D I System Co Ltd

D I System Co Ltd maintains a strong liquidity position, with cash and equivalents amounting to ¥1,048,778,000, representing 36.9% of total assets. The company's liquidity FPT (free cash flow to total liabilities) is robust, and its current ratio of 1.71 indicates a solid ability to meet short-term obligations. The price-to-book ratio of 1.94 and price-to-tangible-book ratio of 1.94 suggest that the company is valued at a moderate premium to its book value, consistent with the software industry's typical valuation multiples.

Profitability metrics show a return on equity (ROE) of 6.35% and a return on assets (ROA) of 3.01%, which are below the industry median for software firms. The company's operating margin of 7.58% (¥126,988,000 operating income on ¥1,675,741,000 revenue) is also below the median for its industry, indicating room for improvement in cost management or pricing power. Gross margin of 22.76% (¥381,387,000 gross profit on ¥1,675,741,000 revenue) is in line with the industry average, but the company could benefit from optimizing its cost structure to improve net margins.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification. This lack of diversification increases exposure to regional economic shifts and regulatory changes. The absence of segment or geographic breakdown in the financials suggests a need for further transparency in the company's reporting.

Looking ahead, the company is projected to grow revenue by 0% in the current fiscal year and 0% in the next fiscal year, based on analyst estimates and historical performance. This flat growth trajectory is below the industry median for software firms, which typically exhibit higher growth rates due to recurring revenue models and digital transformation tailwinds. The company's capital expenditure of -¥41,308,000 indicates a net cash inflow from investing activities, suggesting a conservative approach to reinvestment.

Risk factors for D I System Co Ltd are currently low, with no immediate liquidity or dilution flags detected. The company's debt-to-equity ratio of 0.07 is well below the industry median, and its low leverage position reduces financial risk. However, the absence of disclosed dilution sources or recent equity issuance does not preclude the possibility of future dilution, particularly if the company pursues growth through acquisitions or capital raises.

Recent events, including filings and transcripts, have not revealed any material changes in the company's operations or strategy. The company's last actual EPS of ¥88.12 and revenue of ¥7,222,980,000 align with its most recent financial reporting, indicating stable performance in the short term.

Revenue grew at an 11.6% CAGR over four years, demonstrating consistent top-line expansion for the software company.

Net income expanded at a 14.5% CAGR over four years, indicating strong profitability growth alongside revenue increases.

The company holds zero long-term debt in fiscal 2025, providing a strong balance sheet with minimal leverage risk.

Revenue growth slowed to 5.7% year-over-year in fiscal 2025, suggesting decelerating momentum compared to prior periods.

Net income growth decelerated to 6.0% year-over-year in fiscal 2025, indicating slowing profitability expansion rates.

Operating income growth slowed to 3.7% year-over-year in fiscal 2025, showing weakening core business profitability trends.

Debt-to-equity ratio of 0.07 is below the software cohort median of 0.05, though still indicating higher leverage than average.

Revenue ¥1.77B, +6,2% YoY; Operating income −47,5% YoY.

• ▍Revenue ¥1.77B, +6,2% YoY
• ▍Operating income −47,5% YoY
• ▍Net income −49,6% YoY
• ▍Net margin 1.8%

Revenue ¥1.84B, +8,0% YoY; Operating income +44,5% YoY.

• ▍Revenue ¥1.84B, +8,0% YoY
• ▍Operating income +44,5% YoY
• ▍Net income +35,2% YoY
• ▍Net margin 4.3%

Revenue ¥1.99B, +8,8% YoY; Operating income −5,9% YoY.

• ▍Revenue ¥1.99B, +8,8% YoY
• ▍Operating income −5,9% YoY
• ▍Net income −7,8% YoY
• ▍Net margin 1.4%

Revenue ¥1.73B, +3,3% YoY; Operating income −3,7% YoY.

• ▍Revenue ¥1.73B, +3,3% YoY
• ▍Operating income −3,7% YoY
• ▍Net income +0,7% YoY
• ▍Net margin 5.0%

Revenue ¥1.66B; Operating income ¥92.8M.

• ▍Revenue ¥1.66B
• ▍Operating income ¥92.8M
• ▍Net margin 3.7%

Revenue ¥1.70B; Operating income ¥63.5M.

• ▍Revenue ¥1.70B
• ▍Operating income ¥63.5M
• ▍Net margin 3.5%

Revenue ¥1.83B; Operating income ¥53.4M.

• ▍Revenue ¥1.83B
• ▍Operating income ¥53.4M
• ▍Net margin 1.7%

Revenue ¥1.68B; Operating income ¥127.0M.

• ▍Revenue ¥1.68B
• ▍Operating income ¥127.0M
• ▍Net margin 5.1%

Revenue ¥7.22B, +5,7% YoY; Operating income +3,7% YoY.

• ▍Revenue ¥7.22B, +5,7% YoY
• ▍Operating income +3,7% YoY
• ▍Net income +6,0% YoY
• ▍Free cash flow −63,4% YoY
• ▍Net margin 3.5%

Revenue ¥6.83B, +9,5% YoY; Operating income +1,0% YoY.

• ▍Revenue ¥6.83B, +9,5% YoY
• ▍Operating income +1,0% YoY
• ▍Net income +0,3% YoY
• ▍Free cash flow −26,6% YoY
• ▍Net margin 3.5%

Revenue ¥6.24B, +13,5% YoY; Operating income +18,9% YoY.

• ▍Revenue ¥6.24B, +13,5% YoY
• ▍Operating income +18,9% YoY
• ▍Net income +23,6% YoY
• ▍Free cash flow +23,9% YoY
• ▍Net margin 3.9%

Revenue ¥5.50B, +18,1% YoY; Operating income +39,9% YoY.

• ▍Revenue ¥5.50B, +18,1% YoY
• ▍Operating income +39,9% YoY
• ▍Net income +30,6% YoY
• ▍Free cash flow +56,7% YoY
• ▍Net margin 3.5%