ibis inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥3.64B
• Operating Income: ¥847M
• Net Income: ¥566M
• EPS: ¥30.91

Income Statement

Balance Sheet

Profitability Ratios

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

For FY2025 Q3 (consolidated, JGAAP), Ibis Inc. (9343) delivered strong profitability with a high-margin profile and a conservative balance sheet, though cash flow disclosure is unavailable in the provided data. Revenue was ¥3,638 million, with gross profit of ¥2,199 million, implying a robust gross margin of 60.5%, consistent with a software/services-like model with low direct costs. Operating income was ¥847 million, translating to an operating margin of approximately 23.3%, indicating efficient cost management and healthy operating leverage. Ordinary income of ¥852 million is slightly above operating income, reflecting minimal non-operating drag and negligible interest expense of ¥0.352 million. Net income was ¥565 million, with a net margin of 15.5%, supporting strong bottom-line conversion. DuPont metrics imply ROE of 21.95%, driven by a solid net margin (15.5%), moderate asset turnover (1.05x), and modest financial leverage (assets/equity ~1.35x). Liquidity is strong: current assets of ¥2,642 million versus current liabilities of ¥817 million yield a current ratio of about 3.24x and quick ratio of roughly 3.23x, aided by minimal inventories. The capital structure is conservative with total liabilities of ¥889 million and total equity of ¥2,574 million, implying a debt-to-equity proxy of about 0.35x. Interest coverage is exceptionally high at ~2,406x using operating income/interest expense, highlighting minimal financial risk from borrowing costs. Based on income tax expense of ¥289 million versus ordinary income, the implied effective tax rate is roughly mid-30% (approx. 34%), even though the summary metric shows 0.0% (which likely reflects calculation/labeling limitations rather than economics). Working capital stands at ¥1,825 million, supporting ongoing operations and potential investment needs. Dividend per share (DPS) is indicated as ¥0.00, and payout ratio is shown as 0.0%, suggesting either no interim dividend or no disclosure in this period. Operating, investing, and financing cash flows are shown as zero, which indicates non-disclosure rather than true zero values; thus, cash flow-based assessments (OCF/NI, FCF, FCF coverage) cannot be reliably interpreted here. EPS is ¥30.91, but outstanding shares are not disclosed (listed as zero), so per-share equity metrics (e.g., BVPS) are not interpretable from the provided dataset. Overall, Ibis exhibits attractive profitability and returns with a sound balance sheet, though the lack of cash flow disclosure is a key limitation for assessing earnings quality and dividend capacity.

Profitability Analysis

ROE decomposition (DuPont): Net profit margin of 15.53% × Asset turnover of 1.05× × Financial leverage of 1.35× yields an ROE of 21.95%, consistent with the reported figure. Margins: gross margin is 60.5% (¥2,199m/¥3,638m), operating margin is ~23.3% (¥847m/¥3,638m), ordinary margin ~23.4% (¥852m/¥3,638m), and net margin 15.5% (¥565m/¥3,638m). Margin quality appears strong, supported by low cost of sales and contained operating costs; the small positive gap between ordinary and operating income indicates limited non-operating volatility. Operating leverage: with a high gross margin and strong operating margin, the model likely benefits from scale economics; however, YoY growth data are not disclosed (0.0% placeholders), limiting inference on incremental operating leverage in the period. Tax: using income tax expense of ¥289m versus ordinary income of ¥852m implies an effective tax rate around 34%; the displayed 0.0% rate is not economically representative. Interest burden is negligible given interest expense of ¥0.352m and interest coverage of ~2,406x using operating income. Depreciation and EBITDA are shown as zero (undisclosed), so EBITDA-based margin and coverage metrics are not meaningful here; EBIT approximates operating income under these disclosures.

Growth Assessment

Revenue shows +0.0% YoY in the summary, which indicates non-disclosure rather than actual zero growth; thus, trend analysis is constrained. Profit growth is likewise shown as +0.0% YoY for operating income and net income, again implying no YoY data provided. Despite the lack of growth data, the current period’s margin structure suggests resilient profitability that can support growth investments. Asset turnover at 1.05x indicates steady utilization of the asset base; any acceleration in revenue would likely drive incremental margin expansion due to operating leverage. Ordinary income slightly exceeding operating income suggests limited reliance on non-core items; thus, profit quality appears driven by core operations. Outlook considerations: sustainability depends on maintaining high gross margin, controlling SG&A, and preserving pricing or monetization power. Without disclosed OCF and capex, we cannot determine whether growth is consuming or generating cash. The small inventory balance points to a predominantly intangible/people/software-driven model, which typically scales well but can be sensitive to demand swings or platform dynamics. Near-term growth visibility would improve with disclosed backlog/ARR (if applicable), customer metrics, or active user trends; absent that, we infer stability from consistent profitability ratios in the period. We therefore characterize current growth sustainability as cautiously constructive but data-limited.

Financial Health

Liquidity is robust with a current ratio of ~3.24x (¥2,642m/¥817m) and quick ratio of ~3.23x due to negligible inventories (¥1.9m). Working capital stands at ¥1,825m, indicating ample short-term coverage for obligations and operating needs. Solvency appears strong with total liabilities of ¥889m versus equity of ¥2,574m, implying a liabilities-to-equity ratio of ~0.35x and financial leverage (assets/equity) of ~1.35x. Interest coverage is exceptionally high at ~2,406x (operating income/interest expense), highlighting minimal financing risk from interest rate changes. The equity ratio field shows 0.0%, but based on available figures, equity/total assets is approximately 74.3% (¥2,574m/¥3,464m), indicating a very solid capitalization; the 0.0% likely reflects non-disclosure in that metric field. Cash and equivalents are shown as zero (undisclosed), so we cannot assess absolute liquidity buffers; however, the magnitude of current assets versus current liabilities provides comfort. No information is provided on off-balance sheet commitments or lease liabilities, which could affect leverage if material. Overall, balance sheet strength is a positive, constrained by absent cash detail.

Cash Flow Quality

Operating CF, investing CF, and financing CF are shown as zero, indicating that cash flow statements were not provided in the dataset for this period. As such, OCF/Net Income of 0.00 and Free Cash Flow of 0 should not be interpreted as actual performance but as non-disclosure. Earnings quality cannot be validated via cash conversion this period; we cannot reconcile accruals, assess working capital releases/uses, or determine capex intensity. Depreciation & amortization are shown as zero (undisclosed), limiting our ability to parse non-cash components of operating income. Working capital on the balance sheet is healthy at ¥1,825m, but without cash flow detail we cannot tell whether net income was supported by collections or deferred revenues. Free cash flow coverage of dividends cannot be evaluated due to absent OCF and capex data. Going forward, disclosure of OCF, capex, and changes in receivables/payables would be key to assess sustainability of earnings and the capacity to self-fund growth.

Dividend Sustainability

The period indicates DPS of ¥0.00 and payout ratio of 0.0%, suggesting either no dividend declaration within the period or lack of disclosure regarding dividends. With net income of ¥565m and robust margins, the capacity to pay dividends appears supported by earnings; however, the absence of OCF and capex disclosure prevents assessment of free cash flow coverage. The stated FCF coverage of 0.00x is not meaningful given missing cash flow data. Balance sheet strength (equity ratio implied ~74% and low liabilities) supports potential distribution flexibility from a solvency standpoint, but cash availability and policy stance remain unknown. Without historical payout data or stated policy, we cannot infer a target payout ratio or stability of distributions. Monitoring future disclosures for year-end dividend proposals, cash balances, and OCF will be essential to evaluate sustainability.

Risk Assessment

Business Risks:

• Margin sensitivity to pricing, platform fees, or input cost inflation impacting high gross margins
• Demand volatility in core end-markets (e.g., software/services or digital content), potentially affecting revenue consistency
• Customer/user concentration or reliance on a limited number of channels/platforms
• Execution risk in scaling operations while maintaining cost discipline and service quality
• Talent retention and wage inflation pressures affecting SG&A and operating margin

Financial Risks:

• Limited transparency on cash generation due to non-disclosed cash flow statements in the period
• Potential off-balance sheet commitments (e.g., leases) not visible in the provided snapshot
• Currency exposure if revenues or costs are partially denominated in foreign currencies
• Tax rate variability (implied ~34%) impacting net margins

Key Concerns:

• Absence of operating and investing cash flow data impedes evaluation of earnings quality and FCF
• No disclosure of cash and equivalents; absolute liquidity cushion cannot be assessed
• YoY growth metrics indicated as 0.0% limit trend analysis and visibility
• Per-share metrics constrained by undisclosed share count and BVPS

Investment Implications

Key Takeaways:

• High profitability with gross margin 60.5%, operating margin ~23.3%, and net margin 15.5%
• ROE of 21.95% driven by solid margins, moderate asset turnover (1.05x), and modest leverage (1.35x)
• Strong liquidity (current ratio ~3.24x; working capital ¥1,825m) and conservative balance sheet (liabilities/equity ~0.35x)
• Interest burden is negligible with coverage ~2,406x
• Material data limitations on cash flows, depreciation, and growth YoY figures constrain assessment of cash conversion and trend durability

Metrics to Watch:

• Operating cash flow and free cash flow conversion versus net income
• Capex and any capitalization of development costs (if applicable)
• Revenue growth trajectory, including any disclosure of backlog/ARR or user metrics
• SG&A trends and operating margin sustainability
• Effective tax rate normalization and any one-off items
• Cash and equivalents balance and working capital movements

Relative Positioning: Within TSE peers in software/services, Ibis appears above average on profitability (high gross and operating margins) and ROE, with a conservative capital structure; however, relative assessment on cash generation and growth durability is limited by absent cash flow and YoY trend 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