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

For FY2025 Q4 (JGAAP, non-consolidated), 株式会社ジェノバ delivered solid growth and high profitability, with revenue of ¥1,366 million (+8.0% YoY) and operating income of ¥773 million (+11.4% YoY). Operating leverage appears favorable as operating income growth outpaced revenue growth, supported by a very high gross margin of 75.7% (gross profit ¥1,033.7 million). Net income rose 12.5% YoY to ¥542 million, translating to a robust net margin of 39.7%, indicating disciplined cost control and limited non-operating drag. EBITDA came in at ¥815.0 million with a margin of 59.7%, underlining a capital-light model and low non-cash expense burden (D&A ¥42.0 million, ~3% of sales). The company’s DuPont profile is attractive: net margin 39.68%, asset turnover 0.362x, and low financial leverage of 1.13x, yielding a calculated and reported ROE of 16.30%, which is strong for a low-leverage balance sheet. Liquidity is exceptionally ample with current assets of ¥3,699 million versus current liabilities of ¥374 million (current ratio ~9.9x), suggesting substantial headroom to meet obligations and fund working capital. On solvency, total liabilities are modest at ¥436 million against equity of ¥3,325 million; the reported debt-to-equity ratio of 0.13x implies conservative use of interest-bearing debt. Cash generation quality is solid: operating cash flow of ¥588 million slightly exceeds net income (OCF/NI 1.08x), and free cash flow is positive at ¥317 million after ¥271 million of investing outflows. Financing cash outflows of ¥762 million likely reflect balance sheet optimization (e.g., debt repayment or other financing-related uses) rather than dividends, as DPS is reported at ¥0.00. While the provided “effective tax rate” shows 0.0%, the reported income tax expense of ¥214.4 million implies an effective rate of roughly 28–29% based on pre-tax income inferred from net income and taxes. The equity base of ¥3,325 million anchors stability, enabling continued reinvestment without near-term external funding needs. The company’s margins and ROE indicate a defendable competitive position and/or differentiated offering, although sustainability depends on maintaining high pricing power and cost efficiency. Absent reported inventories and with a quick ratio equal to the current ratio, the business likely has limited inventory requirements, consistent with a services or software-like model, but this is an inference given disclosure limits. Dividend policy appears conservative with a payout ratio of 0.0%, signaling a reinvestment focus; with positive FCF, capacity for future shareholder returns exists if strategy shifts. Data limitations are notable for certain line items (e.g., cash and equivalents, inventories, share counts, equity ratio), but available non-zero data coherently depict a high-margin, low-leverage, cash-generative profile.

Profitability Analysis

ROE of 16.30% is driven primarily by an exceptional net profit margin of 39.68%, with modest asset turnover of 0.362x and low financial leverage of 1.13x. Operating margin is approximately 56.6% (operating income ¥773m / revenue ¥1,366m), reflecting strong cost discipline after gross margin of 75.7%. EBITDA margin of 59.7% further confirms limited non-cash costs (D&A ~3.1% of sales), supportive of high operating cash conversion. The spread between gross and operating margin (~19pp) is reasonable for a high-margin model, indicating SG&A intensity is present but well-managed. Ordinary income (¥782m) is close to operating income, implying minimal non-operating headwinds. The tax burden, inferred at about 28–29%, is consistent with domestic statutory ranges and does not unduly depress net returns. Operating leverage appears favorable with operating income growth (+11.4% YoY) exceeding revenue growth (+8.0% YoY), suggesting scale benefits and/or pricing power. With negligible reported interest expense and low leverage, financial leverage is not a major ROE driver; core profitability carries returns.

Growth Assessment

Top-line growth of 8.0% YoY to ¥1,366 million is healthy, pointing to steady demand. Profit growth outpaced sales (operating income +11.4%, net income +12.5%), indicating margin expansion from operating leverage and cost efficiencies. High gross and EBITDA margins suggest revenue quality is strong, potentially underpinned by recurring or high-value-added offerings; however, sustainability depends on competitive dynamics and customer retention, which are not disclosed. OCF/NI at 1.08x supports earnings quality and indicates that profit growth is not purely accounting-driven. Investing cash outflows of ¥271 million may reflect continued growth investments (e.g., development or equipment/intangibles), supportive of future capacity or product enhancement. Outlook-wise, maintaining the 75%+ gross margin and mid-to-high 50s operating margin will be key; any mix shift or pricing pressure would directly impact returns given asset-light turnover. With conservative leverage and strong liquidity, the company is positioned to fund organic growth; M&A optionality is present but not evidenced in this period’s data.

Financial Health

Liquidity is very strong: current assets ¥3,699 million vs. current liabilities ¥374 million yields a current ratio of ~9.9x; quick ratio is the same due to unreported inventories. Working capital is ample at ¥3,325.6 million, affording significant buffer for operations and growth. Solvency is robust: total liabilities ¥435.6 million against equity ¥3,325 million, and low reported debt-to-equity of 0.13x indicates conservative balance sheet risk. Financial leverage (assets/equity) is 1.13x, consistent with DuPont inputs and pointing to low gearing. Reported interest expense is zero and interest coverage is shown as 0.0x; given minimal debt indicators, interest burden is likely immaterial. Equity ratio is undisclosed in the dataset; however, equity/asset math implies roughly 88% equity to assets, highlighting balance sheet strength (noting formal metric was unreported). Overall, the company exhibits low refinancing risk and high capacity to absorb shocks.

Cash Flow Quality

Earnings quality is sound with OCF of ¥588 million exceeding net income of ¥542 million (OCF/NI 1.08x), indicating accruals are modest and working capital movements are supportive. Free cash flow of ¥317 million (OCF ¥588m less investing CF ¥271m) is positive, evidencing self-funding capacity after reinvestment. Investing cash outflows likely represent capex or intangibles; D&A of ¥42 million is well below OCF, suggesting disciplined capital intensity. Working capital appears well managed given strong liquidity and positive OCF; with inventories unreported, the bulk of current assets is likely cash and receivables, but exact composition is not disclosed. Financing CF of -¥762 million implies outflows for debt repayment or other financing uses, while dividends are reported as zero. Overall cash generation aligns with reported profitability and supports future growth investments or potential shareholder returns if policy changes.

Dividend Sustainability

Reported DPS is ¥0.00 with a payout ratio of 0.0%, indicating an explicit reinvestment stance. Given free cash flow of ¥317 million and low leverage, the firm has capacity to consider distributions in the future while maintaining balance sheet strength. FCF coverage is shown as 0.00x due to zero dividends; from a capacity perspective, current FCF would fully cover modest prospective payouts if pursued. Absent a disclosed dividend policy, sustainability hinges on maintaining OCF/NI ≈1.0x+, stable margins, and reinvestment needs. With liquidity ample and financing outflows already absorbed, initiating or increasing dividends would be a strategic choice rather than a funding constraint. Near-term, retained earnings support growth and resilience.

Risk Assessment

Business Risks:

• Margin compression risk if pricing power erodes or input/operating costs rise, given high current margins.
• Revenue concentration or customer churn risk (not disclosed), which could impact an asset-light, high-margin model.
• Execution risk on growth investments reflected in investing CF (¥271m), including potential delays or lower-than-expected returns.
• Competitive intensity in core markets, potentially pressuring gross margin (75.7%) and operating margin (~56.6%).
• Regulatory and tax risks; inferred effective tax rate ~28–29% could vary with tax law or profit mix.

Financial Risks:

• Potential cash flow timing risk despite strong OCF/NI, if receivables collection extends (composition of current assets not disclosed).
• Dependence on internal funding; while liquidity is ample, limited external leverage usage may constrain rapid scale-ups without tapping markets.
• Exposure to non-operating items is low currently but could increase (ordinary income close to operating income this period).

Key Concerns:

• Sustainability of exceptionally high margins over the medium term.
• Limited disclosure on cash, inventories, and share count, constraining per-share and capital allocation analysis.
• Visibility on dividend policy and capital return priorities given zero payout despite positive FCF.

Investment Implications

Key Takeaways:

• High-margin, asset-light profile with ROE of 16.3% driven primarily by a 39.7% net margin rather than leverage.
• Strong liquidity (current ratio ~9.9x) and low leverage (debt-to-equity 0.13x) provide resilience and optionality.
• Solid cash conversion (OCF/NI 1.08x) and positive FCF of ¥317m underpin self-funded growth.
• Operating leverage evident as operating income growth (+11.4% YoY) outpaced sales (+8.0% YoY).
• Dividend capacity exists but policy remains reinvestment-focused with DPS at ¥0.00.

Metrics to Watch:

• Gross and operating margins (75.7% and ~56.6%) for signs of pricing or cost pressure.
• OCF/NI ratio and working capital turns to monitor earnings quality.
• Asset turnover (0.362x) to gauge scalability and growth efficiency.
• Investing cash flows and D&A to track capital intensity and future growth investments.
• Any updates on dividend policy, share count, and capital allocation disclosures.

Relative Positioning: Within TSE-listed peers in asset-light and service-oriented segments, the company appears above-average on profitability (EBITDA margin ~60%, ROE 16% with low leverage) and balance sheet strength, with steady growth and strong cash conversion supporting a quality profile; disclosure depth is somewhat limited, which tempers cross-peer comparability.

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