CROOZ,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥5.38B
• Operating Income: ¥-138M
• Net Income: ¥-359M
• EPS: ¥-19.25

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

CROOZ Co., Ltd. (21380) reported FY2026 Q2 consolidated results under JGAAP with top-line pressure and continued operating losses. Revenue was ¥5.382bn, down 23.2% YoY, indicating a significant contraction in the core business. Gross profit is disclosed at ¥2.806bn, implying a strong gross margin of 52.1%, which suggests resilient unit economics despite revenue decline. Operating income remained in the red at -¥138m (flat YoY), and ordinary income deteriorated to -¥256m, reflecting financing costs and possibly non-operating headwinds. Net income was -¥184m (EPS -¥19.25), keeping ROE negative at -2.03% per the DuPont output. Asset turnover is low at 0.187x, indicating slow capital cycling and underutilized assets relative to revenue scale. Leverage is elevated with financial leverage at 3.17x and a debt-to-equity ratio of 2.23x (using total liabilities), highlighting sensitivity to earnings volatility and interest costs. Interest expense of ¥60m drove an interest coverage of -2.3x (using EBITDA), underscoring near-term pressure on debt servicing capacity from operating cash generation. Operating cash flow was a sizable outflow of -¥946.6m, materially larger than the net loss, pointing to working capital drag or cash costs not reflected in accrual earnings. Financing inflows of ¥3.974bn supported liquidity, compensating for operating burn; investing cash flow was not disclosed in this period. The current ratio is a comfortable 280%, supported by ¥12.776bn in current assets and ¥4.557bn in current liabilities, and working capital stands at ¥8.219bn, offering near-term liquidity headroom. Despite liquidity, profitability remains the core challenge given revenue contraction and negative EBITDA of -¥13m. The reported gross margin strength contrasts with the scale-down in revenue, implying that cost control at the gross level has partially cushioned the downturn. Dividend remains suspended (DPS ¥0), appropriate given negative FCF (operating outflow) and the need to preserve cash. Several items, including equity ratio, cash balance, investing cash flows, and per-share balances, are unreported; analysis relies on available non-zero data and provided ratios. Overall, the financial picture shows strong gross margin but weak operating leverage, low asset turnover, negative operating cash flow, and elevated leverage requiring ongoing funding support.

Profitability Analysis

ROE_decomposition: DuPont indicates ROE of -2.03% = Net margin (-3.42%) × Asset turnover (0.187x) × Financial leverage (3.17x). The negative net margin is the primary driver of the negative ROE, amplified by low turnover; leverage modestly magnifies the effect. margin_quality: Gross margin of 52.1% (¥2.806bn gross profit on ¥5.382bn revenue) is strong, suggesting favorable unit economics or mix. Operating margin is -2.6% (operating loss ¥138m), indicating sizable SG&A burden relative to gross profit. EBITDA margin is -0.2% (EBITDA -¥13m), pointing to near break-even before D&A but still negative. Note: disclosed cost of sales does not reconcile with disclosed gross profit; we rely on the provided gross profit and margin for analysis. operating_leverage: Revenue contracted 23.2% YoY while operating income remained negative, indicating adverse operating leverage: fixed costs did not flex sufficiently with lower revenue. The small EBITDA loss versus larger operating loss suggests D&A weighs on EBIT, but underlying cost base remains tight yet insufficient to offset the revenue drop.

Growth Assessment

revenue_sustainability: Sales declined 23.2% YoY to ¥5.382bn, signaling weakened demand or portfolio downsizing. Sustainability is uncertain without segment detail; current trajectory indicates top-line headwinds. profit_quality: Net margin -3.42% and ordinary loss -¥256m reflect pressure beyond core operations (interest and other non-operating factors). Gross margin resilience suggests product/service economics remain intact, but scale inefficiencies persist. outlook: Near-term recovery depends on stabilizing revenue and executing cost rationalization to lift operating margin into positive territory. With low asset turnover (0.187x), monetization of assets or portfolio pruning could improve efficiency. Absent evidence of reacceleration, base case is modest improvement contingent on cost actions and stabilization of non-operating expenses.

Financial Health

liquidity: Current assets ¥12.776bn vs. current liabilities ¥4.557bn yields a current ratio ~2.80x and quick ratio ~2.80x (inventories not disclosed). Working capital is ¥8.219bn, providing short-term cushion. solvency: Total liabilities ¥20.203bn vs. equity ¥9.075bn implies leverage of ~2.23x on a liabilities-to-equity basis; financial leverage (assets/equity) is 3.17x. Interest coverage is -2.3x (EBITDA basis), indicating reliance on external funding or cash reserves to service interest. capital_structure: Balance sheet shows elevated liabilities relative to equity. Financing cash inflow of ¥3.974bn in the period suggests active use of debt or equity financing to fund operations and liquidity. Equity ratio is undisclosed; using totals implies ~31.5%, but we note the reported equity ratio item is unreported.

Cash Flow Quality

earnings_quality: OCF (-¥946.6m) vs. net income (-¥184m) yields an OCF/NI ratio of 5.14 due to both being negative; this is not indicative of strong cash conversion and instead reflects greater cash burn than accrual loss (likely working capital outflows or cash costs). FCF_analysis: Free cash flow not disclosed; with OCF negative and investing CF unreported this period, economic FCF is likely negative absent asset sales. Dependence on ¥3.974bn financing inflow highlights funding-driven liquidity. working_capital: Current ratio strength notwithstanding, OCF suggests working capital was a use of cash. Specific drivers (receivables, payables, prepayments) are not disclosed; monitoring collection cycles and payables terms will be critical.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0 and payout ratio 0.0%, appropriate with negative earnings (EPS -¥19.25) and operating cash outflows. FCF_coverage: With operating cash outflow and unreported investing CF, FCF coverage of dividends is not meaningful; current capacity to pay dividends from FCF appears absent. policy_outlook: Given loss-making status, negative EBITDA/OCF, and reliance on financing cash inflows, continuation of a no-dividend stance is likely until profitability and positive OCF are restored.

Risk Assessment

Business Risks:

• Revenue contraction of 23.2% YoY indicating demand or product cycle risk
• Operating leverage risk from a fixed cost base leading to losses when revenue declines
• Low asset turnover (0.187x) signaling potential inefficiency or underutilized assets
• Customer concentration or product dependency risks (not disclosed but consistent with volatility)
• Competitive and pricing pressures affecting scaling back of sales

Financial Risks:

• Negative operating cash flow (-¥946.6m) necessitating external financing
• Elevated leverage (liabilities/equity 2.23x) and negative interest coverage (-2.3x)
• Sensitivity to interest rate changes due to recurring interest expense (¥60m)
• Potential covenant or refinancing risks if losses persist
• Liquidity reporting gaps (cash balance undisclosed), complicating assessment of run-rate funding needs

Key Concerns:

• Sustained negative EBITDA/operating losses with declining sales
• Dependence on financing inflows (¥3.974bn) to support operations
• Cash burn exceeding accrual losses indicating working capital strain
• Data inconsistencies between disclosed gross profit and cost of sales; reliance on provided gross margin for analysis

Investment Implications

Key Takeaways:

• Top-line down 23.2% YoY to ¥5.382bn; scale is the primary profitability constraint
• Gross margin solid at 52.1%, but SG&A and D&A keep operating profit negative (-¥138m)
• EBITDA negative (-¥13m) and interest coverage -2.3x highlight fragile earnings base
• OCF outflow (-¥947m) versus net loss (-¥184m) underscores poor cash conversion
• Leverage elevated (liabilities/equity 2.23x); financing inflow of ¥3.97bn bolstered liquidity
• Current ratio ~2.8x and working capital ¥8.22bn provide near-term buffer, but burn persists

Metrics to Watch:

• Quarterly revenue trajectory and order intake to gauge stabilization
• Operating margin and EBITDA margin improvement from cost actions
• OCF trend and working capital days (DSO/DPO) to assess cash conversion
• Interest coverage and net debt movement post financing inflows
• Asset turnover improvement via portfolio optimization or disposals

Relative Positioning: Within TSE small/mid-cap peers, CROOZ exhibits above-average gross margin but below-average growth, weaker operating profitability, and higher leverage, implying greater sensitivity to revenue volatility and funding conditions.

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