SiriusVision CO.,LTD. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥1.41B
• Operating Income: ¥-151M
• Net Income: ¥-56M
• EPS: ¥-132.08

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

Sirius Vision Co., Ltd. reported FY2025 Q3 consolidated results under JGAAP with revenue of ¥1,409 million, down 18.5% year over year, indicating a challenging demand environment or order timing slippage. Despite the top-line decline, operating income remained a loss of ¥151 million (flat YoY by the provided indicator), suggesting some cost flexibility or SG&A containment offset the revenue contraction. Net income was a loss of ¥613 million, translating to a net margin of -43.5%, driven primarily by weak operating performance rather than financial items, as ordinary income equaled operating income. The DuPont decomposition yields an ROE of -32.2%, with negative margin overwhelming modest asset turnover of 0.532x and moderate financial leverage of 1.39x. Gross margin is shown at a high 60.1%, implying solid value-add or mix resilience; however, there is an inconsistency between the reported cost of sales and gross profit lines, so margin analysis should prioritize the provided calculated margin metric. Liquidity appears strong with a current ratio of 4.65x and quick ratio of 4.49x, supported by substantial working capital of approximately ¥1,760 million. The balance sheet indicates total assets of ¥2,650 million and total equity of ¥1,904 million, implying an equity ratio near 72% based on those figures (the reported 0.0% equity ratio appears unreported), and a conservative capital structure with debt-to-equity of 0.34x. Interest expense is minimal at ¥0.48 million, and interest coverage is negative due to operating losses, though financial risk from leverage looks contained. Cash flow statements were not disclosed (zeros indicate unreported items), limiting visibility on earnings quality, working capital dynamics, and free cash flow conversion. Inventory is low at ¥74.8 million, which, alongside a high quick ratio, suggests limited stock exposure and potentially a project or engineered-to-order revenue model where receivables dominate current assets. Tax expense of ¥39.4 million despite a net loss likely reflects non-cash deferred tax adjustments or non-income taxes; the stated effective tax rate of 0% should be interpreted cautiously given the loss position. Dividends were not paid (DPS ¥0), appropriate given losses and the need to preserve balance sheet strength. Overall, the company maintains robust solvency and liquidity but faces profitability headwinds stemming from demand softness and/or execution/timing effects. Near-term priorities include stabilizing revenue, preserving gross margin quality, and re-aligning fixed costs to current volume. Given limited cash flow disclosures and some line-item inconsistencies, conclusions rely on the provided calculated metrics and balance sheet figures.

Profitability Analysis

ROE of -32.2% is driven by a -43.5% net margin, modest 0.532x asset turnover, and 1.39x financial leverage. The dominant driver is margin pressure, not leverage, implying operational rather than financing issues. The 60.1% gross margin indicates strong pricing/mix or high-value content; however, the reported gross profit and cost of sales lines are inconsistent with revenue, so we anchor on the provided gross margin metric. Operating loss of ¥151 million with revenue down 18.5% YoY suggests negative operating leverage at current scale, but the loss being flat YoY indicates cost actions mitigated a larger deterioration. Ordinary income equals operating income, indicating minimal net non-operating drag; interest expense of ¥0.48 million is negligible. With depreciation unreported and EBITDA unreported, we cannot assess the contribution of non-cash charges; if D&A is low, the operating loss likely reflects cash-based SG&A and R&D burdens. The negative interest coverage (-314x based on loss/interest) is more a function of loss size than financial expense, underscoring that profitability recovery must come from revenue and cost structure, not balance sheet optimization. Sustaining the high gross margin while restoring scale is key to improving operating leverage and returning to break-even.

Growth Assessment

Revenue declined 18.5% YoY to ¥1,409 million, indicating subdued demand or delayed customer acceptance of systems/projects. The stable operating loss YoY suggests management reduced costs or improved mix to cushion the revenue shortfall. Given high apparent gross margins, revenue trajectory is the main determinant of profit normalization; modest volume recovery could have an outsized impact on operating income due to operating leverage. The absence of order/backlog disclosures and OCF data limits visibility into the sustainability of revenue; order timing likely remains a swing factor. Ordinary income tracking operating income implies limited contribution from interest/dividends or FX; hence organic operating trends will drive near-term growth. Profit quality needs validation through cash conversion once OCF is available; for now, net losses and tax charges (likely deferred) complicate read-throughs. Outlook hinges on demand in end-markets likely related to inspection/vision systems; cyclical upturns in electronics and capital spending could support sequential improvement. Near-term, we expect management focus on pipeline conversion, delivery execution, and expense discipline to reduce losses even on a subdued revenue base.

Financial Health

Total assets are ¥2,650 million and total equity ¥1,904 million, implying an approximate equity ratio of 71.9% (computed) and low financial risk, notwithstanding the reported 0.0% equity ratio figure which appears unreported. Total liabilities are ¥646 million, with current liabilities of ¥483 million, reflecting a conservative structure (debt-to-equity 0.34x). Liquidity is strong: current ratio 4.65x, quick ratio 4.49x, and working capital of ~¥1,760 million. Inventory of ¥74.8 million is modest, reducing obsolescence risk; however, the composition of current assets (cash vs. receivables) is undisclosed. Interest expense is only ¥0.48 million, indicating limited borrowing; solvency risk is primarily from ongoing losses rather than leverage. The negative earnings reduce retained earnings and ROE, but the sizable equity cushion provides runway to execute a turnaround. Tax expense of ¥39.4 million during a loss indicates potential deferred tax valuation adjustments; it does not materially affect liquidity but impacts reported equity.

Cash Flow Quality

Cash flow statements were not disclosed (operating, investing, and financing CF shown as 0 indicate unreported), so we cannot assess OCF/NI, free cash flow, or working capital cash dynamics. As such, the OCF/Net Income ratio of 0.00 and FCF of 0 are not decision-useful. Earnings quality remains unverified: the negative operating income suggests weak cash generation absent large non-cash charges, but D&A is also unreported. Working capital appears ample based on balance sheet levels; however, without CF data, we cannot judge collections, days sales outstanding, or inventory turns. Once available, we would evaluate OCF relative to operating loss, changes in receivables and contract assets, and capex intensity to gauge FCF sustainability.

Dividend Sustainability

The company paid no dividend (DPS ¥0), and the payout ratio is 0%, appropriate given the net loss of ¥613 million. With cash flow data unreported and operating losses ongoing, distributing cash would not be prudent. FCF coverage cannot be evaluated from the provided data; the stated 0.00x should be treated as unavailable. Policy-wise, preservation of cash and equity capital likely takes precedence until profitability and positive OCF resume. Future dividends would depend on restoring operating income, confirming cash conversion, and maintaining the currently strong balance sheet metrics.

Risk Assessment

Business Risks:

• Demand cyclicality in capital equipment/inspection markets leading to order volatility
• Project timing and acceptance risk affecting quarterly revenue recognition
• Customer concentration risk typical of specialized industrial equipment suppliers
• Competitive pricing pressure from domestic and global machine vision/inspection peers
• Technology obsolescence risk requiring sustained R&D investment to maintain margins
• Supply chain and component lead-time constraints that can delay deliveries
• Macroeconomic and capex cycle sensitivity in electronics and related industries

Financial Risks:

• Sustained operating losses eroding equity despite low leverage
• Limited visibility on cash flows due to unreported CF statements
• Potential working capital build if receivables stretch amid softer demand
• Tax-related non-cash charges (e.g., deferred tax valuation allowance) causing equity volatility
• Negative interest coverage driven by operating losses until profitability improves

Key Concerns:

• Revenue down 18.5% YoY with no disclosed order/backlog to gauge recovery
• Net margin -43.5% and ROE -32.2% indicating significant value erosion
• Inconsistency between reported cost of sales and gross profit; reliance on calculated gross margin
• Unreported cash flow data limits assessment of earnings quality and FCF
• Need to right-size costs to current revenue while preserving high gross margin

Investment Implications

Key Takeaways:

• Top-line contracted 18.5% YoY; recovery in orders is key to profit normalization
• High gross margin (60.1%) suggests strong product value but requires volume to absorb fixed costs
• Operating loss held flat YoY, implying initial cost actions mitigated deleverage
• Balance sheet is robust (approx. 72% equity ratio, low debt), providing operational flexibility
• Cash flow visibility is limited; confirmation of OCF and FCF improvement is critical for conviction

Metrics to Watch:

• Order intake, backlog, and book-to-bill ratio
• Gross margin trend and mix effects
• SG&A and R&D run-rate versus revenue (operating leverage)
• Operating cash flow, receivables days, and inventory turns
• Capex and any shift in net cash position
• Progress toward operating break-even and positive ordinary income

Relative Positioning: Within Japanese machine vision/inspection peers, Sirius Vision appears smaller scale with high apparent gross margins but currently loss-making; its balance sheet is conservative with low leverage, affording time to restore profitability, but limited disclosure on cash flows places it at a transparency disadvantage versus larger peers that report detailed OCF and backlog.

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