Weakened Cash ConversionAlthough FCF stays positive and covers ~81% of net income, operating and free cash flow declined in 2025 versus 2024. Slower cash conversion lowers liquidity cushions, can constrain capex or dividends, and increases the risk of relying on external financing if the trend persists.
Margin CompressionMild compression in gross and net margins versus prior peaks suggests rising cost pressure or an unfavorable revenue mix. If structural, this reduces operating leverage and long-term profitability, forcing either price increases or efficiency programs to restore historical margins and cash generation.
Rising Debt TrendDebt was reintroduced and rose to ~¥15B by 2025 from near zero, creating an upward leverage trend. While current leverage is moderate, the increase raises interest exposure and reduces headroom for discretionary spending, making the company more sensitive to weaker cash flow or rate rises.