Business Coach Inc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥2.00B
• Operating Income: ¥163M
• Net Income: ¥33M
• EPS: ¥111.53

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

Business Coach Co., Ltd. delivered a strong FY2025 Q4 (JGAAP, consolidated) finish with clear evidence of operating leverage and improving profitability amid robust topline growth. Revenue rose 25.2% YoY to ¥2,003m, supported by a high gross margin of 48.6%, indicating solid value-add in a predominantly service-based model with negligible inventory. Operating income surged 105.1% YoY to ¥163m, expanding the operating margin to roughly 8.1%, while ordinary income reached ¥178m and net income ¥123m (+127.7% YoY), translating to a net margin of 6.14%. DuPont analysis shows healthy profitability: ROE of 15.95% is driven by a 6.14% net margin, high asset turnover of 1.999x, and modest financial leverage of 1.30x. Implied equity ratio is approximately 76.9% (equity ¥771m / assets ¥1,002m), despite the reported “0.0%” equity ratio field (treated as undisclosed). Liquidity appears strong with a current ratio of 224.5% and no inventories, consistent with the company’s service orientation. Solvency risk is low: debt-to-equity (using total liabilities/equity) is 0.70x, interest expense is minimal at ¥0.8m, and interest coverage is a very robust ~214x. Cash generation is positive but trailed accounting profits; operating cash flow was ¥91m, 0.74x of net income, likely reflecting working capital investment tied to growth. Free cash flow was ¥111m (OCF plus positive investing CF of ¥20m), and financing cash flow was an outflow of ¥69m, likely related to repayments or other financing activities. Depreciation and amortization were modest at ¥27m, and EBITDA was ¥190m (9.5% margin), indicating a relatively light asset base. The company paid no dividend (DPS ¥0, payout ratio 0%), preserving balance sheet flexibility while growth investments and scale efficiencies continue. Reported EPS was ¥111.53; shares outstanding were not disclosed in the dataset provided. Key data limitations include missing cash and equivalents, equity ratio, effective tax rate, and share count in XBRL fields; zeros in these fields should be treated as undisclosed rather than actual zero values. Overall, the quarter underscores improving earnings quality through margin expansion and operating leverage, a conservative capital structure, and adequate liquidity to support further growth.

Profitability Analysis

roe_decomposition: ROE 15.95% = Net margin 6.14% × Asset turnover 1.999× × Financial leverage 1.30×. The improvement in operating income (+105.1% YoY) versus revenue (+25.2% YoY) signals stronger operating efficiency and cost control feeding into ROE. margin_quality: Gross margin 48.6% reflects strong service economics and low COGS intensity. Operating margin of ~8.1% shows meaningful expansion YoY. Net margin at 6.14% is healthy for a training/coaching services model, with low interest burden supporting ordinary income. operating_leverage: Revenue growth of 25.2% YoY vs. operating income growth of 105.1% YoY indicates high operating leverage as fixed costs are spread over a larger revenue base. EBITDA margin of 9.5% and modest D&A (¥27m) suggest further upside potential as scale increases.

Growth Assessment

revenue_sustainability: Topline expanded 25.2% YoY to ¥2,003m, implying healthy demand. The absence of inventory and high gross margin are consistent with scalable service offerings; sustainability will hinge on client retention, repeat programs, and pipeline visibility. profit_quality: Net income rose 127.7% YoY to ¥123m, with margins expanding through operating leverage. Ordinary income outpaced operating income, aided by minimal interest expense. Effective tax rate was not disclosed in ratio form, but income tax expense was ¥28m; net-to-pre-tax reconciliation suggests limited tax drag. outlook: With an implied equity ratio near 77% and strong liquidity, the company is positioned to continue investing in growth. Near-term earnings trajectory should remain supported by scale benefits and pricing power, contingent on stable corporate training/coaching demand and controlled SG&A growth.

Financial Health

liquidity: Current assets ¥779m vs. current liabilities ¥347m yields a current ratio of 224.5% and quick ratio of 224.5%, indicating ample short-term coverage. Cash and equivalents were undisclosed in the provided dataset. solvency: Total liabilities ¥540m vs. equity ¥771m implies liabilities-to-equity of 0.70x. Interest expense is only ¥0.8m with EBIT-based coverage of ~214x, suggesting very low financial risk. capital_structure: Implied equity ratio is ~76.9% (computed), reflecting a conservative balance sheet. Financial leverage in DuPont is 1.30×, consistent with low reliance on debt financing.

Cash Flow Quality

earnings_quality: Operating CF of ¥91m equals 0.74× net income (¥123m), indicating some working capital outflow or accrual effects amid rapid growth. The gap bears monitoring but is not unusual for expanding service businesses. fcf_analysis: Free cash flow was ¥111m, calculated as OCF (¥91m) plus positive investing CF (¥20m). D&A of ¥27m vs. EBITDA of ¥190m underscores a light capital intensity profile. working_capital: No inventory is reported (service model). The OCF/NI shortfall likely reflects receivables timing due to higher sales; detailed AR/AP movements were not disclosed.

Dividend Sustainability

payout_ratio_assessment: No dividend declared (DPS ¥0; payout ratio 0%). EPS was ¥111.53, but share count was not disclosed in the dataset provided. fcf_coverage: With FCF of ¥111m and no dividend outflow, coverage is ample. Future dividends would likely be well-covered if growth capex and working capital needs remain moderate. policy_outlook: Given robust balance sheet strength and positive FCF, the company retains flexibility to establish or increase shareholder returns over time. Near term, reinvestment to support growth and capability build-out may take precedence.

Risk Assessment

Business Risks:

• Demand cyclicality in corporate training/coaching budgets tied to macro conditions
• Client concentration or program concentration risks if large accounts drive revenue
• Execution risk in scaling delivery capacity without diluting service quality
• Pricing pressure from competitors and internal L&D alternatives at client companies
• Talent acquisition and retention for qualified coaches/trainers

Financial Risks:

• Working capital volatility from receivables as revenue scales
• Potential mismatch between accounting profit and cash conversion (OCF/NI 0.74×)
• Limited disclosure of cash balances and effective tax rate in the dataset
• Exposure to variable costs for external facilitators or subcontractors if mix shifts

Key Concerns:

• Sustainability of operating leverage as growth normalizes
• Cash conversion consistency amid expansion
• Visibility of bookings/backlog and client retention metrics (not disclosed)

Investment Implications

Key Takeaways:

• Revenue up 25.2% YoY with substantial operating leverage; operating income up 105.1% YoY
• ROE 15.95% supported by strong asset turnover (1.999×) and modest leverage (1.30×)
• High gross margin (48.6%) consistent with scalable service model
• Robust liquidity (current ratio 224.5%) and low financial risk (interest coverage ~214×)
• Positive FCF of ¥111m despite OCF/NI at 0.74×, indicating growth-related working capital needs
• No dividend currently; strong capacity to consider future shareholder returns if policy shifts

Metrics to Watch:

• Bookings, backlog, and client retention/expansion rates
• Receivables days and OCF/NI to track cash conversion
• SG&A ratio and operating margin to assess durability of operating leverage
• Headcount/capacity metrics and utilization for delivery scalability
• Pipeline composition and exposure to large accounts

Relative Positioning: Balance sheet conservatism and high gross margins position the company favorably versus typical service peers, with improving operating efficiency and ample liquidity supporting continued growth.

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