INFORICH INC. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥10.00B
• Operating Income: ¥1.09B
• Net Income: ¥900M
• EPS: ¥76.85

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

INFORICH reported solid top-line growth in FY2025 Q3, with revenue of ¥9,997 million, up 33.8% year over year, indicating healthy demand and/or successful network expansion. Despite the strong revenue growth, operating income declined 2.3% YoY to ¥1,087 million, suggesting margin compression due to higher operating expenses, growth investments, or inflationary pressures. Net income fell 16.6% YoY to ¥745 million, reflecting higher non-operating costs and an unusually low recorded tax expense in the period. Gross profit was ¥5,772 million, implying a robust gross margin of 57.7%, which remains a key strength of the model. The operating margin of approximately 10.9% (operating income to revenue) indicates that SG&A and other operating costs absorbed more of the gross profit than last year. Ordinary income of ¥929 million sits below operating income by ¥158 million, implying non-operating net expenses; within this, interest expense was ¥95.9 million and other non-operating items were likely net negative. Interest coverage remains comfortable at 11.3x (operating income divided by interest expense), though the rising interest burden is notable. DuPont decomposition shows a net profit margin of 7.45%, asset turnover of 0.487x, and financial leverage of 3.14x, yielding an ROE of 11.39%, in line with the reported figure. The balance sheet shows total assets of ¥20,523 million and total liabilities of ¥13,561 million, resulting in equity of ¥6,538 million; leverage (liabilities/equity) stands at 2.07x. Liquidity is tight, with current assets of ¥10,526 million versus current liabilities of ¥10,663 million, translating to a current ratio of 98.7% and working capital of approximately -¥137 million. Inventories are small at ¥73 million, consistent with a service model where working capital is driven more by receivables and payables than stock. The effective tax rate is reported as 0.0% due to the recorded tax charge of ¥6.8 million against substantial pre-tax profit; this appears unusually low and may reflect tax loss carryforwards or timing differences rather than a sustainable rate. Cash flow data (operating, investing, financing, and cash balances) are not disclosed in this dataset, limiting assessment of earnings-to-cash conversion and capex intensity. Dividend data are also not disclosed; the reported DPS and payout ratio of 0.00 likely indicate nondisclosure in the feed rather than an explicit zero. Overall, the company shows strong revenue momentum and healthy gross margins but faces pressure at the operating and net levels due to higher operating costs and non-operating expenses. Leverage is meaningful, and liquidity is marginally below 1.0x, highlighting the importance of cash flow discipline and refinancing visibility. The outlook hinges on sustaining utilization and unit economics, managing operating costs, and normalizing the tax rate without eroding net profitability.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 7.45%
• asset_turnover: 0.487x
• financial_leverage: 3.14x
• calculated_ROE: 11.39%
• commentary: ROE is driven primarily by moderate leverage and a mid-single-digit net margin, with below-1.0x asset turnover reflecting a capital-intensive network relative to current scale. margin_quality: Gross margin of 57.7% underscores favorable unit economics at the gross level. However, operating margin (~10.9%) is under pressure as operating expenses grew faster than gross profit, resulting in a 2.3% YoY decline in operating income despite 33.8% revenue growth. Net margin fell to 7.45%, impacted by higher non-operating costs and an unusually low tax charge that may not be sustainable. operating_leverage: Revenue growth (+33.8% YoY) did not translate to operating income growth (-2.3% YoY), indicating negative operating leverage this period. This suggests increased SG&A (e.g., sales force expansion, partnerships, platform, and maintenance costs) or higher network-related expenses tied to scale and utilization.

Growth Assessment

revenue_sustainability: Top-line expansion to ¥9,997 million (+33.8% YoY) is strong and likely reflects increased installed base and higher utilization. The small inventory balance suggests growth is not inventory-driven but rather service deployment and usage-led. profit_quality: Operating income contraction and higher non-operating burdens point to mixed profit quality. The recorded tax expense of ¥6.8 million against robust pre-tax earnings depresses the effective tax rate to near zero, which is likely a timing or NOL effect and not indicative of steady-state profitability. outlook: Sustaining growth will depend on utilization per unit, pricing, and partner footprint expansion while scaling opex more efficiently. Margin improvement requires cost discipline and potentially monetization enhancements; normalization of the tax rate could modestly pressure net margins absent further operating gains.

Financial Health

liquidity: Current assets ¥10,526 million vs. current liabilities ¥10,663 million yields a current ratio of 98.7% and quick ratio of 98.0%, indicating tight short-term liquidity and working capital of about -¥137 million. solvency: Total liabilities ¥13,561 million and equity ¥6,538 million imply a liabilities-to-equity ratio of 2.07x and financial leverage (assets/equity) of ~3.14x. Interest coverage is solid at 11.3x, but rising interest costs could narrow coverage if operating income weakens. capital_structure: The balance sheet is moderately leveraged relative to earnings. With cash and interest-bearing debt not disclosed here, the mix between short-term and long-term borrowings cannot be verified, but current liabilities dominance suggests some short-term funding reliance.

Cash Flow Quality

earnings_quality: Operating CF is not disclosed; thus OCF/Net Income appears as 0.00 in the feed and should not be interpreted as zero cash generation. Depreciation and amortization are also undisclosed, limiting assessment of non-cash components in earnings. FCF_analysis: Free cash flow is not available due to missing OCF and capex data. Given the physical network nature of the business, capex and maintenance spend are likely material to FCF conversion and should be monitored. working_capital: Working capital is slightly negative (-¥137 million), consistent with a current ratio just below 1. Inventory is minimal (¥73 million), suggesting receivables and payables are the key drivers; without cash flow detail, the direction and sustainability of working capital changes are unclear.

Dividend Sustainability

payout_ratio_assessment: EPS is ¥76.85, but payout ratio data are not disclosed; the 0.0% value in the feed should be treated as nondisclosure. With leverage and growth investments, retained earnings likely remain a priority. FCF_coverage: FCF is not disclosed, preventing an assessment of dividend coverage by free cash flow. policy_outlook: No dividend policy information is available in this dataset. Any future distributions would depend on cash generation, capex needs for network expansion, and leverage considerations.

Risk Assessment

Business Risks:

• Demand volatility for shared device/network services affecting utilization and ARPU
• Execution risk in scaling network infrastructure and maintaining uptime
• Partner concentration and contract renewal risk with retail/location partners
• Competitive intensity in mobile battery sharing and adjacent sharing services
• Regulatory and compliance changes affecting device placement and operations
• Technology obsolescence and replacement cycle risk for deployed hardware

Financial Risks:

• Tight liquidity with current ratio of 98.7% and negative working capital (~¥137 million)
• Meaningful leverage (liabilities/equity 2.07x) and exposure to interest rate increases
• Potential refinancing risk if short-term funding is significant (maturity profile undisclosed)
• Tax normalization risk given an unusually low recorded tax charge in the period
• Cash flow visibility limited due to undisclosed OCF and capex

Key Concerns:

• Operating leverage turned negative this period despite strong revenue growth
• Non-operating expense drag (ordinary income below operating income by ¥158 million)
• Sustainability of near-zero effective tax rate is questionable and could pressure net margins
• Lack of disclosed cash flow data impedes assessment of earnings-to-cash conversion and FCF

Investment Implications

Key Takeaways:

• Revenue growth robust at +33.8% YoY to ¥9,997 million, indicating strong demand and network expansion
• Gross margin remains high at 57.7%, but operating margin compressed leading to -2.3% YoY OI
• Net income down 16.6% YoY to ¥745 million due to non-operating costs and low tax charge timing
• ROE at 11.39% driven by moderate net margin, sub-1x asset turnover, and leverage
• Liquidity tight with current ratio 98.7% and slightly negative working capital
• Interest coverage comfortable at 11.3x, but interest expense of ¥95.9 million is rising in visibility
• Cash flow and dividend data not disclosed, constraining FCF and payout analysis

Metrics to Watch:

• Operating cash flow and free cash flow conversion versus net income
• Capex levels and payback/ROI per installed unit
• Utilization per station, ARPU, and churn/retention metrics
• SG&A growth versus revenue to assess operating leverage normalization
• Net debt, interest rate, and maturity profile; interest coverage trend
• Effective tax rate trajectory and any disclosure on NOLs or tax credits
• Receivables and payables days to monitor working capital pressure

Relative Positioning: Within TSE Growth-oriented service and sharing-economy peers, INFORICH exhibits strong top-line growth and high gross margins but operates with tighter liquidity and higher leverage than asset-light software peers; profitability durability will hinge on scaling utilization while controlling operating costs and maintaining access to funding.

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