Veritas In Silico Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Operating Income: ¥-287M
• Net Income: ¥-285M
• EPS: ¥-44.00

Income Statement

Balance Sheet

Profitability Ratios

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Veritas In Silico (130A0) reported a cumulative FY2025 Q3 operating loss of ¥287 million, an ordinary loss of ¥283 million, and a net loss of ¥285 million (EPS: -¥44.00) on a non-consolidated, JGAAP basis. Revenue and most cost lines were not disclosed in XBRL for this period, and zeros should be interpreted as undisclosed rather than actual zeros; consequently, margin-based metrics that rely on revenue cannot be meaningfully computed. The balance sheet shows total assets of ¥1,984 million and total equity of ¥1,924 million, implying very low leverage and an equity-funded profile. Reported current assets are ¥2,232 million versus current liabilities of ¥39 million, yielding a very high current ratio of 56.6x and working capital of ¥2,192 million. Note that reported current assets exceed reported total assets, suggesting either classification or timing differences across tags or a presentation discrepancy in the extract; our analysis relies on the provided non-zero figures with appropriate caveats. The liability base is light (total and current liabilities both ¥39 million), resulting in a debt-to-equity ratio of roughly 0.02x, highlighting minimal financial risk from indebtedness. The equity ratio was shown as 0.0% in the extract, but that figure appears to be undisclosed rather than actually zero; a simple computation suggests equity accounts for approximately 97% of total assets (¥1,924m/¥1,984m). Ordinary loss is close to operating loss, indicating negligible non-operating items in this period. An income tax expense of ¥2.137 million despite losses is consistent with non-deductible items or minimum taxes under JGAAP. Cash flow statement line items are undisclosed, limiting an assessment of operating cash conversion and free cash flow. With current assets of ¥2,232 million and losses of roughly ¥285 million over the nine-month period, the implied burn rate appears manageable, pointing to a potentially long cash runway, though this is an estimate given disclosure gaps. As a likely early-stage R&D company, the absence of recognized revenue is not unusual; the focus remains on platform development and partnering rather than near-term commercialization. Dividend capacity is effectively nil while the company remains loss-making and reinvesting in R&D. Overall, the company exhibits strong liquidity and solvency, a clean balance sheet, and a controlled loss profile relative to its asset base, but visibility on revenue generation, cash flows, and operating expense mix is limited by the unreported items.

Profitability Analysis

ROE_decomposition: A strict DuPont bridge cannot be constructed because revenue and thus net margin and asset turnover are undisclosed. Using available data, financial leverage (Assets/Equity) is approximately 1.03x (¥1,984m/¥1,924m). Net loss to equity is about -14.8% on a cumulative nine-month basis (¥-285m/¥1,924m), which, absent revenue disclosure, reflects development-stage losses rather than weak pricing or cost control in a commercial context. margin_quality: Operating loss is ¥287m and ordinary loss is ¥283m, indicating limited non-operating noise; the net loss is largely driven by core operating spending. The presence of ¥2.1m in tax expense despite losses suggests minor non-deductible items or minimum taxes. Gross margin and EBITDA are unassessable due to undisclosed revenue and D&A. operating_leverage: With no revenue disclosure, operating leverage cannot be quantified. However, fixed-cost intensity appears material given the steady operating loss and negligible finance costs. As revenues emerge (e.g., from partnerships or milestones), incremental margin could be high if the cost base is largely fixed, but this remains untested in reported numbers.

Growth Assessment

revenue_sustainability: Revenue is undisclosed this period; YoY growth shown as +0.0% reflects non-disclosure rather than stability. As an early-stage biotech/platform company, revenue may be episodic (e.g., milestones, collaboration fees) rather than recurring, but the current dataset does not confirm timing or scale. profit_quality: The loss profile (operating: -¥287m; net: -¥285m) appears driven by operating costs, with minimal financial items. D&A is undisclosed, limiting assessment of non-cash components. The small delta between operating and ordinary losses suggests few non-core items. outlook: Assuming current assets of ~¥2.23bn and an implied annualized burn rate in the ¥380–¥420m range (extrapolating ¥285m loss over nine months with caution), the company could have a multi-year runway to pursue R&D and business development. Near-term reported growth will likely hinge on partnership wins, milestone recognitions, or grant income rather than product sales. Disclosure of revenue sources, backlog/contracted milestones, and OPEX breakdown would materially improve visibility.

Financial Health

liquidity: Current assets ¥2,232m vs. current liabilities ¥39m implies a current ratio of 56.6x and working capital of ¥2,192m; quick ratio is effectively the same given no inventories disclosed. Liquidity is very strong on reported figures. solvency: Total liabilities are ¥39m against equity of ¥1,924m, implying low leverage (D/E ~0.02x). The equity ratio appears to be about 97%, notwithstanding the 0.0% placeholder in the extract. capital_structure: The company is overwhelmingly equity-funded with negligible debt and minimal interest expense disclosed. This structure reduces refinancing risk but increases reliance on equity markets for future funding if burn persists.

Cash Flow Quality

earnings_quality: Operating cash flow is undisclosed; therefore, OCF/Net Income cannot be assessed despite a displayed ratio of 0.00 that reflects non-disclosure. With D&A not reported and finance costs minimal, reported losses likely approximate cash burn, but this is not confirmed. FCF_analysis: Investing and financing cash flows are undisclosed, and capex is not provided, preventing a free cash flow calculation. Given the R&D profile, capex may be modest relative to OPEX, implying that operating losses could be the key determinant of cash use. working_capital: Inventories are undisclosed (0 placeholder). Large working capital arises from high current assets relative to small current liabilities; composition (cash vs. receivables vs. other) is not reported, constraining assessment of collection risk or prepayments.

Dividend Sustainability

payout_ratio_assessment: Annual DPS is ¥0.00 and the payout ratio is listed as 0.0% due to non-payment; with a net loss of ¥-285m, there is no capacity for distributions under a sustainable policy framework. FCF_coverage: FCF is undisclosed; absent positive OCF and given ongoing losses, any hypothetical dividend would lack free cash flow coverage. policy_outlook: Given early-stage, R&D-driven losses and a strong cash balance, capital allocation is likely to prioritize R&D, platform development, and partnership investments over shareholder returns in the near to medium term.

Risk Assessment

Business Risks:

• Commercialization timing risk given likely early-stage platform and undisclosed revenues
• Dependency on partnership/milestone income, which can be lumpy and unpredictable
• R&D execution risk, including technical milestones and validation of in silico capabilities
• Regulatory and clinical translation risk for any therapeutics-related applications
• Intellectual property protection and freedom-to-operate risks
• Competitive pressure from other computational biology and RNA/mRNA design platforms
• Key personnel retention and hiring in specialized computational and wet-lab roles

Financial Risks:

• Sustained operating losses (-¥287m OI over 9M) necessitating external funding over time
• Potential equity dilution if capital is raised to extend runway
• Limited visibility on cash flows due to undisclosed OCF/ICF/FCF
• Concentration of assets in cash and equivalents (inferred) exposes returns to low yields
• Small absolute scale increases sensitivity to any cost overruns or delayed milestones
• Currency exposure if collaborations or trials involve foreign counterparties

Key Concerns:

• Revenue model and timing are not visible in current disclosures
• Cash flow statement is undisclosed, constraining assessment of cash conversion
• Current assets exceed total assets in the extract, indicating possible classification/timing issues in reported tags
• Absence of D&A and OPEX breakdown limits understanding of fixed vs. variable cost structure

Investment Implications

Key Takeaways:

• Loss-making but with a modest absolute loss (net -¥285m for 9M) relative to equity (¥1,924m).
• Very strong liquidity: current ratio 56.6x and working capital of ¥2,192m.
• Minimal leverage with D/E ~0.02x; capital structure is predominantly equity.
• Ordinary loss closely tracks operating loss, implying limited non-operating noise.
• Revenue and cash flow non-disclosure materially reduces analytical visibility.
• Potentially long cash runway if current assets are largely cash and burn remains near current levels.
• Future results likely to hinge on partnerships, milestones, and validation events rather than product revenue in the near term.

Metrics to Watch:

• Quarterly operating loss and OPEX breakdown (R&D vs. SG&A)
• Cash and deposits balance, and detailed cash flow statement (OCF/ICF/FCF)
• New/expanded collaboration agreements and milestone revenue timing
• Backlog or contracted revenue disclosures, if any
• Headcount and hiring plans as indicators of scaling
• Equity financing activities and dilution risk
• Regulatory and development milestones that could unlock payments

Relative Positioning: Versus Japan small/mid-cap biotech peers, Veritas In Silico appears early-stage with low leverage and comparatively strong liquidity, trading near-term profitability for funded R&D optionality and partnership-driven upside.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis