SecondXight Analytica,Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥978M
• Operating Income: ¥111M
• Net Income: ¥75M
• EPS: ¥8.00

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

Second Sight Analytica Co., Ltd. (single-entity, JGAAP) delivered a strong FY2025 Q3 performance with top-line growth translating into outsized profit expansion. Revenue reached ¥978.0m (+29.3% YoY), and operating income surged to ¥111.0m (+162.9% YoY), indicating meaningful operating leverage. Net income was ¥75.0m (+173.0% YoY), with EPS of ¥8.00, reflecting robust bottom-line momentum. Gross profit of ¥332.0m implies a gross margin of 33.9%, suggesting disciplined cost of sales and an improving mix or pricing. Operating margin rose to 11.3% (¥111.0m/¥978.0m), while net margin was 7.67%, supported by minimal non-operating drag and modest taxes. Ordinary income equaled operating income (¥111.0m), evidencing limited non-operating volatility; interest expense was only ¥0.227m, yielding an interest coverage ratio of about 489x. Balance sheet quality appears strong: total assets were ¥1,103.0m against total liabilities of ¥250.3m and equity of ¥919.0m, implying an equity ratio around 83.3% and debt-to-equity of 0.27x. Liquidity is ample with current assets of ¥840.8m versus current liabilities of ¥237.3m, translating into a current ratio of 354% and working capital of ¥603.5m. The DuPont decomposition yields ROE of 8.16%, driven by a 7.67% net margin, 0.887x asset turnover, and 1.20x financial leverage—an efficiency-led, low-leverage return profile. Tax expense of ¥14.24m on ordinary income of ¥111.0m implies an effective tax rate near 12.8% (not the 0.0% placeholder). Cash flow line items, depreciation/amortization, and share count were not disclosed (zeros indicate unreported), limiting cash conversion and per-share balance-sheet analysis. Nevertheless, strong earnings growth, lean financing costs, and a conservative balance sheet point to improving fundamentals and resilience. The absence of inventories aligns with a software/analytics or services-heavy model and should support a relatively light working-capital structure, though receivables management remains a watchpoint. Dividend data appear unreported; hence, payout and FCF coverage metrics showing zero should be treated as placeholders. Overall, the company demonstrates healthy growth scalability and margin expansion with prudent financial risk, though the lack of cash flow disclosure tempers confidence in earnings quality assessment.

Profitability Analysis

roe_decomposition:

• net_profit_margin: 7.67%
• asset_turnover: 0.887x
• financial_leverage: 1.20x
• calculated_roe: 8.16%
• notes: ROE is primarily driven by margins and asset efficiency rather than leverage, consistent with a high equity ratio (~83.3%). margin_quality:
• gross_margin: 33.9%
• operating_margin: 11.3%
• net_margin: 7.67%
• commentary: Expansion from revenue to operating income (+162.9% YoY on +29.3% revenue) indicates lower incremental opex and/or scale benefits. Ordinary income equals operating income, showing minimal non-operating noise. operating_leverage:
• evidence: Operating income +162.9% YoY vs revenue +29.3% YoY
• interpretation: High operating leverage; fixed cost base and pricing/mix improvements likely amplified incremental margins.
• sustainability_considerations: Durability depends on maintaining utilization, pricing, and disciplined hiring; as scale grows, leverage should normalize.

Growth Assessment

revenue_sustainability: Revenue growth of +29.3% YoY suggests healthy demand for analytics/services offerings. Lack of segment/customer disclosures limits visibility into concentration and pipeline breadth. Absence of inventories is consistent with a services/software model, which can support recurring revenue if contracts are multi-period. profit_quality: Ordinary income matched operating income, indicating limited reliance on non-operating gains. Interest expense was immaterial (¥0.227m), and the implied effective tax rate is ~12.8%, supporting clean earnings. However, lack of depreciation and cash flow disclosure constrains assessment of non-cash items and cash conversion. outlook: Given strong operating leverage and a robust balance sheet, near-term earnings momentum appears favorable if revenue growth persists. Key uncertainties include project timing, customer concentration, and hiring costs in a tight tech labor market.

Financial Health

liquidity:

• current_assets: ¥840,757,000
• current_liabilities: ¥237,274,000
• current_ratio: 354.3%
• quick_ratio: 354.3% (no inventories reported)
• working_capital: ¥603,483,000
• assessment: Very strong short-term liquidity and cash buffer implied by large current assets relative to current liabilities. solvency:
• total_assets: ¥1,103,000,000
• total_liabilities: ¥250,274,000
• total_equity: ¥919,000,000
• equity_ratio_implied: ≈83.3% (Total Equity / Total Assets)
• debt_to_equity: 0.27x
• interest_coverage: ≈489x (Operating income / Interest expense)
• assessment: Low leverage and ample coverage indicate limited solvency risk. capital_structure: Primarily equity-funded with modest liabilities; scope to fund growth internally without near-term refinancing risk.

Cash Flow Quality

earnings_quality: Cash flow statements were not disclosed (zeros are placeholders), so we cannot reconcile net income to operating cash flow. Earnings appear operationally driven given minimal non-operating items, but cash conversion remains unverified. fcf_analysis: FCF cannot be calculated without OCF and capex data. With no depreciation disclosed, we cannot infer capex intensity or maintenance needs. working_capital: No inventories reported; current assets are high vs current liabilities, suggesting potential receivables buildup or cash reserves. Monitoring DSO and unbilled receivables would be important once disclosed.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio appear as zero due to non-disclosure. With net income of ¥75.0m and strong balance sheet, capacity for distributions may exist, but policy is unknown. fcf_coverage: Not assessable due to missing OCF and capex data. policy_outlook: Given the company’s growth phase and operating leverage, reinvestment priority is plausible; explicit dividend policy disclosure is needed for clarity.

Risk Assessment

Business Risks:

• Customer concentration and contract timing risk typical for analytics/services businesses
• Project execution and utilization risk impacting margin leverage
• Talent acquisition and retention amid rising tech wage costs
• Competitive intensity in AI/analytics from domestic and global players
• Data security and compliance risks affecting reputation and client relationships
• Technology obsolescence risk requiring sustained R&D and platform investment

Financial Risks:

• Unverified cash generation due to undisclosed cash flow statements
• Potential receivables concentration and collection risk
• Sensitivity of margins to hiring ramp or subcontracting costs
• Limited visibility on capital expenditure needs without depreciation/capex data

Key Concerns:

• Lack of operating, investing, and financing cash flow disclosure
• No disclosure of depreciation/amortization and capex trends
• Dividend policy and share count not disclosed, limiting per-share and payout analysis

Investment Implications

Key Takeaways:

• Strong revenue growth (+29.3% YoY) translating into disproportionate operating income growth (+162.9% YoY)
• Healthy margins: gross 33.9%, operating 11.3%, net 7.67%
• Low leverage with implied equity ratio ~83% and debt-to-equity 0.27x
• High interest coverage (~489x) underscores minimal financing risk
• ROE of 8.16% driven by profitability and asset efficiency rather than leverage
• Cash flow and depreciation data absent, constraining validation of earnings quality

Metrics to Watch:

• Operating cash flow and free cash flow conversion relative to net income
• DSO and receivables concentration (once disclosed)
• Gross and operating margin progression as scale grows
• Headcount and opex growth versus revenue to gauge operating leverage sustainability
• Pipeline visibility, backlog, and recurring revenue mix
• Any updates on dividend policy and share count

Relative Positioning: Within the Japan-listed analytics/AI and IT services cohort, the company shows above-peer revenue growth and rapidly improving operating margins, underpinned by a conservative balance sheet; however, disclosure depth (especially cash flows) is below best-in-class peers, tempering comparability on 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