Brangista Inc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥5.20B
• Operating Income: ¥1.15B
• Net Income: ¥168M
• EPS: ¥49.80

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

Brangista (6176) reported FY2025 Q4 consolidated results under JGAAP showing solid top-line growth and stronger operating leverage. Revenue rose 7.8% YoY to ¥5.20bn, while operating income increased 21.1% to ¥1.15bn, indicating margin expansion. Net income grew 8.3% to ¥656m, with a net margin of 12.63%, reflecting healthy profitability for an asset-light business. Gross profit of ¥3.61bn implies a high gross margin of 69.4%, consistent with a digital/media-oriented cost structure. Operating margin reached 22.1% (¥1.151bn/¥5.196bn), up from an estimated 19.7% last year, evidencing positive operating leverage. Ordinary income of ¥1.12bn and minimal interest expense (¥4.3m) underscore low financial risk. DuPont analysis shows ROE at 10.76%, supported by a net margin of 12.63%, asset turnover of 0.591x, and modest financial leverage of 1.44x. The balance sheet is conservative, with total assets of ¥8.79bn and total equity of ¥6.10bn; implied equity ratio is about 69% despite the reported 0% placeholder figure. Liquidity is strong with a current ratio of 261% and working capital of ¥1.89bn. Cash generation was solid: operating cash flow (OCF) was ¥602m (0.92x of net income), and free cash flow (FCF) was ¥542m after ¥60m of investing outflows. Financing cash outflow of ¥160m suggests debt repayment or other shareholder/financing activities, while no dividend was paid in the period. The tax charge of ¥316m implies an effective tax rate around 32–33% based on an inferred pre-tax figure, rather than the reported 0% placeholder. Zeros shown for depreciation, EBITDA, cash, equity ratio, DPS, and share data are treated as undisclosed items, not actual zeros; analysis focuses on available non-zero data and reasonable inferences. Overall, results indicate improved profitability, strong cash conversion, and low leverage, with scope for continued reinvestment. Revenue growth sustainability will depend on client demand and the resilience of digital advertising/EC-related spending. Absent reported cash and share data, estimates are used where possible, and conclusions are framed with data limitations in mind.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 12.63% (¥656m / ¥5,196m)
• asset_turnover: 0.591x (Revenue ¥5,196m / Ending assets ¥8,791m; note uses period-end assets)
• financial_leverage: 1.44x (Assets ¥8,791m / Equity ¥6,099m)
• calculated_ROE: 10.76% (matches reported DuPont figure) margin_quality:
• gross_margin: 69.4% (¥3,607.9m / ¥5,196m) – consistent with asset-light, content/platform model
• operating_margin: 22.1% (¥1,151m / ¥5,196m) – expansion YoY
• ordinary_margin: 21.5% (¥1,120m / ¥5,196m) – minimal financing drag
• net_margin: 12.63% – after an implied effective tax rate ~32–33% operating_leverage: Revenue +7.8% YoY vs. operating income +21.1% indicates positive operating leverage. Estimated prior-year operating margin ≈19.7% (¥951m/¥4,820m), improving to 22.1% this year (+~2.4pp), suggesting good fixed-cost absorption and/or mix benefits. Interest coverage is very high at ~265x (EBIT/interest), reinforcing earnings resilience.

Growth Assessment

revenue_sustainability: Mid-single to high-single digit growth (+7.8% YoY) appears organic and consistent with digital/media demand; sustainability hinges on client budgets and execution in core offerings. profit_quality: Margin expansion and high gross margin suggest favorable mix and cost discipline. The difference between ordinary income (¥1,120m) and implied pre-tax (≈¥972m) indicates potential extraordinary items; excluding non-recurring effects, core profitability remains robust. outlook: With strong liquidity and low leverage, the company has capacity to invest in growth (content, platform enhancements, sales capacity). Watch for continuity of margin gains, client concentration risk, and macro-exposed ad/EC cycles.

Financial Health

liquidity: Current ratio 261% (¥3,064m/¥1,172m) and working capital ¥1,892m indicate ample short-term coverage; quick ratio equals current ratio due to undisclosed inventories. solvency: Total liabilities/equity ≈0.22x (¥1,323bn/¥6,099bn). Implied equity ratio ~69% (¥6,099m/¥8,791m), despite the reported 0% placeholder. Interest burden is minimal (¥4.3m), and coverage is ~265x. capital_structure: Low leverage with strong equity base; room for selective financing if needed. No clear evidence of significant interest-bearing debt from disclosed figures.

Cash Flow Quality

earnings_quality: OCF/Net income at 0.92x (¥602m/¥656m) is healthy, indicating solid accrual quality. The gap likely reflects working capital movements and taxes. FCF_analysis: FCF of ¥542m (OCF ¥602m minus investing CF ¥60m) demonstrates capacity for self-funded growth. Net CF was +¥382m after ¥160m financing outflow, implying a higher year-end cash balance (cash level itself undisclosed). working_capital: Current assets exceed current liabilities by ¥1,892m, supporting operational flexibility. Receivables management and contract billing terms will be key given the service-heavy model.

Dividend Sustainability

payout_ratio_assessment: Payout ratio reported as 0% due to no dividend; with net income of ¥656m and FCF of ¥542m, the capacity to pay is present, but policy appears to prioritize reinvestment. FCF_coverage: Not applicable for FY as DPS is undisclosed/zero; hypothetically, moderate dividends would be well-covered by FCF given low leverage and solid OCF. policy_outlook: Given growth investment needs and asset-light returns, a conservative or opportunistic payout policy is plausible until visibility on sustainable higher margins is established.

Risk Assessment

Business Risks:

• Cyclicality in advertising and digital marketing budgets affecting demand
• Client concentration risk typical of project-based media/EC services
• Execution risk in content development and platform/product updates
• Talent acquisition/retention and subcontracting cost inflation
• Competitive intensity from larger digital agencies/platforms
• Regulatory/privacy changes impacting digital marketing effectiveness

Financial Risks:

• Working capital timing (receivables collection cycles) impacting OCF
• Potential volatility from extraordinary gains/losses under JGAAP
• Limited disclosure of cash balance and debt composition (data gaps)
• Interest rate risk appears low but could grow if leverage increases

Key Concerns:

• Sustaining operating margin improvements as growth moderates
• Visibility on cash reserves and detailed debt structure due to undisclosed items
• Dependence on macro-sensitive ad/EC spending trends

Investment Implications

Key Takeaways:

• Margin expansion with revenue growth indicates positive operating leverage
• Strong balance sheet with implied ~69% equity ratio and minimal interest burden
• Good cash conversion (OCF/NI ~0.92x) and positive FCF
• ROE of 10.76% driven mainly by high margins rather than leverage
• Data gaps (cash, depreciation, share count) require cautious interpretation

Metrics to Watch:

• Operating margin sustainability and YoY change
• OCF/Net income and working capital days (AR and AP turnover)
• Order visibility/backlog or retained client metrics
• Extraordinary items’ impact on bridging ordinary income to pre-tax income
• Equity ratio (calculated) and any changes in interest-bearing debt
• Revenue growth trajectory vs. digital ad/EC market indicators

Relative Positioning: Within TSE-listed digital/media and marketing services peers, Brangista exhibits above-average gross margins, improving operating margins, strong liquidity, and low leverage, positioning it as an asset-light, cash-generative operator with moderate ROE driven by profitability rather than financial gearing.

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