VISION INC. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥28.91B
• Operating Income: ¥4.75B
• Net Income: ¥2.87B
• EPS: ¥64.78

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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), Vision (9416) delivered solid top- and bottom-line growth, with revenue of ¥28,913m (+10.7% YoY), operating income of ¥4,748m (+10.0% YoY), and net income of ¥3,178m (+10.8% YoY). Profitability remains robust: gross profit was ¥15,181.8m, translating to a gross margin of 52.5%, while operating margin was 16.4%. Ordinary income of ¥4,752m was essentially in line with operating income, indicating minimal non-operating distortions and very low financing drag. Net profit margin was 11.0% per the DuPont inputs, supporting strong overall returns. ROE calculated via DuPont at 16.0% reflects healthy profitability (11.0% NPM), moderate asset turnover (1.09x), and low financial leverage (1.34x). Liquidity and solvency indicators are strong: current ratio of 288%, working capital of ¥12,544.8m, total liabilities of ¥7,370.9m against equity of ¥19,876m. On a recalculated basis, the equity ratio is approximately 74.7% (equity/assets), despite an unreported equity ratio field. Interest expense was just ¥8.2m, yielding interest coverage of ~580x, underscoring negligible financial risk from debt service. The effective tax burden, inferred from disclosed income tax (¥1,471.8m) and net income, is roughly low-30s percent, consistent with domestic statutory ranges; the reported 0.0% in the metrics table appears to reflect an unreported field. Operating and free cash flow were not disclosed in this period, limiting direct assessment of cash conversion; EBITDA is also not disclosed. EPS was ¥64.78, while per-share balance sheet metrics and share count were not reported. No dividends were disclosed (DPS ¥0), so payout and FCF coverage metrics in the table are not meaningful for this period. Overall, the company shows strong earnings momentum, high margins, solid ROE, and a conservative balance sheet, though the absence of cash flow disclosure and per-share equity data constrains certain analyses. The YoY pattern of revenue and operating income implies disciplined cost control with modest operating leverage this quarter. With minimal interest burden and significant equity, the firm has ample financial flexibility for reinvestment or future shareholder returns, subject to cash flow realization. Data limitations (notably cash flow, depreciation/amortization, and share data) should be monitored in subsequent filings.

Profitability Analysis

• DuPont ROE decomposition: Net profit margin 11.0% x Asset turnover 1.086x x Financial leverage 1.34x = ROE ~16.0% (matches reported).
• Margin quality: Gross margin 52.5% (GP ¥15,181.8m on revenue ¥28,913m) indicates a high value-add model. Operating margin ~16.4% (OP ¥4,748m) suggests substantial operating efficiency after SG&A.
• Cost structure: Implied SG&A ~¥10,433.8m (GP – OP), or ~36.1% of revenue, indicating meaningful spend on sales, service delivery, and overhead but contained given growth.
• Operating leverage: Revenue +10.7% YoY vs operating income +10.0% YoY indicates slightly negative operating leverage in this quarter, possibly reflecting reinvestment or cost normalization alongside growth; nonetheless, profitability scales well.
• Non-operating items: Ordinary income ~ operating income; interest expense of ¥8.2m is de minimis, so core operations drive earnings.
• Taxation: Using income tax of ¥1,471.8m and net income of ¥3,178m implies a pre-tax income near ¥4,650m, suggesting an effective tax rate in the low-30% range (estimate ~31–32%), consistent with domestic norms.
• EBITDA: Not disclosed; depreciation/amortization unreported (0 indicates not disclosed), so EBITDA margin cannot be assessed.

Growth Assessment

• Revenue growth: +10.7% YoY to ¥28,913m indicates healthy demand and/or effective sales execution.
• Profit growth: Operating income +10.0% YoY and net income +10.8% YoY track closely with revenue, implying stable margin structure.
• Revenue sustainability: The combination of high gross margin and controlled SG&A suggests resilience, but sustainability will depend on continued customer acquisition/retention and pricing power; segment mix not disclosed.
• Profit quality: Ordinary income aligns with operating income, pointing to limited reliance on non-operating gains; interest burden is negligible.
• Outlook considerations: With strong liquidity and low leverage, the company has flexibility to support growth; near-term earnings trajectory appears supported by current margin profile. However, the lack of cash flow disclosure and segment details tempers visibility on sustainability.
• Data limitations: No guidance provided; cash flow and capex data unreported this quarter.

Financial Health

• Liquidity: Current assets ¥19,232.4m vs current liabilities ¥6,687.6m yields a current ratio of 287.6% and substantial working capital (¥12,544.8m); quick ratio equals current ratio due to unreported inventories.
• Solvency: Total liabilities ¥7,370.9m vs equity ¥19,876m imply a debt-to-equity ratio of ~0.37x and an equity ratio recalculated at ~74.7% (equity/assets).
• Interest coverage: ~580x (OP ¥4,748m / interest expense ¥8.2m) highlights negligible debt service risk.
• Capital structure: Conservative leverage and significant equity base provide cushion for volatility and capacity for investment.
• Balance sheet quality: Cash and equivalents not disclosed; inventories unreported. Nonetheless, the high equity buffer and low liabilities indicate strong solvency.

Cash Flow Quality

• Earnings-to-cash conversion: Operating cash flow was not disclosed; OCF/Net income ratio reported as 0.00 is not meaningful. We cannot directly evaluate accrual intensity this period.
• Free cash flow: Not disclosed; FCF reported as 0 reflects lack of data rather than actual cash generation. Capex and D&A are unreported, constraining assessment of maintenance vs growth spend.
• Working capital: Implied strong liquidity (current assets materially exceed current liabilities). Without cash flow statements, we cannot assess period-to-period working capital swings or cash conversion cycle.
• Inference: Stable margins and minimal non-operating noise suggest earnings quality is likely solid, but confirmation requires OCF disclosure in subsequent filings.

Dividend Sustainability

• Current dividends: DPS unreported/zero for the period; payout ratio shown as 0% is not informative given DPS disclosure.
• Capacity: With net income of ¥3,178m, low interest burden, and a strong equity base, the company appears to have capacity for shareholder returns, subject to actual cash generation and investment needs.
• FCF coverage: Not assessable this period due to lack of OCF and capex data.
• Policy outlook: No dividend policy details provided; future distributions will depend on disclosed cash flow, capex commitments, and management policy updates.

Risk Assessment

Business Risks:

• Revenue growth dependency on demand trends; potential cyclicality in core end-markets
• Margin sensitivity to changes in cost of sales and SG&A (customer acquisition, service delivery costs)
• Pricing pressure and competitive intensity in services/solutions markets
• Potential exposure to regulatory changes affecting service offerings (telecom/IT-related, if applicable)
• Execution risk in scaling operations while maintaining high gross margins

Financial Risks:

• Limited visibility on cash generation due to unreported operating and investing cash flows
• Potential working capital swings that could impact cash conversion despite strong reported liquidity
• Tax rate variability relative to assumed low-30% effective rate
• Concentration risks (customers or suppliers) not disclosed but typical for some service models

Key Concerns:

• Absence of cash flow disclosure (OCF/FCF) and capex/D&A details in the period
• Dividend policy and capital allocation intentions not articulated
• Slight negative operating leverage in the quarter despite growth, warranting monitoring of cost trends

Investment Implications

Key Takeaways:

• Steady growth with revenue +10.7% YoY and operating income +10.0% YoY
• High profitability: 52.5% gross margin and ~16.4% operating margin
• Strong ROE around 16% driven by solid margins and moderate asset turnover with low leverage
• Very low interest burden (coverage ~580x) and conservative capital structure (D/E ~0.37x)
• Robust liquidity (current ratio ~288%, working capital ~¥12.5bn)
• Cash flow data not disclosed; cannot validate earnings-to-cash conversion this period
• Dividend not disclosed; capacity appears available pending cash flow visibility

Metrics to Watch:

• Revenue growth rate and customer/segment mix (when disclosed)
• Gross and operating margin trajectory
• Operating cash flow, free cash flow, and capex
• Working capital metrics (receivables/payables days) and cash balance disclosure
• ROE drivers: asset turnover and financial leverage trends
• Effective tax rate normalization vs low-30% estimate

Relative Positioning: Based on disclosed figures, the company exhibits above-average ROE and margins with conservative leverage versus typical TSE-listed service peers, implying a quality-leaning profile contingent on confirmation of cash generation.

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