CRI Middleware Co Ltd

CRI Middleware maintains a strong liquidity position, with cash and equivalents amounting to ¥36.1 billion, significantly exceeding its total liabilities of ¥16.5 billion, resulting in a current ratio of 10.04. The company's debt-to-equity ratio is 0.28, indicating a conservative capital structure with limited leverage. The operating cash flow of ¥259 million supports its operational flexibility and capacity to fund growth initiatives without external financing.

The company's profitability metrics show a return on equity (ROE) of 3.56% and a return on assets (ROA) of 2.44%. These figures are below the industry median for IT Services & Consulting, which typically sees ROE and ROA in the 5-7% and 3-5% ranges, respectively. The operating margin of 18.03% (¥149.1 million operating income on ¥826.6 million revenue) is in line with the industry average, but the net margin of 15.46% (¥127.7 million net income) suggests effective cost control.

CRI Middleware's revenue is concentrated in its core IT consulting and services segment, with no disclosed geographic breakdown in the latest financials. The company's exposure to a single business line increases its vulnerability to sector-specific downturns, though its diversified client base across industries mitigates some of this risk.

Looking ahead, the company is projected to grow revenue by approximately 17.7% in the current fiscal year, based on the mean analyst estimate of ¥4 billion compared to the actual ¥3.45 billion. This growth is expected to continue into the next fiscal year, with analysts forecasting a similar trajectory. The company's capital expenditure of -¥66.1 million indicates a net cash inflow from investing activities, suggesting a focus on optimizing existing assets rather than large-scale expansion.

The risk assessment indicates low liquidity and dilution risks, with no immediate filing-based flags detected. The company's low debt levels and strong cash reserves reduce the likelihood of near-term dilution, and the absence of recent equity issuance or shelf registration filings supports this assessment. The company's conservative financial policies and strong cash position provide a buffer against economic volatility.

Recent filings and transcripts do not highlight any material events or strategic shifts that would significantly alter the company's trajectory. The company's performance has been in line with analyst expectations, with the last actual EPS of ¥80.51 compared to the mean estimate of ¥86.10. This suggests a stable and predictable earnings pattern, which is favorable for long-term investors.

Operating income surged 51.0% year-over-year to JPY 554.4 million in FY2025, demonstrating strong top-line and bottom-line momentum.

Free cash flow expanded 65.7% to JPY 433.3 million in FY2025, indicating robust cash generation capabilities relative to peers.

Net income grew at a 20.5% CAGR over four years, reaching JPY 420.7 million in FY2025, showing consistent earnings expansion.

Cash conversion ratio of 2.03 is above the cohort median of 1.0, reflecting high quality of reported earnings.

Return on equity of 3.6% trails the IT Services cohort median of 4.3%, suggesting less efficient use of shareholder capital.

Debt-to-equity ratio of 0.28 is higher than the cohort median of 0.12, indicating relatively higher leverage compared to peers.

Revenue growth of 8.9% in FY2025 is modest, with a four-year CAGR of only 4.5%, limiting top-line expansion potential.

Gross profit declined slightly in FY2024 before recovering in FY2025, showing some volatility in core production margins.

Return on assets of 2.4% remains low, indicating limited efficiency in generating profits from total asset base.

Revenue ¥803.1M, −6,8% YoY; Operating income −77,0% YoY.

• ▍Revenue ¥803.1M, −6,8% YoY
• ▍Operating income −77,0% YoY
• ▍Net income −74,3% YoY
• ▍Net margin 3.3%

Revenue ¥836.7M, −10,0% YoY; Operating income −51,5% YoY.

• ▍Revenue ¥836.7M, −10,0% YoY
• ▍Operating income −51,5% YoY
• ▍Net income −32,0% YoY
• ▍Net margin 11.1%

Revenue ¥756.0M, +2,5% YoY; Operating income +2 117,4% YoY.

• ▍Revenue ¥756.0M, +2,5% YoY
• ▍Operating income +2 117,4% YoY
• ▍Net income +267,8% YoY
• ▍Net margin 7.4%

Revenue ¥994.0M, +20,3% YoY; Operating income +68,5% YoY.

• ▍Revenue ¥994.0M, +20,3% YoY
• ▍Operating income +68,5% YoY
• ▍Net income +32,9% YoY
• ▍Net margin 17.1%

Revenue ¥861.9M; Operating income ¥136.2M.

• ▍Revenue ¥861.9M
• ▍Operating income ¥136.2M
• ▍Net margin 11.8%

Revenue ¥929.8M; Operating income ¥178.3M.

• ▍Revenue ¥929.8M
• ▍Operating income ¥178.3M
• ▍Net margin 14.7%

Revenue ¥737.9M; Operating income ¥3.6M.

• ▍Revenue ¥737.9M
• ▍Operating income ¥3.6M
• ▍Net margin 2.1%

Revenue ¥826.6M; Operating income ¥149.1M.

• ▍Revenue ¥826.6M
• ▍Operating income ¥149.1M
• ▍Net margin 15.5%

Revenue ¥3.45B, +8,9% YoY; Operating income +51,0% YoY.

• ▍Revenue ¥3.45B, +8,9% YoY
• ▍Operating income +51,0% YoY
• ▍Net income +38,2% YoY
• ▍Free cash flow +65,7% YoY
• ▍Net margin 12.2%

Revenue ¥3.17B, +5,9% YoY; Operating income +39,0% YoY.

• ▍Revenue ¥3.17B, +5,9% YoY
• ▍Operating income +39,0% YoY
• ▍Net income +30,9% YoY
• ▍Free cash flow +36,3% YoY
• ▍Net margin 9.6%

Revenue ¥2.99B, +5,3% YoY; Operating income +174,2% YoY.

• ▍Revenue ¥2.99B, +5,3% YoY
• ▍Operating income +174,2% YoY
• ▍Net income +168,5% YoY
• ▍Free cash flow +126,4% YoY
• ▍Net margin 7.8%

Revenue ¥2.84B, −1,8% YoY; Operating income −248,5% YoY.

• ▍Revenue ¥2.84B, −1,8% YoY
• ▍Operating income −248,5% YoY
• ▍Net income −270,1% YoY
• ▍Free cash flow −596,1% YoY
• ▍Net margin -12.0%