ASIRO Inc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥6.65B
• Operating Income: ¥1.42B
• Net Income: ¥991M
• EPS: ¥140.51

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

Ashi ro Co., Ltd. (7378) delivered a strong FY2025 Q4 (IFRS, consolidated) with revenue of 66.47 and net income of 10.24, marking robust YoY growth of 41.6% and 620.1%, respectively. Operating income surged to 14.19 (+262.0% YoY), indicating significant margin expansion and improved cost discipline and/or operating leverage. The company’s net profit margin was 15.4%, supported by a relatively low effective tax rate of 13.5% and limited non-operating drag (ordinary income 13.44 vs operating income 14.19). Cash generation was solid with operating cash flow of 13.39, exceeding net income (OCF/NI 1.31x), and free cash flow of 12.89, reflecting disciplined investment (investing CF -0.50; capex -0.09). The balance sheet is conservative: total assets were 48.33 with total equity of 31.40 (equity ratio 64.8%), implying modest leverage (assets/equity 1.54x) and liabilities/equity of 0.56x. DuPont decomposition suggests ROE of 32.6% (net margin 15.4% × asset turnover 1.375 × leverage 1.54x), which is far above the reported ROE figure (0.4%), indicating a likely reporting/scaling anomaly in XBRL for the reported ROE. Liquidity appears strong, underpinned by cash and equivalents of 24.66, though detailed current liability data is unreported, limiting precision on current and quick ratios. Earnings quality looks healthy: EBITDA of 15.78 implies an EBITDA margin of 23.7%, consistent with strong operating performance and supported by reasonable D&A of 1.59. While the gross profit margin is provided at 26.2% (17.40/66.47), the stated cost of sales (29.54) does not reconcile with that gross profit, so caution is warranted when interpreting gross-level expense allocation. Dividend affordability appears comfortable: payout ratio is shown as 17.4% (reported 1.2% suggests possible data-tagging inconsistencies), and FCF coverage is indicated as 7.22x, though this does not fully reconcile with the disclosed FCF and dividends paid amounts. Capital allocation was prudent with negative financing cash flow (-4.20), including dividends (-0.98) and no reported share repurchases. Asset turnover of 1.375 indicates solid utilization of the asset base for a digital/marketing-driven model, supporting high ROE without excessive leverage. The results point to a business benefitting from scale effects and operating leverage, likely in lead-generation or legal media verticals, though segment detail is not provided here. Overall, the quarter demonstrates strong profitability, improving cash-flow conversion, and a solid balance sheet, with some XBRL inconsistencies at the gross margin and ROE reporting levels. Future focus should be on sustaining revenue growth quality, monitoring customer acquisition efficiency, and maintaining cash conversion. Given limited disclosure for working capital components and interest-bearing debt, we rely primarily on headline profits, cash flow, and equity ratio to assess financial health.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 15.4% (NI 10.24 / Revenue 66.47)
• asset_turnover: 1.375x (Revenue 66.47 / Assets 48.33; uses period-end assets)
• financial_leverage: 1.54x (Assets 48.33 / Equity 31.40)
• calculated_ROE: 32.6% (15.4% × 1.375 × 1.54)
• reported_ROE_note: Reported ROE 0.4% appears inconsistent with calculated ROE; likely an XBRL scaling/tagging issue. margin_quality:
• gross_margin: 26.2% (Gross profit 17.40 / Revenue 66.47). Note: does not reconcile with stated cost of sales 29.54.
• operating_margin: 21.3% (Operating income 14.19 / Revenue 66.47)
• EBITDA_margin: 23.7% (EBITDA 15.78 / Revenue 66.47)
• net_margin: 15.4% (Net income 10.24 / Revenue 66.47)
• tax_rate: 13.5% (Income tax 1.91 / PBT 14.15)
• commentary: Operating and EBITDA margins imply strong operating leverage and cost control. The low effective tax rate boosted net margin. Gross-level allocations appear inconsistent, so margin assessment relies on operating and net levels. operating_leverage: Significant positive operating leverage evidenced by revenue growth of +41.6% YoY versus operating income growth of +262.0% YoY. Fixed-cost absorption likely improved; SG&A discipline evident relative to revenue scale. D&A remains modest (1.59), supporting high EBITDA drop-through.

Growth Assessment

revenue_sustainability: Revenue grew 41.6% YoY to 66.47, indicating strong demand and/or improved monetization. Sustainability depends on customer acquisition efficiency, churn, and vertical exposure; segment detail not provided. profit_quality: Operating income increased to 14.19 (+262.0% YoY) and ordinary income 13.44 (+184.7% YoY), with net income 10.24 (+620.1% YoY), indicating improved operating leverage and limited non-operating friction. The low tax rate amplified growth. outlook: If the business can sustain mid-to-high double-digit top-line growth while maintaining current operating discipline, ROE should remain elevated. Key sensitivities include marketing ROI, CPC/CPA dynamics, and any regulatory changes in core verticals.

Financial Health

liquidity: Cash and equivalents were 24.66, substantial relative to total assets of 48.33. Current assets totaled 24.26; current liabilities were unreported, so current/quick ratios are not calculable. Working capital is shown as 24.26 but likely overstates true WC due to missing current liability disclosure. solvency: Equity ratio 64.8% (Equity 31.40 / Assets 48.33). Debt-to-equity shown as 0.56x appears to reflect total liabilities/equity (17.65/31.40), as interest-bearing debt is unreported. Leverage is low; balance sheet resilience is high. capital_structure: Owners' equity 21.34 (capital surplus 8.70; retained earnings 8.65). Cash-rich position and modest liabilities suggest capacity for continued investment and shareholder returns, subject to growth opportunities.

Cash Flow Quality

earnings_quality: OCF 13.39 exceeds NI 10.24 (OCF/NI 1.31x), indicating good cash conversion and limited accrual reliance. FCF_analysis: FCF reported at 12.89 appears to equal OCF plus total investing CF (13.39 + -0.50), implying a definition that includes all investing flows, not only capex. Capex was minimal at -0.09, consistent with an asset-light model. working_capital: Line-item detail (AR, AP, inventories) is unreported; however, positive OCF alongside strong growth suggests manageable working capital investment. Absence of current liability data limits precision.

Dividend Sustainability

payout_ratio_assessment: Calculated payout ratio is shown as 17.4%, while reported payout ratio is 1.2%; these figures are inconsistent with dividends paid of 0.98 and NI of 10.24 (which would imply ~9.6%). Data-tagging differences likely. Regardless, payout appears conservative. FCF_coverage: FCF coverage is shown as 7.22x; using FCF 12.89 and dividends 0.98 implies ~13.2x, suggesting definitional differences. Even on conservative assumptions, coverage is ample. policy_outlook: Given strong cash generation, low leverage, and modest dividends, the company has room to maintain or moderately increase dividends while prioritizing growth investments. Explicit DPS is unreported; policy clarity would enhance visibility.

Risk Assessment

Business Risks:

• Customer acquisition cost inflation (CPC/CPA increases) pressuring unit economics
• Dependence on key verticals (e.g., legal media/lead-gen) and advertiser budgets
• Regulatory or compliance changes affecting advertising and lead generation
• Competition from larger platforms aggregating similar demand
• Concentration risk if traffic relies on search algorithms or a few channels

Financial Risks:

• Limited disclosure on interest-bearing debt and current liabilities
• Potential volatility in tax rate (13.5% effective rate may normalize higher)
• Gross margin reporting inconsistency complicates cost-base monitoring
• Ordinary income sensitivity to non-operating items not fully disclosed

Key Concerns:

• Inconsistency between reported cost of sales, gross profit, and operating income figures
• Reported ROE (0.4%) conflicts with calculated ROE (32.6%), indicating XBRL reporting/scaling issues
• Incomplete working capital and debt disclosure constrains liquidity and leverage analysis

Investment Implications

Key Takeaways:

• Strong topline growth (+41.6% YoY) with outsized operating income growth (+262.0% YoY) indicates strong operating leverage
• High ROE of ~32.6% achieved with low balance sheet leverage (equity ratio 64.8%)
• Cash conversion is healthy (OCF/NI 1.31x) with robust FCF (12.89) and minimal capex (-0.09)
• Dividend burden is light and well-covered by FCF despite disclosure inconsistencies
• Data limitations at the gross margin level warrant focusing on operating and cash metrics

Metrics to Watch:

• Revenue growth rate and customer acquisition efficiency (CAC payback, LTV/CAC if disclosed)
• Operating margin and EBITDA margin sustainability
• Effective tax rate normalization
• OCF/NI ratio and changes in working capital
• Any disclosure on interest-bearing debt and current liabilities
• DPS and payout policy clarity

Relative Positioning: Within asset-light digital/media peers, Ashiro exhibits superior ROE and cash conversion with conservative leverage, positioning it favorably on profitability and balance sheet strength, subject to verification of cost structure disclosures.

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