Jimoty,Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥1.42B
• Operating Income: ¥395M
• Net Income: ¥317M
• EPS: ¥32.04

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

Verdict: Solid top-line growth with resilient bottom-line, but operating margin compressed due to cost creep; balance sheet remains exceptionally liquid and lowly leveraged. Revenue rose to 14.20 (+5.4% YoY), while operating income declined to 3.95 (-8.0% YoY) and ordinary income to 4.02 (-7.3% YoY); net income increased to 3.17 (+5.2% YoY). Operating margin stands at 27.8% (3.95/14.20), ordinary margin at 28.3% (4.02/14.20), and net margin at 22.3% (3.17/14.20). Using the reported YoY deltas, we estimate prior-year revenue at ~13.47 and operating income at ~4.29, implying operating margin compressed by roughly 410 bps YoY (from ~31.9% to 27.8%). Net margin is essentially flat YoY at ~-10 bps (from ~22.4% to 22.3%), supported by lower non-operating drag and manageable taxes. Gross margin is very high at 85.4%, consistent with an asset-light platform model; note a line-item mismatch between cost of sales and gross profit—analysis relies on the gross margin provided. ROE is a strong 19.1%, driven predominantly by high net margin (22.3%) with modest leverage (assets/equity 1.43x) and low asset turnover (0.599x). The balance sheet is cash-heavy (cash 13.03) with minimal debt (long-term loans 0.15), producing a current ratio of 432.7% and D/E of 0.23x. Interest burden is negligible (interest expense 0.01) with a very high interest coverage (689x reported). Operating cash flow was not disclosed, preventing an assessment of earnings-to-cash conversion and free cash flow coverage. SG&A at 7.82 outweighed revenue growth, explaining the operating margin compression despite high gross margin. Forward-looking, maintaining growth while reining in operating expenses will be key to restoring margin expansion; net cash provides strategic flexibility for investment without balance sheet strain. Absence of dividend disclosure suggests reinvestment focus or policy still evolving. Data limitations (notably cash flow and some balance sheet inconsistencies) temper confidence; nonetheless, liquidity and profitability metrics on disclosed items are robust.

Profitability Analysis

ROE (19.1%) = Net Profit Margin (22.3%) × Asset Turnover (0.599x) × Financial Leverage (1.43x). The largest YoY movement appears in operating profitability: operating income fell 8.0% against +5.4% revenue, implying operating margin compressed by 410 bps (31.9%→27.8%). The business driver is SG&A growth outpacing revenue, likely from user acquisition/marketing, product development, or trust & safety investments typical for classifieds platforms. Net margin held broadly flat (-10 bps), cushioned by low financing costs and a stable effective tax rate of 30.3%. Asset turnover is structurally low for a cash-rich, asset-light model; the increase in cash balances relative to revenue likely dampens turnover. Leverage is modest (1.43x), offering little ROE amplification but contributing to low risk. Sustainability: high net margin is credible for a two-sided platform, but further margin expansion depends on cost discipline; the recent deleverage looks cyclical/managerial rather than structural. Watch for any trend where SG&A growth persistently exceeds revenue growth as a sign of negative operating leverage.

Growth Assessment

Revenue growth of +5.4% YoY indicates steady but moderate expansion, consistent with a maturing platform. Operating income decline (-8.0%) versus revenue growth signals negative operating leverage in the period. Net income growth (+5.2%) despite weaker operating profit suggests below-the-line items and taxes did not deteriorate, preserving bottom-line resilience. Gross margin at 85.4% underscores a scalable model; however, SG&A management will determine how much growth translates to profit. With no disclosure on OCF, cohort/MAU or monetization metrics, sustainability of growth is uncertain from financials alone. Outlook hinges on user growth, ad demand, and potential expansion of fee-based services; cost optimization could quickly restore operating margins given the high gross margin buffer.

Financial Health

Liquidity is very strong: current assets 15.43 vs current liabilities 3.57 yields a current ratio of 432.7% (no warning; >>1.0). Quick ratio equals current ratio given negligible inventories, also 432.7%. Balance sheet conservatism is evident with cash and deposits of 13.03 far exceeding total current liabilities. Solvency: D/E is 0.23x (well below the 1.5x benchmark), with long-term loans at 0.15 and minimal interest burden. No explicit off-balance sheet obligations disclosed. Maturity mismatch risk is low: cash comfortably covers short-term obligations. Note: reported totals for assets and equity/liabilities show inconsistencies versus subtotals; analysis relies on the internally consistent ratios provided (e.g., current ratio, D/E) and key line items.

Cash Flow Quality

Operating cash flow, investing cash flow, and free cash flow are not disclosed; thus OCF/Net Income and FCF coverage cannot be assessed. Given the cash-rich position and low debt, near-term liquidity is ample, but the sustainability of earnings in cash terms remains unverified. Without working capital detail, we cannot identify timing effects (receivables/payables swings) or potential revenue cash conversion risks. No evidence of working capital manipulation can be inferred from the limited data.

Dividend Sustainability

Dividend-related items (DPS, payout, dividends paid, buybacks) are unreported. With strong net income and significant net cash, financial capacity to pay dividends appears sufficient, but policy intent is unknown. Without OCF/FCF disclosure, we cannot confirm cash coverage of any distributions. Near-term capital allocation likely prioritizes reinvestment or balance sheet optionality.

Risk Assessment

Business Risks:

• Operating deleverage: SG&A growth outpaced revenue, compressing operating margin by ~410 bps YoY.
• Digital advertising and marketplace demand cyclicality impacting monetization and ARPU.
• Competitive intensity from horizontal/vertical marketplaces and C2C platforms potentially pressuring take rates and marketing spend.
• Platform trust & safety costs (fraud prevention, moderation) that may structurally lift opex.
• Execution risk in new service monetization or regional expansion.

Financial Risks:

• Limited disclosure of cash flows prevents assessment of earnings-to-cash conversion.
• Potential reliance on advertising revenues exposes the company to CPM/CPC volatility.
• Accounting data inconsistencies across some line items may mask underlying trends.

Key Concerns:

• Margin compression despite revenue growth suggests negative operating leverage in the quarter.
• Low asset turnover (0.599x) reflects cash-heavy structure; excess cash deployment strategy is unclear.
• Absence of dividend/CF guidance limits visibility on capital return and cash discipline.

Investment Implications

Key Takeaways:

• Revenue grew +5.4% YoY to 14.20 with net income up +5.2% to 3.17, but operating income fell -8.0% to 3.95.
• Operating margin compressed by ~410 bps YoY to 27.8%; net margin stable at 22.3%.
• ROE is robust at 19.1%, driven by high profitability rather than leverage.
• Balance sheet strength: current ratio 4.33x, D/E 0.23x, ample cash (13.03) vs CL (3.57).
• Interest burden negligible; coverage extremely high (reported 689x).
• Cash flow data absent; cannot validate earnings quality or FCF.

Metrics to Watch:

• Operating cash flow and OCF/Net Income (>1.0 desirable).
• SG&A growth vs revenue growth to gauge operating leverage.
• ARPU/monetization rates, ad fill and pricing, and take rate in fee services.
• User growth (MAU/DAU), engagement, and cohort retention.
• Effective tax rate stability and any changes in non-operating items.
• Cash deployment (capex, M&A, marketing) and any dividend/buyback policy updates.

Relative Positioning: Within domestic internet/platform small caps, the company exhibits above-average profitability (high gross and net margins) and very conservative balance sheet, but faces typical sector headwinds of operating leverage sensitivity and ad/marketplace cyclicality; limited disclosure reduces visibility relative to best-in-class peers.

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