Cybozu,Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥27.41B
• Operating Income: ¥8.01B
• Net Income: ¥2.60B
• EPS: ¥117.85

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

Verdict: Strong quarter with outsized profit growth and elevated ROE, albeit with notable internal data inconsistencies that warrant caution in interpreting margins. Revenue rose 27.7% YoY to 274.13, while operating income surged 131.6% YoY to 80.08. Gross profit reached 193.27, translating to a gross margin of 70.5%, indicative of healthy unit economics for a SaaS-oriented model. Using the reported operating income, operating margin is approximately 29.2% (80.08/274.13), implying sharp operating leverage. Ordinary income was 79.21 (+118.9% YoY), and net income was 54.48 (+109.9% YoY), yielding a net margin of 19.9%. ROE was a robust 33.5%, driven by healthy margins (19.9%), asset turnover of 1.016x, and moderate leverage of 1.66x. Liquidity is strong with a current ratio of 156.4% and cash/deposits of 92.81 against current liabilities of 105.11. Balance sheet leverage is conservative (total liabilities/equity of 0.66x) and interest-bearing debt is de minimis (long-term loans 0.27). However, internal line-item inconsistencies are material: gross profit (193.27) less SG&A (158.69) implies operating income of 34.58, which conflicts with the reported operating income of 80.08; similarly, profit before tax (36.16) is below net income (54.48), which is not economically consistent. These discrepancies limit precision in margin and tax rate interpretation. On a directional basis, margin expansion appears significant; using reported OI implies operating margin expansion of roughly 1,310 bps YoY (vs an implied prior margin of ~16.1%). Earnings quality cannot be assessed due to unreported cash flow data (OCF, capex, FCF all N/A). The effective tax rate shown (28.2%) is not reconcilable with the reported PBT/NI figures, suggesting data quality or mapping issues. Forward-looking, strong ROE and liquidity support continued growth investment and dividend capacity, but investors should verify margin integrity, tax normalization, and cash conversion as disclosures become available. Net cash, modest leverage, and recurring revenue characteristics position the company defensively within domestic SaaS peers. Key watch items include receivables dynamics (AR 48.30), deferred revenue (not disclosed), and the sustainability of operating leverage as headcount and go-to-market spend scale. Overall, fundamentals trend positive, but confirmatory cash flow and clean line-item reconciliation are needed to solidify the quality of earnings conclusion.

Profitability Analysis

DuPont (ROE = Net Profit Margin × Asset Turnover × Financial Leverage): 33.5% = 19.9% × 1.016 × 1.66x. The dominant driver of the strong ROE is the net profit margin at 19.9%, with asset turnover about neutral at ~1.0x and leverage modest at 1.66x. The component that changed the most YoY is most likely the margin, given operating income growth (+131.6% YoY) far outpacing revenue (+27.7% YoY), implying substantial operating leverage. Business reasons for the margin expansion likely include scale benefits in sales/marketing and R&D, improved pricing/mix, and fixed-cost dilution, typical for a maturing SaaS platform with growing subscription base. Sustainability: partial—structural scale effects are durable, but the pace of margin expansion should moderate as the company reinvests in growth and as compensation and go-to-market costs normalize. Caution: internal inconsistencies (SG&A vs operating income; PBT vs NI) cloud precise margin attribution; the direction (improvement) is clear, but the magnitude is uncertain. Cost discipline appears improved on the reported view; however, if SG&A is indeed 158.69 as disclosed, the implied operating income would be 34.58 (far lower than 80.08), which would indicate more muted operating leverage. There is no evidence here of SG&A growth exceeding revenue growth (SG&A YoY detail unreported), but investors should verify SG&A run-rate and hiring pace. Overall, profitability is strong relative to domestic SaaS peers, but confirm reconciliation before extrapolating current margins.

Growth Assessment

Revenue growth of 27.7% YoY to 274.13 reflects healthy demand and likely ongoing expansion of subscription and upsell activity. Profit growth outpaced sales materially (operating income +131.6% YoY; net income +109.9% YoY), indicative of operating leverage. The reported operating margin of ~29.2% suggests the company is scaling beyond the heavy investment phase; however, given the SG&A/operating income inconsistency, the true margin could be lower, and the growth in profitability should be treated cautiously until clarified. Non-operating impact is small (non-operating income 2.13; non-operating expenses 0.53), so earnings are predominantly driven by the core business. Effective tax rate prints at 28.2%, but reconciliation is not possible due to conflicting PBT/NI data. Outlook: with robust cash reserves (92.81) and minimal debt, the company has capacity to invest in product and distribution without jeopardizing solvency. Sustainability hinges on churn management, continued new logo wins, and upselling; competitive intensity in Japan SaaS remains high. Near-term, growth should remain above market given the 27–30% trajectory, but the pace of margin expansion is likely to moderate as hiring resumes and marketing scales. Verify deferred revenue trends and billings growth once disclosed to confirm forward revenue visibility.

Financial Health

Liquidity is solid: current ratio 156.4% and quick ratio 156.4%, with current assets (164.41) comfortably exceeding current liabilities (105.11). Cash and deposits (92.81) plus accounts receivable (48.30) cover a substantial portion of short-term obligations, lowering maturity mismatch risk. Solvency is conservative: total liabilities/equity is 0.66x and long-term loans are only 0.27; no significant interest-bearing debt is reported elsewhere. There are no warnings for Current Ratio (<1.0) or D/E (>2.0). Equity stands at 162.56, supporting resilience. Off-balance-sheet obligations are not disclosed; absent lease and commitment details, some fixed obligations may be understated. Overall balance sheet quality is high, supported by net cash and modest leverage.

Cash Flow Quality

Operating cash flow, investing cash flow, and free cash flow are not reported, preventing an OCF/Net Income assessment and FCF coverage analysis. As such, we cannot confirm cash conversion quality or working capital effects. Accounts receivable are 48.30, but without prior-period comparisons or DSO, we cannot detect collection strain or revenue timing effects. No signs of working capital manipulation can be inferred from available data, but limitations are material. Given the net cash position and low capex intensity typical of software companies, cash generation is likely adequate, yet this remains unverified until OCF/FCF are disclosed.

Dividend Sustainability

The calculated payout ratio is 29.1%, which is comfortably below the 60% benchmark for sustainability; however, DPS and total dividends are unreported, so this ratio should be treated as indicative rather than definitive. With significant cash (92.81) and minimal debt, balance sheet capacity supports ongoing dividends. FCF coverage is not calculable due to missing OCF/capex, so we cannot confirm coverage from internally generated cash. Policy outlook likely prioritizes growth investment while maintaining a modest, sustainable dividend, subject to confirmation from official guidance.

Risk Assessment

Business Risks:

• Execution risk in scaling SaaS go-to-market while maintaining low churn and high net retention
• Competitive intensity in collaborative software/Groupware in Japan, pressuring pricing and CAC
• Product innovation cadence risk (feature parity vs global peers)
• Potential deceleration in new bookings if macro weakens

Financial Risks:

• Data inconsistencies in financial lines (SG&A vs operating income; PBT vs NI) create uncertainty in margin and tax normalization
• Unreported cash flow statements impede assessment of cash conversion and FCF sustainability
• Receivables concentration risk not assessable due to limited disclosure
• Potential tax volatility given the unclear reconciliation between PBT and NI

Key Concerns:

• Material line-item inconsistencies may impact the reliablity of margin and ROIC calculations
• Absence of OCF/FCF data prevents earnings quality validation
• Lack of segment detail (subscription vs services) limits visibility into profit drivers

Investment Implications

Key Takeaways:

• Top-line growth remains strong at 27.7% YoY with outsized profit growth (OI +131.6% YoY)
• ROE of 33.5% underpinned by high net margin and moderate leverage
• Balance sheet is robust with net cash and low liabilities (D/E 0.66x)
• Significant data inconsistencies warrant caution in interpreting margins and tax rate
• Non-operating items are small; performance is primarily operational

Metrics to Watch:

• Reconciliation of SG&A, operating income, and profit before tax in the next filing
• Operating cash flow, free cash flow, and OCF/NI ratio (target >1.0)
• Billings and deferred revenue growth to validate forward visibility
• AR days/collection trends and churn/net revenue retention
• Hiring pace and SG&A run-rate relative to revenue growth

Relative Positioning: Within Japan SaaS peers, the company shows superior reported profitability and ROE, supported by a net-cash balance sheet; however, confidence in margin leadership depends on resolving current statement inconsistencies and confirming cash conversion.

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