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CTW, CTW
A software business, earning high margins on code once it is written.
We expect our cost of revenues to increase in absolute amount in line with our expansion of business and customer base growth, and to decrease as a percentage of our revenues in the long run through economics of scale and improvement of operation efficiency.
The business
What it sells, where the money comes from, the kind of company it is.
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- Gross margin has run about 76% and operating margin about 8.9% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. The operating margin has swung widely — from −1.2% to 10% — on a steadier 76% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. The cash cycle has run negative through the cycle (a median of −67 days): the operation is paid before it pays, so working capital releases cash as the business grows rather than tying it up. Read this kind of business on retention and the cost of growth. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has run in the teens (median 19%, above 15% in 2 of 3 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. Owner earnings, the cash-based check, have been thin too. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 20-F →Japan is 70% of revenue, so this is largely a single-region business.
- Japan70%$63M
- South Korea10%$9M
- North America8%$8M
- Taiwan5%$5M
- Europe3%$3M
- Other3%$3M
From the segment footnote of the company's own 20-F. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2023–2025
realized figures from each filing · older years to the left| 2023’23 | 2024’24 | 2025’25 | TTMTTMJul 2025 | |
|---|---|---|---|---|
| Income statement | ||||
| $63M | $68M | $90M | $90M | RevenueRevenue |
| $46M | $52M | $68M | $68M | Gross profitGross prof. |
| 73% | 76% | 76% | 76% | Gross marginGross mgn |
| $6M | $7M | ($1M) | ($1M) | Operating incomeOp. inc. |
| 8.9% | 9.7% | −1.2% | −1.2% | Operating marginOp. mgn |
| $3M | $6M | $4M | $4M | Net incomeNet inc. |
| 35% | 27% | 13% | 13% | Effective tax rateTax rate |
| Cash flow & returns | ||||
| $3M | $2M | $111K | $111K | Operating cash flowOp. cash |
| $779K | $2M | $3M | $3M | DepreciationDeprec. |
| ($2M) | ($6M) | ($6M) | ($6M) | Working capital & otherWC & other |
| $135K | $710K | $585K | $585K | CapexCapex |
| 0.2% | 1.0% | 0.6% | 0.6% | Capex / revenueCapex/rev |
| $2M | $877K | ($473K) | ($473K) | Owner earningsOwner earn. |
| 3.9% | 1.3% | −0.5% | −0.5% | Owner earnings marginOE mgn |
| $2M | $877K | ($473K) | ($473K) | Free cash flowFCF |
| 3.9% | 1.3% | −0.5% | −0.5% | Free cash flow marginFCF mgn |
| 19% | 52% | -6% | -6% | ROICROIC |
| 18% | 25% | 14% | 14% | Return on equityROE |
| 18% | 25% | 14% | 14% | Retained to equityRetained/eq |
| Balance sheet | ||||
| — | $14M | $12M | $12M | Cash & investmentsCash+inv |
| — | $1M | $1M | $1M | ReceivablesReceiv. |
| — | $3M | $2M | $2M | Accounts payablePayables |
| — | ($2M) | ($967K) | ($967K) | Operating working capitalOper. WC |
| — | $18M | $18M | $18M | Current assetsCur. assets |
| — | $12M | $8M | $8M | Current liabilitiesCur. liab. |
| — | 1.5× | 2.1× | 2.1× | Current ratioCurr. ratio |
| — | $935K | $1M | $1M | Net PP&ENet PP&E |
| — | $44M | $47M | $47M | Total assetsAssets |
| — | ($14M) | ($12M) | ($12M) | Net debt / (cash)Net debt |
| $19M | $24M | $28M | $28M | Shareholders’ equityEquity |
| Per share | ||||
| 60.0M | 60.0M | 60.0M | 60.0M | Shares out (diluted)Shares |
| $1.05 | $1.14 | $1.51 | $1.51 | Revenue / shareRev/sh |
| $0.06 | $0.10 | $0.06 | $0.06 | EPS (diluted)EPS |
| $0.04 | $0.01 | $-0.01 | $-0.01 | Owner earnings / shareOE/sh |
| $0.04 | $0.01 | $-0.01 | $-0.01 | Free cash flow / shareFCF/sh |
| $0.00 | $0.01 | $0.01 | $0.01 | Cap. spending / shareCapex/sh |
| $0.31 | $0.40 | $0.46 | $0.46 | Book value / shareBVPS |
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2025 the business reported $4M of profit but ($473K) of owner earnings: $4M less than the profit line, taken out by capital spending and the timing of cash.
| FY2025 | FY2024 | FY2023 | |
|---|---|---|---|
| Reported net income | $4M | $6M | $3M |
| Depreciation & amortizationnon-cash charge added back | +$3M | +$2M | +$779K |
| Working capital & othertiming of cash in and out, other non-cash items | −$6M | −$6M | −$2M |
| Cash from operations | $111K | $2M | $3M |
| Capital expenditurecash put back in to keep running and to grow | −$585K | −$710K | −$135K |
| Owner earnings | ($473K) | $877K | $2M |
| Owner-earnings marginowner earnings ÷ revenue | -1% | 1% | 4% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .
Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Will it survive?
- No meaningful interest burdenLittle or no interest expense reported
What this means
Little or no interest expense reported, the business isn't leaning on lenders to operate.
- Net cash, debt-freeCash $12M − debt $0
What this means
Cash and short-term investments exceed every dollar of debt by $12M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Negative, funded by othersDSO 6 + DIO 0 − DPO 39 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)
Is it a good business?
- Not enough dataIndustry peers: median -1%
What this means
The filing data didn't include the inputs for this check.
- Thin through the cycle3-yr median margin, range -1%–4%; latest ($473K) = operating cash $111K − maintenance capex $585KIndustry peers: median 3%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -1% of revenue this year, a 1% median across 3 years.
- Thinly cash-backedCash from ops $111K ÷ net income $4M
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? 0.22×HarvestingCapex $585K ÷ depreciation $3M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 1 of 2 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size MissRevenue ≥ $2B · $90M
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity PassCurrent ratio ≥ 2× · 2.15×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.07/share (latest year $0.06), the averaged base the calculator's gate runs on, and book value is $0.46/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Jul 31, 2025Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
- Cash & short-term investments$12M
- Receivables$1M
- Other current assets$4M
- Accounts payable$2M
- Other current liabilities$6M
From the company's latest filing.
Peers, IT Services & Consulting
The same industry, side by side on owner economics and what the growth costs. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | Gross marginmedian over the record | Op. marginmedian over the record | ROICmedian over the record | Owner earn. marginmedian over the record | Sales & marketinglatest FY | Stock paylatest FY |
|---|---|---|---|---|---|---|---|
| INODInnodata Inc. | $252M | 39%3y | -0.8% | -1% | 3% | — | 4.4% |
| SYSo-Young International Inc. | $226M | 75% | -4.1% | -4% | 3% | — | — |
| MWCMicware Co. Ltd. | $138M | 35% | 10.8% | 59%2y | 8% | — | — |
| GMHSGamehaus Holdings Inc. | $118M | 53% | 2.9% | 32% | 2% | — | — |
| GLOOGloo Holdings Inc. | $95M | — | -209.1% | -76%1y | -196% | 38.4% | 16.3% |
| CTWCTW | $90M | 76% | 8.9% | 19% | 1% | — | — |
| ISSCInnovative Solutions and Support Inc. | $84M | 55% | 16.9% | 11% | 12% | — | 2.8% |
| SOPHSOPHiA GENETICS SA | $77M | 67% | -128.7% | -179% | -113% | — | — |
| Group median | — | 55% | 1.0% | 5% | 2% | — | — |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the home-market price, not the US ADR quote. CTW reports in USD, and every figure here (owner earnings, book value, the share count) is on that ordinary-share basis. Enter the price on the same basis: the local-exchange quote per ordinary share. A US ADR price in dollars bundles the ADR-to-ordinary ratio, so it will not reconcile with these figures and would throw the multiple off.
Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what CTW has delivered.
CTW’s latest year shows negative owner earnings, below the record’s own through-cycle owner earnings. So the tool opens on the through-cycle base, the cash it would earn at rest; clear the toggle below to read the latest year exactly as reported.
—
9.0% = the 4.71% 10-year Treasury (Aug 18, 2026) + 4.29 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Prefilled with the 10-year Treasury (4.71%, as of Aug 18, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner earnings ($473K) on 60M shares outstanding (a weighted average, the only count this filer tags); net cash $12M. The base opens on the through-cycle figure (the latest year sits off the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Manual order: ← CSTE its page in the Manual CURR →
Industry order: ← CTSH the IT Services & Consulting chapter DAVA →