tripla Co.,Ltd. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥2.57B
• Operating Income: ¥519M
• Net Income: ¥505M
• EPS: ¥85.34

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

Verdict: FY2025 Q4 was a strong profitability and cash-generation quarter with robust earnings growth, high margins, and exceptionally large operating cash inflows, albeit on a highly leveraged balance sheet with a thin liquidity cushion. Revenue reached 25.73, while operating income was 5.19 (+93.6% YoY), ordinary income 5.83 (+138.8% YoY), and net income 5.01 (+139.7% YoY). Operating margin is approximately 20.2% (5.19 / 25.73), EBITDA margin 20.6%, and net margin 19.5%, indicating efficient cost control despite limited disclosure on COGS and SG&A. Non-operating income totaled 0.77, including 0.31 of interest income, easily covering 0.13 of non-operating expenses (primarily interest), yielding an interest coverage of 40.3x. The effective tax rate was low at 5.2%, supporting bottom-line growth. Cash generation was outstanding: operating cash flow was 84.93, and free cash flow was 85.49, far exceeding net income (OCF/NI = 16.95x). The balance sheet shows large cash and deposits of 180.06 against current liabilities of 171.94, resulting in a current ratio of 109.4%—above 1.0 but not comfortably so. Equity is 16.89 against total assets of 197.29, implying a low equity ratio (~8.6%) and a high debt-to-equity ratio of 10.68x, driven mostly by non-interest-bearing liabilities rather than loans (long-term loans only 7.90). Asset turnover is low at 0.130, but a high net margin (19.5%) and very high financial leverage (11.68x) produce a strong ROE of 29.7%. Reported operating margin (0.2%) appears inconsistent with operating income and revenue; based on the provided figures, the operating margin is about 20.2%. Earnings quality screens as strong on cash conversion, but the magnitude suggests one-off working capital effects (e.g., prepayments or deferred revenue movements). With cash substantially covering short-term obligations, immediate liquidity is adequate, yet the thin buffer means timing of outflows matters. Forward-looking, the company enters the next period with strong profitability, ample cash, and capacity to invest or de-lever, but must manage high leverage, possible normalization of cash flow, and a low equity cushion. Limited disclosure on cost structure and working capital components constrains deeper margin and cash-flow diagnostics. Margin expansion or compression in basis points versus last year cannot be quantified due to missing comparable revenue and gross margin data. Overall, performance is solid and cash-rich, but balance-sheet leverage and potential OCF normalization are key watchpoints.

Profitability Analysis

DuPont decomposition (FY2025): ROE = Net Profit Margin × Asset Turnover × Financial Leverage = 19.5% × 0.130 × 11.68x ≈ 29.7%. The largest driver is financial leverage (11.68x), with a supportive net margin (19.5%) and subdued asset turnover (0.130). The jump in ordinary income (+138.8% YoY) and net income (+139.7% YoY) versus operating income (+93.6% YoY) indicates incremental benefit from non-operating income (notably interest income of 0.31) and a low effective tax rate (5.2%). The business explanation is: strong operating profitability (c. 20% operating margin) on a relatively small revenue base, supplemented by interest income on large cash balances, while leverage amplifies ROE. Sustainability: margin quality appears solid given operating margin ~20%; however, the exceptionally low tax rate and non-operating boosts may not repeat, and leverage-driven ROE is inherently more fragile. Asset turnover remains low, suggesting growth will rely on scaling revenue faster than asset growth. No SG&A or COGS breakdowns were provided, limiting cost-structure analysis; however, the combination of EBITDA margin (20.6%) and strong OI growth implies positive operating leverage. Flags: inability to compare YoY margin bps changes due to missing prior-period revenue; reliance on leverage for ROE; and potential normalization of non-operating tailwinds.

Growth Assessment

Top-line printed at 25.73 with no disclosed YoY revenue growth rate; operating income grew +93.6% YoY and net income +139.7% YoY, implying significant operating leverage and cost discipline. The current operating margin (~20.2%) and EBITDA margin (20.6%) suggest a scalable model, but asset turnover (0.130) indicates room to improve efficiency. Non-operating income (0.77), notably interest income (0.31), contributed to outsized ordinary income growth; this may moderate if cash balances decline or rates fall. The low effective tax rate (5.2%) further boosted net profits and may normalize. With OCF far exceeding NI, near-term reinvestment capacity is strong; however, given missing detail on revenue composition and contract terms, the sustainability of growth will hinge on retaining and expanding recurring revenues and managing churn. Outlook: positive for margin sustainability near term, with upside from scale, but growth optics could soften if non-operating gains and tax effects revert and if working-capital-related OCF normalizes.

Financial Health

Liquidity: Current assets 188.04 vs current liabilities 171.94 yield a current ratio of 109.4% and quick ratio of 109.4%. While above 1.0, the buffer is thin; close monitoring of outflow timing is needed. Solvency: Total liabilities 180.40 vs equity 16.89 imply D/E of 10.68x, far above conservative benchmarks; explicit warning: leverage is high. However, interest-bearing debt is modest (long-term loans 7.90), so much of the leverage likely reflects non-interest-bearing items (e.g., contract liabilities or payables). Equity ratio is about 8.6%, indicating a low capital buffer. Maturity mismatch: Current liabilities (171.94) are largely covered by cash and deposits (180.06), reducing short-term refinancing risk, but any sudden cash uses could pressure liquidity. No off-balance-sheet obligations were reported in the data provided. Overall: adequate short-term liquidity due to cash on hand, counterbalanced by very high leverage and low equity cushion.

Cash Flow Quality

OCF/NI is 16.95x, flagging extremely strong cash conversion; while positive, the magnitude suggests one-off or timing-related working capital effects (e.g., prepayments or deferred revenue build). Free cash flow was 85.49, supported by minimal capex (-0.09) and a small net inflow from investing activities (0.56). With financing CF of -2.07, net cash still increased materially, consistent with the large OCF. No signs of aggressive working capital manipulation can be concluded from the limited data; however, the divergence between OCF and NI warrants caution about normalization in subsequent periods. FCF appears more than sufficient to fund capex and any modest dividend, with ample headroom for selective de-leveraging if desired.

Dividend Sustainability

Dividend data are unreported; payout ratios and FCF coverage cannot be calculated. From a capacity perspective, current period FCF (85.49) and cash on hand (180.06) would comfortably support a modest dividend alongside capex (-0.09), assuming these cash flows are sustainable. Given high leverage (mostly non-interest-bearing) and a low equity ratio, management may prioritize balance-sheet strengthening and growth investments over distributions. Policy outlook cannot be inferred without guidance; monitor announcements and capital allocation commentary.

Risk Assessment

Business Risks:

• Demand cyclicality in hospitality/travel technology end-markets, which can affect bookings and SaaS upsell.
• Customer concentration or churn risk if key hotel chains or partners contribute a large share of revenue (not disclosed).
• Product and platform competitiveness versus domestic and global travel-tech/AI providers.
• Cybersecurity and data privacy risks given likely handling of guest and payment data.
• Potential normalization of the unusually low effective tax rate.

Financial Risks:

• High leverage: D/E 10.68x with an equity ratio of ~8.6%, leaving a thin capital buffer.
• Liquidity tightness: current ratio 1.09x—adequate but not robust; sensitive to timing of cash outflows.
• Earnings reliance on non-operating income (interest income 0.31) and low taxes, which may not persist.
• OCF significantly above NI (16.95x), implying potential reversal risk if working capital inflows normalize.
• Concentration of assets in cash (180.06) creates reinvestment rate risk and exposure to interest income variability.

Key Concerns:

• Balance sheet resilience given low equity and high liabilities, even if mostly non-interest-bearing.
• Sustainability of operating margin around 20% without detailed cost disclosures.
• Potential bps compression in margins if revenue growth slows or costs scale ahead of sales.
• Limited disclosure on working capital components (receivables, payables, contract liabilities) obscures cash-flow durability.

Investment Implications

Key Takeaways:

• Strong profitability: operating margin ~20.2%, net margin 19.5%, ROE 29.7%.
• Cash-generative quarter: OCF 84.93 and FCF 85.49, far exceeding NI.
• Balance sheet characterized by high leverage (D/E 10.68x) but low interest-bearing debt (loans 7.90).
• Adequate but thin liquidity buffer: current ratio 1.09x with cash 180.06 covering most current liabilities.
• Non-operating tailwinds (interest income, low tax rate) boosted earnings and may normalize.

Metrics to Watch:

• Composition of current liabilities (deferred revenue, payables) and their turnover.
• Recurring revenue metrics and churn/retention trends.
• Operating margin trajectory and any YoY bps changes as disclosures improve.
• OCF to NI ratio normalization and working capital movements (AR, AP, contract liabilities).
• Equity ratio and any de-leveraging or capital raise plans.
• Interest income sensitivity to cash balance and rate changes.

Relative Positioning: Within Japanese small-cap software/travel-tech peers, tripla shows superior margins and cash generation this quarter but carries a notably lower equity ratio and higher reported leverage, implying higher financial sensitivity despite limited interest-bearing debt.

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