AUTOSERVER CO.,LTD. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥4.88B
• Operating Income: ¥1.82B
• Net Income: ¥1.14B
• EPS: ¥159.67

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

Auto Server (55890) reported FY2025 Q3 single-entity (JGAAP) results showing resilient topline growth but softer profitability. Revenue was 4,884 million yen, up 2.0% year on year, indicating steady transaction activity in its core business. Gross profit reached 3,542.9 million yen, translating to a high gross margin of 72.5%, consistent with an asset-light, fee-based model. Operating income declined 8.0% to 1,816 million yen, implying margin compression despite the solid gross margin, likely driven by higher SG&A or strategic investments in growth. Ordinary income was 1,825 million yen, slightly above operating income, suggesting modest non-operating gains that offset interest expense of 12.5 million yen. Net income declined 7.3% to 1,144 million yen, with a net margin of 23.4%, still robust but lower than last year given the operating deleverage. The effective tax burden implied by reported taxes (approximately 40.3%) contrasts with the calculated “0.0%” provided in the metrics, which is not reflective of the disclosed tax expense. DuPont shows a calculated ROE of 9.02%, driven by a high net margin (23.4%), low asset turnover (0.232x), and moderate financial leverage (assets/equity ≈ 1.66x). Liquidity is strong with a current ratio of 226.8% and working capital of 7,504.9 million yen, indicating ample near-term coverage. Leverage appears conservative with a total debt-to-equity proxy of 0.49x based on total liabilities; interest coverage is very strong at 145x. Cash flow line items were not disclosed (zeros should be read as unreported), so operating cash flow and free cash flow cannot be assessed from this filing. Equity ratio reported as 0.0% is also an unreported item; the balance of total equity versus total assets suggests a materially positive equity ratio. Dividend figures (DPS and payout) are not disclosed; EPS of 159.67 yen is provided, but share count and BVPS are unreported. Overall, the company exhibits a high-margin, asset-light profile with solid financial flexibility, though near-term profitability has softened due to operating cost pressure. Key uncertainties include the absence of cash flow disclosure, lack of dividend policy detail, and incomplete equity metrics. The outlook hinges on management’s ability to re-tighten SG&A, sustain take rates, and maintain transaction volumes in its marketplace/fee businesses.

Profitability Analysis

ROE_decomposition: ROE 9.02% = Net margin 23.42% × Asset turnover 0.232 × Financial leverage 1.66. The ROE is margin-driven; low asset turnover (typical for cash-rich, platform-like models) and moderate leverage cap overall ROE. margin_quality: Gross margin of 72.5% (gross profit 3,542.9m on revenue 4,884m) highlights a predominantly fee-based revenue mix with limited direct cost of sales. Operating margin is approximately 37.2% (1,816m/4,884m), down YoY given operating income fell 8% while revenue rose 2%. Net margin of 23.4% remains high despite deleveraging at the operating level. The tax expense of 735.2m implies an effective tax rate of ~40.3%, not the 0.0% shown in automated metrics. operating_leverage: Revenue grew +2.0% YoY while operating income fell -8.0%, indicating negative operating leverage this quarter, likely from elevated SG&A (e.g., personnel, marketing, IT, listing acquisition) or one-off costs. Ordinary income modestly exceeded operating income, suggesting limited but positive non-operating contributions.

Growth Assessment

revenue_sustainability: Topline grew 2.0% YoY to 4,884m, implying stable transaction volumes and/or take rates. The high gross margin is consistent with recurring fee income, which supports sustainability if platform engagement remains healthy. profit_quality: Despite strong gross margin, operating income declined, indicating cost pressure. With interest expense only 12.5m and ordinary income near operating income, core profit quality remains closely tied to operating execution rather than financial items. outlook: Near-term growth depends on restoring operating leverage via SG&A control and maintaining marketplace activity. With limited balance sheet leverage and high margins, the company has flexibility to invest, but visibility is tempered by missing cash flow disclosures and lack of detail on user/volume KPIs.

Financial Health

liquidity: Current assets 13,423.2m vs current liabilities 5,918.3m yield a current ratio of 226.8% and sizeable working capital of 7,504.9m. Quick ratio mirrors the current ratio given inventories are unreported (0 shown). Near-term liquidity appears strong. solvency: Total liabilities of 6,174.5m vs total equity of 12,678m imply low leverage (D/E ≈ 0.49x). Interest coverage is 145.1x (operating income 1,816m / interest expense 12.5m), indicating ample debt service capacity. capital_structure: Assets 21,012m and equity 12,678m imply financial leverage (A/E) of ~1.66x. The reported equity ratio of 0.0% is an unreported item; using provided totals implies an equity ratio around 60%+, underscoring a conservative balance sheet.

Cash Flow Quality

earnings_quality: Net income of 1,144m is supported by high operating margins and minimal reliance on non-operating gains. Effective tax recognition (~40%) supports the earnings’ accrual integrity. However, lack of depreciation disclosure (0 shown) limits assessment of non-cash components. FCF_analysis: Operating CF, investing CF, and financing CF were not disclosed (0 indicates unreported). As such, free cash flow cannot be calculated and OCF/NI ratios derived as 0.00 are not meaningful. working_capital: Working capital is strong at 7,504.9m. Without cash flow statements, we cannot evaluate period-to-period movements in receivables, payables, or contract liabilities, but the high current asset base suggests ample buffer to absorb timing differences.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio figures are not disclosed in this dataset (0 indicates unreported). EPS is 159.67 yen, providing an earnings base for future distribution analysis once policy details are available. FCF_coverage: FCF is unreported; therefore, cash dividend coverage cannot be assessed from this filing. policy_outlook: No dividend policy information is available here. Given the high margins and conservative leverage, the company appears to have capacity for distributions, but confirmation requires disclosed cash flows, policy statements, and capital allocation priorities.

Risk Assessment

Business Risks:

• Operating leverage risk: cost growth outpacing revenue (+2% revenue vs -8% operating income).
• Market cycle exposure in used-vehicle transactions and dealer activity that can affect take rates and volumes.
• Platform competition potentially pressuring pricing and margins.
• Regulatory and compliance changes in vehicle transactions and data handling.
• Concentration risk if revenue depends on a limited cohort of professional dealers or auction partners.

Financial Risks:

• Lack of disclosed cash flow data obscures working capital and FCF dynamics.
• Potential tax rate volatility (effective rate ~40% this period) impacting net income.
• Exposure to interest rate changes is low currently, but funding terms for customers or partners could indirectly affect volumes.
• Data gaps in inventory and cash balances (shown as 0) limit precise liquidity stress testing.

Key Concerns:

• Negative operating leverage in FY2025 Q3 despite revenue growth.
• Absence of cash flow disclosure, hindering FCF quality assessment.
• Unreported equity ratio and share data complicate per-share and capital efficiency analysis.

Investment Implications

Key Takeaways:

• High-margin, asset-light model with gross margin at 72.5% and net margin at 23.4%.
• ROE of 9.0% primarily margin-driven; asset turnover is low at 0.232x.
• Operating deleverage this quarter: operating income -8% vs revenue +2%.
• Strong liquidity (current ratio 2.27x, interest coverage 145x) and modest leverage (D/E ~0.49x).
• Cash flow and dividend data are not disclosed; assessment of FCF and payout capacity remains incomplete.

Metrics to Watch:

• Operating margin trajectory and SG&A as a percentage of sales.
• Transaction volume, take rate, and customer cohort KPIs (if disclosed).
• Effective tax rate normalization and any one-off items.
• Working capital turns and OCF conversion once cash flow statements are available.
• Ordinary income vs operating income spread (non-operating gains/losses).

Relative Positioning: Within Japan’s auto distribution/auction platform space, the company’s margin and leverage profile suggest an asset-light operator with strong pricing power and conservative balance sheet; nearer-term profitability lag reflects cost investments or pressure relative to modest topline growth.

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