JENOBA CO.,LTD. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥1.37B
• Operating Income: ¥773M
• Net Income: ¥542M
• EPS: ¥40.83

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: A strong FY2025 Q4 finish with double-digit profit growth, margin expansion, and solid cash conversion, underpinned by a very cash-rich balance sheet. Revenue rose 8.0% YoY to 13.66, while operating income increased 11.4% YoY to 7.73, demonstrating positive operating leverage. Net income rose 12.5% YoY to 5.42, translating into a high net profit margin of 39.7%. Operating margin stood at 56.6% this period; based on reported growth rates, we estimate operating margin expanded by roughly 170 bps YoY. Net margin likely expanded by about 150 bps YoY (approximate, derived from revenue and net income growth). Gross margin remains exceptionally high at 75.7%, consistent with a high-value, asset-light service model. Ordinary income reached 7.82 (+12.4% YoY), and the effective tax rate was 30.8%, well within a normalized range. Cash flow quality was solid: OCF of 5.88 covered net income by 1.08x, indicating earnings were backed by cash. Free cash flow was positive at 3.17 even after modest capex (-0.07), leaving ample capacity for shareholder returns. The company executed sizable buybacks (-7.40 financing CF), funded from abundant cash (cash and deposits 35.71 vs total assets 37.70), with no evident liquidity strain. The balance sheet is exceptionally liquid (current ratio ~9.9x) and conservatively levered (D/E 0.13x). ROE was a healthy 16.3%, driven primarily by very high margins rather than leverage, as financial leverage is low (1.13x) and asset turnover is modest (0.362x) due to large cash holdings. Reported ROIC (-217.7%) appears distorted by the framework used (likely invested capital depressed by excess cash), and does not reflect underlying economics. The divergence between reported XBRL ratios (e.g., operating margin 0.6%, ROA 0.2%) and calculated figures suggests we should rely on the calculated metrics provided here. Forward-looking, the company’s cash-rich position, improving margins, and disciplined cost base provide flexibility for continued investment and shareholder returns. Key watchpoints are maintaining operating leverage as the business scales and avoiding dilution of asset efficiency from sustained cash accumulation. Overall, the quarter confirms resilient demand, cost control, and high-quality earnings.

Profitability Analysis

DuPont ROE = Net Profit Margin × Asset Turnover × Financial Leverage = 39.7% × 0.362 × 1.13 ≈ 16.3%. The dominant driver of ROE is the very high net profit margin, with limited contribution from leverage (1.13x) and a dampening effect from low asset turnover (0.362), which is suppressed by excess cash. The component that changed most versus last year is likely margin, inferred from operating income growing faster than revenue (+11.4% vs +8.0%), implying positive operating leverage. Business reason: fixed-cost absorption and controlled SG&A (SG&A ratio ~24.8%) in an asset-light model with high gross margin (75.7%). Sustainability: margin resilience appears credible given the cost structure and minimal capex needs, but maintaining >55% operating margin will depend on continued pricing power/mix and scale benefits; one-off items seem minimal (non-operating income 0.02). Concerning trends: none evident in expense growth vs revenue given data constraints; however, asset turnover is structurally low due to large cash balances, which could weigh on ROE if margins compress. Monitoring SG&A growth vs revenue is important, but YoY SG&A data were unreported.

Growth Assessment

Top-line growth of 8.0% YoY indicates steady demand. Operating income growth of 11.4% YoY outpaced revenue, confirming positive operating leverage and an expanding operating margin to 56.6%. Net income increased 12.5% YoY, with net margin at 39.7%; the effective tax rate (30.8%) is stable and does not suggest tax-driven profit volatility. Non-operating contributions were negligible (0.02), so growth is largely core-operating. The high gross margin (75.7%) supports a thesis of scalable, high-value services. With capex at only 0.07, growth is not capex-intensive, pointing to scalability. Outlook depends on sustaining demand and mix; given the cash-rich position, the company can invest in organic growth and selective returns without financing risk. Absent segment detail, we assume growth is broad-based within the core business. Risks to growth include potential normalization of margins from competition or pricing pressure; however, current data reflect solid momentum.

Financial Health

Liquidity is exceptionally strong: current ratio 989.6% and quick ratio 989.6%; no warning thresholds triggered. Balance sheet is cash-heavy (cash 35.71 vs total assets 37.70), providing a large liquidity buffer. Solvency is conservative with D/E of 0.13x and total liabilities of 4.36 against equity of 33.25. No explicit interest-bearing debt breakdown was reported, but low leverage suggests minimal debt service burden. Maturity mismatch risk is low: current assets (36.99) comfortably exceed current liabilities (3.74). Off-balance sheet obligations were not disclosed; none can be inferred from the provided data. Equity ratio (not provided) would be high given equity 33.25 vs assets 37.70 (~88% by calculation), underscoring balance sheet strength.

Cash Flow Quality

OCF/Net Income of 1.08x indicates earnings are backed by cash, with no immediate quality concerns. Free cash flow of 3.17 was positive after modest investing outflows (-2.71) and minimal capex (-0.07), suggesting maintenance capex needs are low and OCF can comfortably fund both capex and ordinary dividends. Financing cash outflows (-7.62) were driven by sizable share repurchases (-7.40), financed from existing cash without stressing liquidity. Working capital appears well-managed given high cash and small receivables (1.08); no signs of working capital manipulation are evident from the limited data (e.g., no spike in payables; accounts payable 0.12 is low). Given OCF > NI threshold (0.8), earnings quality screens as sound.

Dividend Sustainability

The calculated payout ratio is 13.7% (reported 0.1% appears inconsistent), indicating ample headroom. FCF coverage of dividends is 4.27x, implying sustainability under current earnings and cash flow. DPS and total dividends paid were unreported, so assessment relies on the calculated payout ratio and cash generation. With abundant cash and modest capex, the company can sustain and potentially increase shareholder returns while maintaining flexibility. Policy outlook cannot be confirmed due to missing disclosures, but recent buybacks (-7.40) signal a shareholder-friendly capital allocation stance.

Risk Assessment

Business Risks:

• Margin compression risk if competition intensifies in core services, reducing pricing power
• Revenue concentration or key-customer dependency risk (not disclosed but common in niche, high-margin models)
• Execution risk in scaling operations while maintaining service quality and cost discipline
• Regulatory and data-privacy risks if the business involves handling user or client data

Financial Risks:

• Asset efficiency risk: large cash holdings depress asset turnover, potentially lowering ROE if margins normalize
• Capital allocation risk: continued large buybacks without growth reinvestment may not optimize long-term ROIC
• Reported ROIC (-217.7%) distortion may obscure true returns on operating capital, complicating performance assessment

Key Concerns:

• Sustainability of very high operating margin (56.6%) as the business scales
• Limited disclosure on SG&A breakdown and YoY trends, which constrains cost-structure visibility
• Potential misinterpretation from inconsistent reported ratios (e.g., operating margin 0.6% vs calculated 56.6%)

Investment Implications

Key Takeaways:

• Double-digit profit growth with margin expansion (operating margin ~56.6%, net margin ~39.7%)
• OCF > NI (1.08x) and positive FCF (3.17) indicate strong earnings quality
• Exceptionally strong liquidity and low leverage provide resilience and optionality
• ROE of 16.3% is driven by high margins rather than leverage; asset turnover is structurally low due to excess cash
• Significant buybacks (-7.40) signal proactive shareholder returns without stressing liquidity
• Reported ROIC is not decision-useful given distortion from excess cash/invested capital definitions

Metrics to Watch:

• Operating margin trend and SG&A growth vs revenue
• OCF/Net Income ratio sustainability
• Asset turnover and cash deployment plans (M&A, dividends, further buybacks)
• Effective tax rate stability
• Receivables and payables trends for working capital discipline

Relative Positioning: Within high-margin, asset-light peers, the company stands out for extreme liquidity, low leverage, and strong cash conversion; the main trade-off is lower asset turnover from excess cash, making margin preservation and disciplined capital allocation the critical differentiators.

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