.1% (36.94/262.17), EBITDA margin 7.9% (20.64/262.17), and operating margin ~4.4% (11.48/262.17). The decline from EBITDA to operating margin reflects meaningful depreciation/amortization (9.16), consistent with asset intensity. Net margin of 2.2% is further compressed by non-operating items and a 36.2% effective tax rate. operating_leverage: Revenue grew 19.6% YoY while operating income rose 7.4% YoY, indicating negative operating leverage in the period as cost of sales and/or SG&A outpaced revenue gains. The gap between operating income (11.48) and PBT (7.67) further implies non-operating headwinds. Note: reported cost of sales and gross profit figures do not reconcile arithmetically; we rely on the stated gross profit and margins as authoritative under IFRS classification differences.

Growth Assessment

revenue_sustainability: Top-line growth of +19.6% YoY (262.17) suggests strong underlying demand or expanded scope (e.g., project wins, consolidation effects, or price/mix). Accounts receivable at 46.36 (~17.7% of YTD revenue) appears reasonable, but without period granularity, DSO cannot be robustly assessed. profit_quality: Operating income growth (+7.4% YoY) lagged revenue, signaling margin compression. Net income fell -33.7% YoY due to non-operating losses and/or higher taxes, lowering earnings quality. Equity-method income of 7.88 is large versus PBT (7.67), implying that affiliates significantly influence bottom line and could add volatility. outlook: Near-term growth will hinge on execution to stabilize gross margin and SG&A efficiency, managing non-operating expenses, and normalizing the tax rate. Sustainability of equity-method contributions is a key variable. If investing outflows translate into productive assets or accretive affiliates, medium-term revenue and EBITDA could benefit; however, integration and return realization risk remains.

Financial Health

liquidity: Current assets are 104.21; current liabilities are unreported, preventing calculation of current and quick ratios. Cash and deposits are unreported; cash and equivalents at period-end are 41.11, which provides some liquidity buffer, but absence of near-term liability data limits visibility. solvency: Total liabilities are 323.35 versus equity of 223.95; liabilities-to-equity is 1.44x and equity ratio is 41.0%, indicating a balanced capital structure for the growth profile. Interest-bearing debt is unreported; interest coverage cannot be calculated. capital_structure: Assets/equity leverage is 2.43x (544.70/223.95). Capital surplus is 142.01 and retained earnings 76.99, supporting equity base. Without debt detail, we interpret solvency using total liabilities; refinancing risk cannot be assessed from available data.

Cash Flow Quality

earnings_quality: OCF of 18.15 is 3.14x net income (5.78), indicating strong cash conversion and suggesting conservative accruals or working capital inflows. Effective tax rate at 36.2% weighs on net income relative to cash generation. FCF_analysis: Free cash flow on an OCF + investing basis is -23.01 (18.15 + -41.16), driven by sizable investing outflows. Capex is modest at -1.03, implying investments likely reflect financial assets, acquisitions, or affiliate funding rather than maintenance capex. working_capital: Accounts receivable of 46.36 and inventories of 5.43 look proportionate to revenue scale, but with current liabilities unreported, net working capital dynamics cannot be fully assessed. The strong OCF hints at either collection efficiency or payables support.

Dividend Sustainability

payout_ratio_assessment: A calculated payout ratio of 32.8% is provided despite dividends being unreported. If accurate, the payout is moderate relative to net income (EPS 30.72 JPY). Limited disclosure prevents verification. FCF_coverage: FCF coverage is -12.13x, reflecting negative free cash flow due to large investing cash outflows; on an OCF basis, coverage would likely be adequate, but the company’s investment program constrains distributable cash in the period. policy_outlook: Absent reported DPS and dividend policy details, visibility is low. Sustainability hinges on the pace of investing outflows and continued positive OCF. If investments are discretionary or one-off, payout stability could be maintained; if persistent, the board may prioritize reinvestment over higher distributions.

Risk Assessment

Business Risks:

• Margin pressure amid rising cost of sales and SG&A despite strong revenue growth
• Dependence on equity-method income, introducing volatility from affiliates
• Execution risk in monetizing recent investments (investing CF -41.16) and realizing returns
• Potential tax rate volatility (effective rate 36.2%) impacting net margin
• Client/project concentration risk not assessable but typical for content/event-driven models

Financial Risks:

• Limited transparency on debt structure and interest costs (interest expense unreported)
• Liquidity assessment constrained by unreported current liabilities and cash detail
• Negative free cash flow due to large investing outflows, elevating funding needs
• Potential non-operating losses evidenced by PBT below operating income

Key Concerns:

• ROE of 2.6% is low given leverage of 2.43x, implying value creation is constrained by net margin
• Non-operating items and high tax burden erode profitability below the operating line
• Data gaps (non-operating income/expense, debt breakdown, DPS) limit analytic precision

Investment Implications

Key Takeaways:

• Strong top-line growth (+19.6% YoY) but weaker operating leverage (+7.4% YoY OI)
• Low gross margin (14.1%) and modest operating margin (~4.4%) cap profitability
• Net income decline (-33.7% YoY) driven by non-operating/tax headwinds
• ROE at 2.6% is primarily constrained by thin net margins
• OCF is solid (3.14x NI), but FCF negative due to large investing cash outflows
• Equity ratio at 41.0% indicates a balanced balance sheet, albeit with limited debt visibility
• Material equity-method contribution (7.88) raises earnings volatility considerations

Metrics to Watch:

• Operating margin and gross margin trajectory
• Non-operating items: interest expense and other income/expense once disclosed
• Effective tax rate normalization
• OCF vs. NI conversion and working capital trends
• Scale and nature of investing CF (M&A and affiliate investments)
• Equity-method income volatility and underlying associate performance
• Any disclosure on DPS and capital allocation policy

Relative Positioning: Within TSE-listed entertainment/creative-content and services peers, KeyHolder shows above-peer revenue growth momentum but below-average ROE and net margins, supported by a moderate equity ratio yet tempered by heavier reliance on associate income and negative FCF from sizable investments.

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