CRI Middleware Co., Ltd. (3698) AI Stock Analysis

• Market Cap: ¥5.35B
• Dividend Yield: 2.13%
• Average Volume (3M): 21.35K
• Price to Earnings (P/E): 14.8
• Beta (1Y): 0.83
• Revenue Growth: 8.88%
• EPS Growth: 38.16%
• Country: JP
• Employees: 170
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 5.00
• Shares Outstanding: 5,578,150
• 10 Day Avg. Volume: 18,390
• 30 Day Avg. Volume: 21,349
• PEG Ratio: 0.46
• Price to Book (P/B): 1.82
• Price to Sales (P/S): 2.15
• P/FCF Ratio: 8.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 86.1
• Revenue Forecast (FY): ¥3.90B

• Rating: 60 Neutral
• Price Target: ¥1,031.00 ▼(-6.10% Downside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is held back primarily by weak technicals (price below key moving averages and negative MACD), despite solid financial performance (improving profitability and low leverage) and supportive valuation (moderate P/E and ~2.55% dividend yield).

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for CRI Middleware's products, supporting long-term business expansion and market position.

Profitability

Enhanced profitability reflects efficient operations and cost management, contributing to sustainable financial health and competitive advantage.

Balance Sheet Health

A strong balance sheet with low leverage provides financial stability and flexibility for future investments and growth opportunities.

Negative Factors

Free Cash Flow Volatility

Volatile free cash flow can hinder the company's ability to fund operations and growth consistently, posing a risk to long-term financial stability.

Recent Revenue Decline

A recent decline in revenue could indicate emerging challenges in market demand or competition, requiring strategic adjustments to sustain growth.

Cash Flow Management

Effective cash flow management is crucial for operational efficiency and investment capacity, with volatility posing a risk to financial planning.

CRI Middleware Co., Ltd. Business Overview & Revenue Model

Company Description

CRI Middleware Co., Ltd. provides audio and video solutions for the gaming industry. The company offers ADX, an audio middleware, which empowers sound designers and audio programmers; and Sofdec, a multi-platform movie playback system, including a high-compression video encoder and a versatile playback engine. Its audio and video solutions can be integrated with game engines and supports platforms, from all major consoles to mobile devices. The company was founded in 1983 and is based in Tokyo, Japan.

How the Company Makes Money

CRI Middleware generates revenue primarily through the licensing of its middleware products to game developers and publishers. The company charges fees based on the usage or sales of its software, which can be structured as one-time payments, royalties, or subscription models. Additionally, CRI Middleware may engage in strategic partnerships with gaming companies to provide tailored solutions, which can also contribute to its earnings. The growth of the gaming industry, particularly in mobile and online gaming, has been a significant factor driving demand for CRI Middleware's products, thus influencing its revenue streams.

CRI Middleware Co., Ltd. Financial Statement Overview

Summary

Solid overall fundamentals: improved net profitability (from negative to healthy positive), stable EBIT/EBITDA margins, and low leverage. Key offsets are the most recent revenue decline and some free-cash-flow volatility.

Income Statement

CRI Middleware Co., Ltd. shows a strong gross profit margin and consistent revenue growth over the years, although there was a slight decline in the most recent year. The net profit margin has improved significantly from a negative position in 2022 to a healthy positive margin in 2025. The EBIT and EBITDA margins are stable, indicating efficient operations. However, the recent revenue decline is a concern that needs monitoring.

Balance Sheet

The company maintains a low debt-to-equity ratio, indicating prudent financial leverage. The return on equity has improved from negative to positive, reflecting better profitability. The equity ratio is stable, showing a strong equity base relative to total assets. However, the overall growth in stockholders' equity has been moderate.

Cash Flow

Operating cash flow has shown significant improvement, supporting net income well. The free cash flow has also grown, although it experienced a decline in some years. The operating cash flow to net income ratio is strong, indicating good cash generation relative to earnings. However, the volatility in free cash flow growth suggests potential cash flow management challenges.

Breakdown	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	3.45B	3.17B	2.99B	2.84B	2.89B
Gross Profit	2.07B	1.72B	1.73B	1.35B	1.46B
EBITDA	695.60M	522.10M	471.42M	235.87M	413.06M
Net Income	420.71M	304.47M	232.58M	-339.60M	199.70M
Balance Sheet
Total Assets	5.84B	5.36B	5.16B	5.02B	5.53B
Cash, Cash Equivalents and Short-Term Investments	4.24B	3.63B	3.49B	3.32B	3.89B
Total Debt	1.00B	1.00B	1.00B	1.00B	1.00B
Total Liabilities	1.74B	1.59B	1.61B	1.48B	1.57B
Stockholders Equity	4.06B	3.74B	3.52B	3.51B	3.94B
Cash Flow
Free Cash Flow	831.41M	215.63M	330.20M	-409.44M	355.61M
Operating Cash Flow	849.68M	328.33M	495.42M	23.32M	546.15M
Investing Cash Flow	-135.08M	-9.12M	-209.43M	-527.02M	-39.88M
Financing Cash Flow	-104.50M	-77.87M	-215.38M	-97.01M	32.07M

CRI Middleware Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1098.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3698, the sentiment is Negative. The current price of 1098 is above the 20-day moving average (MA) of 1005.65, above the 50-day MA of 1072.44, and below the 200-day MA of 1278.88, indicating a bearish trend. The MACD of -35.30 indicates Negative momentum. The RSI at 40.42 is Neutral, neither overbought nor oversold. The STOCH value of 65.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3698.

CRI Middleware Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4728	69 Neutral	¥4.93B	22.09	―	3.95%	43.78%	―
3904	66 Neutral	¥7.57B	11.02	―	0.75%	12.70%	2207.66%
3907	64 Neutral	¥1.88B	9.11	―	1.36%	2.33%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3698	60 Neutral	¥5.35B	14.84	―	2.13%	8.88%	38.16%
5240	43 Neutral	¥2.97B	-8.83	―	―	-18.37%	33.89%
3793	42 Neutral	¥11.88B	-6.01	―	―	93.85%	-216.24%