IMV CORPORATION FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥17.94B
• Operating Income: ¥2.31B
• Net Income: ¥1.53B
• EPS: ¥121.68

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

IMV Co., Ltd. delivered a strong FY2025 Q4 performance under JGAAP on a consolidated basis, with broad-based improvements across revenue growth, margins, and cash generation. Revenue rose 17.0% YoY to ¥17,941 million, while operating income increased 25.3% to ¥2,315 million, evidencing positive operating leverage. Ordinary income outpaced operating income at ¥2,569 million, suggesting supportive non-operating contributions (e.g., FX gains or financial income) that augmented core profitability. Net income advanced 35.5% to ¥1,935 million, pushing net margin to 10.79%, a notable expansion year over year. Gross margin stood at 32.2%, and operating margin at roughly 12.9%, reflecting improved cost discipline and/or mix tailwinds. ROE calculated via DuPont is 16.28% (net margin 10.79%, asset turnover 0.770, financial leverage 1.96), which is competitive for capital goods/test equipment peers. Cash flow quality is strong: operating cash flow of ¥3,848 million is 1.99x net income, and free cash flow totaled ¥2,646 million. Liquidity appears ample with a current ratio of 154.5% and working capital of ¥4,658 million. Solvency indicators are healthy; interest expense is only ¥18 million and interest coverage is 128.6x, implying modest leverage and low financial risk. While the disclosed equity ratio field shows 0.0%, the implied equity ratio using reported balances is approximately 51% (equity ¥11,884 million / assets ¥23,303 million), indicating a solid capital base. The effective tax rate line item shows 0.0% despite income tax expense of ¥424 million; this likely reflects data disclosure format rather than economic reality, and period-specific extraordinary items may also affect the tax rate. Dividend information is unreported (DPS and payout shown as 0.00), so no conclusions can be drawn about distribution policy from this dataset alone. The balance of ordinary over operating income and the very high OCF/NI ratio suggest non-operating tailwinds and/or working capital releases that may not fully recur. Nevertheless, the company exits FY2025 with strengthened profitability, a cleaner balance sheet, and robust cash generation capacity. Key areas to monitor into the next period include order momentum, backlog conversion, gross margin durability, and the sustainability of the cash flow uplift. Despite some unreported line items (e.g., inventories, cash and equivalents, share data), the available figures support the view of materially improved fundamentals. Overall, IMV’s FY2025 Q4 profile reflects enhanced earnings power, prudent leverage, and improved financial flexibility.

Profitability Analysis

ROE of 16.28% is driven by a 10.79% net margin, 0.770x asset turnover, and 1.96x financial leverage per the provided DuPont set. The step-up in operating income (+25.3% YoY) versus revenue (+17.0% YoY) implies positive operating leverage of roughly 1.5x, helped by gross margin at 32.2% and controlled opex. Operating margin approximates 12.9% (¥2,315m / ¥17,941m), while ordinary margin is higher at 14.3% due to non-operating gains. EBITDA of ¥2,898m equates to a 16.2% margin, indicating healthy underlying earnings capacity relative to depreciation of ¥583m. Interest burden is negligible (interest expense ¥18m; coverage 128.6x), minimizing financial drag on profitability. The margin mix suggests improvements in pricing/mix or cost absorption, but part of the margin uplift above operating level stems from non-operating items, which may be less predictable. Overall profitability quality appears good, with core operations expanding and low financial friction, though sustainability of non-operating add-ons should be watched.

Growth Assessment

Revenue grew 17.0% YoY to ¥17,941m, a solid acceleration consistent with robust demand for testing/vibration systems and related services. Operating income increased 25.3% YoY, signaling efficiency gains and favorable mix. Net income rose 35.5% YoY, benefiting from both operating leverage and non-operating contributions (ordinary income exceeded operating income by ¥254m). Revenue sustainability will hinge on order intake from automotive, electronics, industrial, and R&D segments, as well as global capex cycles; no order/backlog data were disclosed here. Profit quality is underpinned by a strong EBITDA margin (16.2%) and low interest burden; however, the delta between ordinary and operating income indicates some reliance on non-operating factors. The high OCF/NI ratio (1.99x) may reflect a working capital release, which is positive but not guaranteed to recur. With depreciation at ¥583m versus robust OCF and FCF, reinvestment capacity to support growth looks ample. Outlook depends on backlog conversion, project execution, and supply chain stability; maintaining gross margin around low-30s will be key for sustaining double-digit operating margin. Tax normalization and any changes in non-operating items could moderate net income growth relative to operating trends. Overall, near-term growth momentum appears favorable, with balanced contributions from volume and margin.

Financial Health

Total assets are ¥23,303m and equity is ¥11,884m, implying an equity ratio of roughly 51% despite the disclosed 0.0% field (unreported). Total liabilities are ¥9,067m, with current liabilities of ¥8,546m. Liquidity is solid: current ratio 154.5% and working capital ¥4,658m; quick ratio also shows 154.5% due to unreported inventories, effectively approximating current. Debt-to-equity is presented as 0.76x, but with interest expense at only ¥18m and coverage of 128.6x, interest-bearing debt likely remains modest relative to cash flows. Solvency appears strong with low financial risk and significant equity buffer. Ordinary income comfortably exceeds interest cost, and cash generation further improves balance sheet resilience. While cash and equivalents are unreported, net cash inflow for the period was positive (OCF ¥3,848m less investing ¥1,202m and financing ¥329m equates to +¥2,317m). Overall, the company exhibits healthy liquidity and conservative leverage.

Cash Flow Quality

Operating cash flow of ¥3,848m is 1.99x net income (¥1,935m), indicating strong cash conversion. Free cash flow of ¥2,646m after ¥1,202m investing outflows demonstrates ample capacity to fund reinvestment and potential distributions. The gap between OCF and NI likely reflects favorable working capital movements (e.g., receivable collections or advances) and solid underlying earnings; detailed working capital components are not disclosed here. Depreciation of ¥583m versus EBITDA of ¥2,898m points to robust cash earnings. Financing cash outflows of ¥329m suggest modest net repayment or distributions; specifics are not provided. Cash and equivalents are unreported, but the period’s net cash change was positive at approximately ¥2,317m. Earnings quality appears high given the strong OCF/NI ratio, though sustainability of working capital tailwinds should be monitored.

Dividend Sustainability

Dividend data are unreported in this dataset (DPS 0.00 and payout 0.0% reflect lack of disclosure rather than actual zeros). If a dividend were considered, coverage by both earnings (NI ¥1,935m) and FCF (¥2,646m) would be ample in this period. With low interest burden and strong liquidity, financial capacity for distributions exists; however, capital allocation priorities (growth investments, potential M&A, or balance sheet reinforcement) are not specified. Policy outlook cannot be inferred from the provided data. Monitoring board guidance, historical payout norms, and medium-term plan targets will be essential to assess dividend trajectory once disclosed.

Risk Assessment

Business Risks:

• Cyclical demand tied to automotive, electronics, and industrial capex for testing/vibration systems
• Order backlog and book-to-bill volatility affecting revenue visibility
• Project execution risks on large systems (lead times, customization, acceptance timing)
• Supply chain constraints and component availability impacting delivery schedules and costs
• Pricing pressure from global competitors in test and measurement markets
• FX volatility affecting export competitiveness and non-operating income
• Warranty and service cost risks post-installation
• R&D intensity required to maintain technological leadership

Financial Risks:

• Potential normalization of non-operating gains reducing ordinary income
• Working capital reversals that could lower OCF versus FY2025
• Exposure to tax rate normalization given period-specific items and JGAAP classifications
• Concentration of receivables in large projects increasing collection risk
• Capex timing mismatches versus cash generation if growth accelerates

Key Concerns:

• Sustainability of OCF/NI at 1.99x if working capital tailwinds fade
• Dependence on non-operating items (ordinary income > operating income by ¥254m)
• Lack of disclosed inventories and cash balances limiting visibility into liquidity quality
• Potential margin pressure if input costs or competitive pricing intensify

Investment Implications

Key Takeaways:

• Strong top-line growth (+17% YoY) with faster operating income growth (+25.3%) indicates positive operating leverage
• Healthy profitability: gross margin 32.2%, operating margin ~12.9%, EBITDA margin 16.2%
• ROE of 16.28% underpinned by double-digit net margin and moderate leverage
• Robust cash generation: OCF ¥3,848m and FCF ¥2,646m; net cash inflow ~¥2,317m
• Solid balance sheet with implied equity ratio ~51% and very high interest coverage (128.6x)
• Non-operating income contributed meaningfully (ordinary > operating by ¥254m); sustainability to be monitored
• Liquidity sound with current ratio 154.5% and working capital ¥4,658m
• Dividend data unreported; capacity exists but policy unclear

Metrics to Watch:

• Order intake, backlog, and book-to-bill ratio
• Gross margin trajectory and cost pass-through
• OCF/Net income ratio and working capital movements (receivables, advances)
• Capex versus depreciation; FCF sustainability
• Ordinary versus operating income mix (FX and other non-operating items)
• Interest-bearing debt level and net cash position once disclosed
• Effective tax rate normalization and its impact on net income
• ROIC trends relative to WACC

Relative Positioning: Within capital goods/test and measurement peers, IMV’s FY2025 profile shows above-average cash conversion, solid double-digit ROE, and conservative leverage, positioning it favorably on balance sheet strength and earnings quality, albeit with some reliance on non-operating income and working capital tailwinds.

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