Scala, Inc. (4845) AI Stock Analysis

• Market Cap: ¥6.56B
• Dividend Yield: 4.25%
• Average Volume (3M): 42.30K
• Price to Earnings (P/E): 10.0
• Beta (1Y): 0.36
• Revenue Growth: -24.66%
• EPS Growth: N/A
• Country: JP
• Employees: 529
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 5.72
• Shares Outstanding: 17,768,260
• 10 Day Avg. Volume: 45,680
• 30 Day Avg. Volume: 42,300
• PEG Ratio: -0.06
• Price to Book (P/B): 1.55
• Price to Sales (P/S): 0.91
• P/FCF Ratio: 14.53
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: ¥387.00 ▼(-1.53% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is held back primarily by weakened recent cash flow (TTM free cash flow collapsed) and a bearish technical setup (below key moving averages with negative MACD). These are partly offset by the profitability rebound and improved leverage versus FY2024, and strongly supported by an attractive valuation (low P/E and high dividend yield).

Positive Factors

Profitability & margins

Sustained mid-to-high gross margins and positive operating/net margins indicate durable unit economics and pricing power. The rebound from prior losses to consistent profitability supports reinvestment in product, steady operating cash generation when conversion normalizes, and long-term margin resilience.

Improving leverage and strong ROE

Reduction in leverage from prior peaks and a ~20% ROE reflect improving capitalization and efficient capital deployment. This enhances financial flexibility for strategic investments or restructuring, lowering refinancing risk and supporting sustainable return generation over the medium term.

Recurring revenue mix & cloud partnerships

A mix of subscription and maintenance revenues plus consulting creates recurring and diversified cash streams, improving predictability. Strategic cloud partnerships broaden go-to-market, drive integration demand, and strengthen customer stickiness—supporting steady revenue capture over multiple quarters.

Negative Factors

Revenue contraction

Declining top-line undermines the durability of the earnings recovery and pressures long-term growth prospects. Persistent revenue shrinkage limits operating leverage, reduces flexibility to invest in R&D or sales, and raises execution risk for sustaining current margin levels.

Weak cash conversion / collapsed FCF

A sharp fall in cash conversion and near-collapse of FCF drastically reduces financial flexibility despite accounting profits. This constrains organic investment, increases reliance on external funding for growth or dividends, and raises vulnerability to working-capital swings or cyclical shocks.

Elevated leverage for a software firm

Material leverage increases the firm's sensitivity to revenue volatility and interest costs, limiting strategic optionality. For a software company—where pure-play peers often carry minimal debt—this level of leverage can constrain M&A, capex flexibility, and the ability to absorb prolonged demand weakness.

Scala, Inc. Business Overview & Revenue Model

Company Description

Scala, Inc. provides SaaS/ASP services supporting communications between corporations and individuals primarily in Japan. The company operates through five segments: IT/AI/IoT/DX Business, Customer Support Business, HR & Education Business, EC Business, and Incubation & Investment Business. The IT/AI/IoT/DX Business segment engages in the planning and development of services promoting digital transformation (DX); DX initiatives for local governments and the financial industry; and digital platforms using the app "xID", which is linked to My Number Card (the individual number card issued under the Social Security and Tax Number System). The Customer Support Business segment provides consulting services for call centers and others. The HR & Education Business segment provides recruitment support services for new graduates, which are specialized for athletic and female students, as well as services for the planning and operation of related events comprising joint information sessions and career seminars; childcare and educational services; services in the areas of sports school for children, the planning and management of sports events, and online sports education; and support services for the recruitment of foreign talent. The EC Business segment operates a reuse e-commerce site for buying and selling trading cards games (TCG), which also contains game walkthrough pages. The Incubation & Investment Business segment engages in activities related to the investment discovery, and investments execution and engagement; and implements business development, and businesses related to immigration support services. The company was formerly known as Fusion Partners Co. and changed its name to Scala, Inc. in December 2016. Scala, Inc. was founded in 1991 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Scala generates revenue through a combination of software licensing, subscription-based services, and consulting fees. The company sells its data analytics platforms to enterprises on a license basis, providing one-time fees along with annual maintenance contracts. Additionally, Scala offers subscription models for its cloud-based analytics solutions, generating recurring revenue from clients who require ongoing access to their software. Consulting services further contribute to revenue, as Scala assists organizations in implementing and optimizing their data strategies. Key partnerships with cloud service providers enhance their offerings and attract more clients, thus positively impacting their earnings.

Scala, Inc. Financial Statement Overview

Summary

Income statement shows a meaningful profitability rebound with solid margins (gross ~49%, operating ~9%, net ~12%), but revenue is contracting (TTM down ~5.5%). Balance sheet leverage improved versus FY2024 yet remains meaningful for a software business (debt-to-equity ~0.88–0.94). The biggest drag is cash conversion: TTM operating cash flow fell sharply and free cash flow collapsed to ~21M, reducing financial flexibility despite positive net income.

Income Statement

TTM (Trailing-Twelve-Months) profitability looks healthy, with solid gross margin (~49%) and positive operating and net margins (~9% and ~12%). The company also shows a sharp rebound from the large loss in FY2024 to meaningful profits in FY2025 and TTM. The key weakness is growth: revenue is contracting (TTM down ~5.5% and FY2025 slightly down), which raises questions about demand momentum and the durability of the earnings recovery.

Balance Sheet

Leverage is moderate with debt roughly in line with equity (debt-to-equity ~0.88–0.94 in FY2025 and TTM), a clear improvement from FY2024 when leverage spiked (debt-to-equity ~1.43). Returns on equity are strong in FY2025 and TTM (~20%), reflecting the earnings recovery. Offsetting this, the balance sheet still carries meaningful debt for a software business and has shown volatility over time, including a period of negative returns (FY2022–FY2024), which increases perceived risk.

Cash Flow

Cash generation weakened materially in TTM (Trailing-Twelve-Months): operating cash flow dropped to ~188M and free cash flow collapsed to ~21M (down ~94% vs. prior period), despite positive net income. FY2025 cash flow was much stronger (free cash flow ~512M), so the TTM shortfall may be timing/working-capital related, but it still signals lower cash conversion and reduced financial flexibility in the most recent period.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	7.38B	8.18B	10.71B	11.84B	9.57B	8.73B
Gross Profit	3.64B	3.95B	4.56B	4.47B	3.63B	3.64B
EBITDA	826.32M	1.05B	-1.47B	1.22B	497.24M	843.37M
Net Income	643.81M	982.00M	-2.89B	-218.58M	-523.04M	3.07B
Balance Sheet
Total Assets	10.00B	10.22B	12.70B	18.32B	20.82B	20.33B
Cash, Cash Equivalents and Short-Term Investments	4.38B	4.59B	6.82B	7.74B	9.63B	9.81B
Total Debt	5.12B	4.20B	6.19B	7.89B	9.25B	8.58B
Total Liabilities	5.28B	5.39B	8.13B	10.23B	11.81B	9.86B
Stockholders Equity	4.69B	4.80B	4.34B	7.83B	8.69B	10.16B
Cash Flow
Free Cash Flow	20.76M	512.00M	152.34M	392.66M	1.85B	-49.99M
Operating Cash Flow	187.91M	589.00M	251.77M	601.36M	2.05B	720.81M
Investing Cash Flow	1.19B	778.00M	161.98M	-214.87M	-1.89B	4.43B
Financing Cash Flow	-2.02B	-3.60B	-1.35B	-2.25B	-339.02M	-3.16B

Scala, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 393.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4845, the sentiment is Negative. The current price of 393 is above the 20-day moving average (MA) of 371.80, above the 50-day MA of 378.22, and above the 200-day MA of 392.44, indicating a bearish trend. The MACD of -3.45 indicates Positive momentum. The RSI at 41.82 is Neutral, neither overbought nor oversold. The STOCH value of 35.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4845.

Scala, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5256	69 Neutral	¥2.92B	16.36	―	―	13.48%	61.77%
4397	68 Neutral	¥7.04B	17.46	―	―	11.32%	―
4168	67 Neutral	¥9.81B	10.50	―	0.70%	9.78%	-23.98%
5033	66 Neutral	¥4.93B	13.38	―	―	7.60%	19.13%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4845	58 Neutral	¥6.56B	9.96	―	4.25%	-24.66%	―
4015	57 Neutral	¥7.72B	57.53	―	―	49.33%	104.72%

Scala, Inc. Corporate Events

Scala Profit Slumps Despite Stable Revenue, Dividend Policy Intact

Scala, Inc. reported six-month revenue to December 31, 2025 of ¥4.01 billion, down 4.1% year on year, with IFRS operating income plunging 84.8% to ¥56 million and net income attributable to owners of the parent falling 95.9% to ¥14 million. Despite a slight dip in total assets and equity, the equity ratio stayed near 47%, while earnings per share tumbled and management absorbed M&A costs, underscoring weaker profitability versus the prior period.

The company kept its dividend policy intact, paying an interim ¥8.5 per share and forecasting a slight increase in the annual payout to ¥17, signaling a commitment to shareholder returns despite profit pressure. For the full fiscal year ending June 30, 2026, Scala forecasts revenue growth of 7.6% to ¥8.8 billion but expects operating income and net income to decline double digits, implying tighter margins and a cautious earnings outlook for stakeholders.

The most recent analyst rating on (JP:4845) stock is a Buy with a Yen442.00 price target. To see the full list of analyst forecasts on Scala, Inc. stock, see the JP:4845 Stock Forecast page.

Scala Applies to Shift Listing from TSE Prime to Standard Market

Scala, Inc. has applied to move its listing from the Tokyo Stock Exchange Prime Market to the Standard Market, formalizing a policy first outlined in June 2025. The company concluded that the Standard Market better fits its current business scale and market environment and would support medium- to long-term corporate value enhancement.

The shift follows the company’s failure to meet the Prime Market’s tradable share market capitalization requirement, which placed it in an improvement period running until June 30, 2026. Scala already satisfies all continued listing and examination criteria for the Standard Market and views the transition, alongside ongoing structural reforms and its Medium-term Management Plan 2026-2028, as key to stabilizing its management base and supporting future regrowth while maintaining its focus on sustainable value creation.

The most recent analyst rating on (JP:4845) stock is a Buy with a Yen442.00 price target. To see the full list of analyst forecasts on Scala, Inc. stock, see the JP:4845 Stock Forecast page.