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

Cybozu, Inc. reported strong FY2025 Q3 year-to-date results with revenue of ¥27.413 billion, up 27.7% year on year, indicating robust topline momentum. Gross profit was ¥19.327 billion, reflecting an elevated gross margin of 70.5%, consistent with a high-margin software model. Operating income surged to ¥8.008 billion, up 131.6% YoY, demonstrating substantial operating leverage as revenue growth translated into outsized profit expansion. Ordinary income was ¥7.921 billion, slightly below operating income, implying negligible net non-operating losses or conservative financial income. Net income reached ¥5.448 billion, up 109.9% YoY, yielding a net margin of 19.9%, which underscores improved cost discipline and scale benefits. DuPont analysis shows a net margin of 19.87%, asset turnover of 1.016x, and financial leverage of 1.66x, driving a calculated ROE of 33.51%, a very strong level for a software-oriented company. On the balance sheet, total assets stand at ¥26.977 billion and equity at ¥16.256 billion; this implies an equity ratio around 60% (calculated as equity/assets), despite the reported equity ratio field showing 0.0% likely due to disclosure format. Current assets of ¥11.933 billion against current liabilities of ¥9.287 billion produce working capital of ¥2.646 billion and a current ratio of 128.5%, indicating adequate short-term liquidity. Total liabilities of ¥9.454 billion versus equity of ¥16.256 billion imply a liabilities-to-equity ratio near 0.58x, suggesting a conservative capital structure with modest leverage. The effective tax rate shown as 0.0% is not meaningful due to data limitations; using reported income tax expense of ¥1.02 billion versus ordinary income suggests an approximate tax rate near 13%. Cash flow statement items are unreported (shown as zero), preventing assessment of operating cash conversion and free cash flow generation this period. The absence of reported depreciation and interest expense likewise limits commentary on non-cash expense mix and interest coverage, though fundamentally the business appears lightly asset-intensive. No dividend was reported (DPS ¥0, payout ratio 0%), consistent with reinvestment in growth. Overall, profitability inflected strongly with revenue growth, gross margin strength, and improved operating efficiency, resulting in elevated ROE. Liquidity and solvency appear sound on the face of the balance sheet. The key uncertainties relate to the unreported cash flow data and the sustainability of recent operating leverage as growth normalizes. Given the high margins and asset-light profile, earnings quality would typically be supported by recurring revenue dynamics, but direct validation via cash flow is not available from this dataset. The outlook hinges on maintaining double-digit revenue growth while keeping sales and marketing efficiency high and R&D investment disciplined.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 19.87%
• asset_turnover: 1.016x
• financial_leverage: 1.66x
• calculated_ROE: 33.51%
• interpretation: ROE is driven primarily by high net margins and healthy asset turnover for an asset-light model; leverage is moderate and not the main driver. margin_quality:
• gross_margin: 70.5% (¥19.327bn GP on ¥27.413bn revenue)
• operating_margin: 29.2% (¥8.008bn OI on ¥27.413bn revenue)
• net_margin: 19.9% (¥5.448bn NI on ¥27.413bn revenue)
• commentary: Margin expansion is evident with operating income growth (+131.6% YoY) far outpacing revenue growth (+27.7% YoY), indicating strong operating leverage and improved cost efficiency. operating_leverage: Very strong in the period: +27.7% revenue growth vs +131.6% operating income growth suggests significant scale benefits and controlled opex growth.

Growth Assessment

revenue_sustainability: Revenue growth of +27.7% YoY indicates strong demand; sustainability will depend on retention, upsell, and continued new logo acquisition typical of subscription-based models. profit_quality: Net income grew +109.9% YoY with enhanced margins; however, cash conversion cannot be confirmed due to unreported cash flows. outlook: With high gross margins and moderate leverage, the company is positioned to continue compounding earnings if growth persists; operating leverage may normalize as investments in sales, marketing, and development re-accelerate.

Financial Health

liquidity:

• current_assets: ¥11.933bn
• current_liabilities: ¥9.287bn
• current_ratio: 128.5%
• quick_ratio: 128.4%
• working_capital: ¥2.646bn
• assessment: Short-term liquidity appears adequate with positive working capital; inventory is negligible (¥0.005bn), consistent with a software model. solvency:
• total_assets: ¥26.977bn
• total_liabilities: ¥9.454bn
• total_equity: ¥16.256bn
• equity_ratio_implied: ≈60.3% (equity/assets), despite the reported 0.0% field
• debt_to_equity_proxy: 0.58x (liabilities/equity)
• assessment: Balance sheet is conservatively capitalized with substantial equity and modest liabilities; low financial risk is implied. capital_structure: Moderate leverage with liabilities at ~0.58x equity; no interest expense reported (likely unreported), suggesting limited reliance on debt financing.

Cash Flow Quality

earnings_quality: Cannot be fully assessed this quarter due to unreported operating cash flow and depreciation; earnings appear supported by high gross margins and scaling opex, but cash conversion is unverified. FCF_analysis: Free cash flow is unreported; no conclusion can be drawn on FCF coverage of earnings or investments. working_capital: Working capital is positive at ¥2.646bn; detailed dynamics (receivables, payables, deferred revenue) are not disclosed, limiting assessment of billings and cash collection.

Dividend Sustainability

payout_ratio_assessment: Payout ratio is reported at 0.0% with DPS ¥0, consistent with reinvestment in growth; coverage metrics cannot be evaluated without cash flow data. FCF_coverage: Not assessable due to unreported free cash flow; on face value, the company is retaining earnings. policy_outlook: Given strong growth and high ROE (33.5%), continued retention for reinvestment is plausible; any future policy shift would depend on sustained cash generation and capital needs.

Risk Assessment

Business Risks:

• Growth deceleration risk if customer acquisition costs rise or retention weakens.
• Competitive pressure from global and domestic productivity and application platform providers.
• Execution risk in scaling sales and partner channels while maintaining unit economics.
• Potential increase in cloud infrastructure and third-party service costs impacting gross margin.
• Product concentration risk if revenue is driven by a limited set of flagship services.
• Regulatory and data privacy/security requirements that could increase compliance costs.

Financial Risks:

• Limited visibility on cash generation due to unreported OCF and FCF.
• Potential working capital volatility (e.g., deferred revenue seasonality) typical in subscription models.
• Exposure to share-based compensation or non-cash items not disclosed here, affecting earnings-to-cash conversion.
• Tax rate variability (estimated ~13% based on available data) impacting net income.

Key Concerns:

• Absence of cash flow disclosure prevents validation of earnings quality.
• Sustainability of outsized operating leverage as growth normalizes.
• Dependence on maintaining high gross margins amid competitive pricing dynamics.

Investment Implications

Key Takeaways:

• Revenue up 27.7% YoY to ¥27.413bn with strong operating leverage (OI up 131.6% YoY).
• High margins: gross 70.5%, operating ~29.2%, net ~19.9%.
• ROE is robust at 33.5% driven by margin strength and healthy asset turnover.
• Balance sheet appears strong with implied equity ratio ~60% and liabilities/equity ~0.58x.
• Cash flow metrics are unreported; earnings-to-cash conversion cannot be assessed.
• No dividend (DPS ¥0); profits retained to support growth.

Metrics to Watch:

• Operating cash flow and free cash flow conversion versus net income.
• Deferred revenue and billings growth as indicators of demand and cash collection.
• Sales efficiency (e.g., CAC payback) and opex growth relative to revenue.
• Retention/expansion metrics (NRR/churn) to gauge sustainability of growth.
• Gross margin stability amid infrastructure and vendor cost changes.
• Tax rate normalization versus the ~13% implied in this period.

Relative Positioning: Within the Japanese software sector, the company exhibits above-average growth and margin profile with a solid equity base, though disclosure gaps on cash flow currently limit full comparability on earnings quality.

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