Flect Co Ltd

Flect Co Ltd maintains a strong liquidity position, with cash and equivalents amounting to ¥1.58 billion, representing 39.3% of total assets. The company's liquidity FPT score is high, supported by a current ratio of 2.4 and a debt-to-equity ratio of 0.29, indicating a conservative capital structure. The price-to-book ratio of 2.96 suggests the market values the company at a premium to its book value, while the price-to-tangible-book ratio is identical, indicating no significant intangible assets.

Profitability metrics show a return on equity (ROE) of 3.67% and a return on assets (ROA) of 1.82%, both below the industry median for software firms. The net income of ¥72.94 million is relatively modest compared to revenue of ¥2.00 billion, yielding a net margin of 3.64%. This margin is below the industry median, suggesting room for improvement in cost control or pricing power.

Geographically and segment-wise, Flect's revenue concentration is not disclosed in the available data. The absence of segment or geographic breakdown limits the ability to assess exposure to specific markets or product lines. However, the company's primary business activity is software, which is typically less sensitive to geographic volatility compared to hardware or services.

Looking ahead, Flect's revenue is projected to grow from ¥2.00 billion in the current fiscal year to ¥8.25 billion in the next, according to analyst estimates. This represents a significant year-over-year increase of 312.5%. However, the company's operating income of ¥214.15 million and net income of ¥72.94 million suggest that profitability may not scale proportionally with revenue, potentially due to higher operating costs or increased investment in growth initiatives.

Risk factors for Flect include low liquidity and dilution risk, with no immediate filing-based flags detected. The company's diluted shares outstanding are equal to basic shares, indicating no near-term dilution pressure. However, the high price-to-earnings ratio of 80.56 suggests the market is pricing in significant future growth, which may not materialize as expected.

Recent events include the latest financial filing, which shows a revenue of ¥2.00 billion and a net income of ¥72.94 million. Analysts have raised their revenue estimates for the next fiscal year, projecting ¥8.25 billion, which is a substantial increase from the actual ¥7.95 billion in the previous period. The company's capital expenditure of -¥136.02 million indicates a reduction in capital spending, which may be a strategic move to preserve cash or reinvest in more profitable areas.

Flect Co generated 7.95 billion JPY in revenue for fiscal year 2025, demonstrating strong top-line growth.

Net income surged to 720.8 million JPY in fiscal 2025, reflecting significant profitability expansion.

Free cash flow improved to 717.2 million JPY in fiscal 2025, indicating robust cash generation capabilities.

The company maintains a low debt-to-equity ratio of 0.29, suggesting a conservative capital structure.

Net income collapsed to a 194.9 million JPY loss in the latest period, reversing prior profitability.

Free cash flow turned negative at -178.5 million JPY in the latest period, indicating cash burn.

The four-year revenue CAGR is negative 8.4%, highlighting a long-term declining trend in sales.

Return on equity of 3.7% lags significantly behind Microsoft's 23.7%, indicating lower capital efficiency.

Revenue ¥2.15B, +4,1% YoY; Operating income +9,6% YoY.

• ▍Revenue ¥2.15B, +4,1% YoY
• ▍Operating income +9,6% YoY
• ▍Net income +6,8% YoY
• ▍Net margin 10.4%

Revenue ¥2.00B, +0,0% YoY; Operating income +17,8% YoY.

• ▍Revenue ¥2.00B, +0,0% YoY
• ▍Operating income +17,8% YoY
• ▍Net income +18,7% YoY
• ▍Net margin 8.9%

Revenue ¥1.81B, −5,0% YoY; Operating income −34,6% YoY.

• ▍Revenue ¥1.81B, −5,0% YoY
• ▍Operating income −34,6% YoY
• ▍Net income −32,8% YoY
• ▍Net margin 4.0%

Revenue ¥1.97B, −1,7% YoY; Operating income +45,1% YoY.

• ▍Revenue ¥1.97B, −1,7% YoY
• ▍Operating income +45,1% YoY
• ▍Net income +247,3% YoY
• ▍Net margin 12.9%

Revenue ¥2.07B; Operating income ¥343.3M.

• ▍Revenue ¥2.07B
• ▍Operating income ¥343.3M
• ▍Net margin 10.1%

Revenue ¥2.00B; Operating income ¥251.5M.

• ▍Revenue ¥2.00B
• ▍Operating income ¥251.5M
• ▍Net margin 7.5%

Revenue ¥1.90B; Operating income ¥180.2M.

• ▍Revenue ¥1.90B
• ▍Operating income ¥180.2M
• ▍Net margin 5.6%

Revenue ¥2.00B; Operating income ¥214.2M.

• ▍Revenue ¥2.00B
• ▍Operating income ¥214.2M
• ▍Net margin 3.6%

Revenue ¥7.95B, +14,7% YoY; Operating income +43,5% YoY.

• ▍Revenue ¥7.95B, +14,7% YoY
• ▍Operating income +43,5% YoY
• ▍Net income +63,6% YoY
• ▍Free cash flow +71,5% YoY
• ▍Net margin 9.1%

Revenue ¥6.93B, +30,6% YoY; Operating income +193,3% YoY.

• ▍Revenue ¥6.93B, +30,6% YoY
• ▍Operating income +193,3% YoY
• ▍Net income +98,0% YoY
• ▍Free cash flow +152,9% YoY
• ▍Net margin 6.4%

Revenue ¥5.31B, +45,7% YoY; Operating income +0,9% YoY.

• ▍Revenue ¥5.31B, +45,7% YoY
• ▍Operating income +0,9% YoY
• ▍Net income −16,5% YoY
• ▍Free cash flow −40,1% YoY
• ▍Net margin 4.2%

Revenue ¥3.64B, +42,3% YoY; Operating income +233,0% YoY.

• ▍Revenue ¥3.64B, +42,3% YoY
• ▍Operating income +233,0% YoY
• ▍Net income +236,7% YoY
• ▍Free cash flow +254,8% YoY
• ▍Net margin 7.3%