Liberaware Co.,Ltd. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥294M
• Operating Income: ¥-614M
• Net Income: ¥-606M
• EPS: ¥-32.06

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

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

Liberaware reported FY2026 Q1 revenue of 2.94 (100M JPY), up 57.8% YoY, demonstrating strong top-line momentum from a small base. Gross profit was 1.35, implying a gross margin of 45.8%, which is healthy for an early-stage hardware/software business mix. However, SG&A of 7.49 significantly exceeded gross profit, resulting in an operating loss of -6.14. Ordinary loss came to -6.05 and net loss was -6.05, with EPS at -32.06 JPY, underlining the current investment phase and lack of operating leverage at this scale. Non-operating income and expenses were modest (0.16 and 0.07 respectively) and did not materially alter earnings. The DuPont breakdown indicates a net margin of -205.8%, asset turnover of 0.206, and financial leverage of 4.27x, yielding a calculated ROE of -180.6%, confirming substantial equity erosion pressure if losses persist. Liquidity appears strong on headline ratios (current ratio 262.8%, quick ratio 255.6%) supported by cash and deposits of 7.52 and receivables of 3.23. The company has interest-bearing borrowings implied at 4.12 (2.00 short-term and 2.12 long-term), with a debt-to-equity ratio of 2.29x based on total liabilities to equity, and negative interest coverage (-305x), highlighting reliance on cash reserves and external funding. Balance sheet subtotals show inconsistencies (e.g., current assets exceeding total assets), likely due to unreported classifications or timing of XBRL tagging; this limits precision in some ratio analysis. Working capital is 9.05, providing a cushion for near-term operations. With net losses of -6.05 and limited visibility into operating cash flow (unreported), cash burn risk is non-trivial despite the cash position. Dividend-related items are unreported and, given losses and early-stage scaling, distributions are unlikely near-term. Key watchpoints are SG&A discipline, conversion of backlog to revenue, and sustaining gross margin as volumes scale. Overall, the quarter shows robust revenue growth but heavy operating losses; near-term investment case hinges on achieving scale economies and managing liquidity. Data gaps (OCF, capex, D&A, SG&A details) and balance sheet inconsistencies warrant caution in interpreting some metrics.

Profitability Analysis

ROE_decomposition: DuPont shows Net Margin -205.8% × Asset Turnover 0.206 × Financial Leverage 4.27x = ROE -180.6% (reported/calculated consistent). The severe negative margin is the primary driver; leverage modestly amplifies the negative ROE given a small equity base. margin_quality: Gross margin of 45.8% is solid for a Q1 snapshot and suggests pricing and cost-of-sales control are reasonable. Operating margin is deeply negative due to SG&A of 7.49 far outstripping gross profit of 1.35. Non-operating items are minor relative to operating loss. operating_leverage: At 2.94 revenue, fixed cost absorption is low. SG&A/revenue is ~255% this quarter, indicating substantial cost base ahead of revenue scale. If revenue growth continues near YoY +58% and gross margin remains ~46%, incremental gross profit may improve operating leverage, but material SG&A moderation or revenue scale is required to approach breakeven.

Growth Assessment

revenue_sustainability: Revenue expanded +57.8% YoY to 2.94, signaling strong demand momentum from a low base. Sustainability depends on backlog conversion, repeat orders, and customer diversification; these data are unreported, so durability cannot be confirmed. profit_quality: Given a net loss of -6.05 and lack of OCF disclosure, underlying profit quality cannot be validated. Gross margin indicates underlying unit economics may be viable, but current losses are driven by overhead scale-up. outlook: Near-term outlook hinges on maintaining high double-digit growth while holding or improving gross margin and managing SG&A growth. Without visibility into order book, pipeline, or segment mix, the base case is continued top-line growth with gradual operating loss reduction contingent on cost discipline and scale.

Financial Health

liquidity: Current ratio 262.8% and quick ratio 255.6% indicate ample short-term liquidity. Cash and deposits of 7.52 and receivables of 3.23 underpin working capital of 9.05. Operating cash needs are unknown due to unreported OCF. solvency: Total liabilities are 7.68 versus total equity 3.35, yielding a liabilities-to-equity ratio of 2.29x. Interest-bearing debt is implied at 4.12 (2.00 short-term, 2.12 long-term). Interest expense of 0.02 and negative EBIT result in interest coverage of approximately -305x, signaling reliance on cash rather than operating earnings to service debt. capital_structure: Financial leverage per DuPont is 4.27x, reflecting a small equity base (BVPS 17.73 JPY) relative to assets. With net losses, equity could erode further absent capital raises or rapid improvement in operating results. notes_on_data: Balance sheet lines show inconsistencies (e.g., current assets 14.62 exceed total assets 14.29), likely due to unreported components or classification differences in the quarter’s XBRL. Interpret aggregate ratios with caution.

Cash Flow Quality

earnings_quality: Earnings are loss-making and not corroborated by operating cash flow data (unreported). Non-operating items are small relative to operating loss, suggesting losses are primarily operational. FCF_analysis: Capex and OCF are unreported; consequently FCF cannot be calculated. Cash balance (7.52) provides some runway, but with quarterly operating loss of -6.14, cash burn could be material if OCF tracks EBIT. working_capital: Receivables of 3.23 and inventories of 0.40 are moderate versus revenue scale, supporting current ratios. Without AR aging or DSO, collection risk cannot be assessed. Payables (0.02) are minimal, implying limited supplier financing.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratios are unreported; given a net loss (EPS -32.06 JPY), payout capacity is effectively constrained. FCF_coverage: FCF is unreported; with negative earnings and probable cash burn, FCF coverage of dividends would be poor if dividends were contemplated. policy_outlook: Given early-stage scaling and negative profitability, priority is likely on reinvestment and liquidity preservation rather than shareholder distributions in the near term.

Risk Assessment

Business Risks:

• Execution risk in scaling revenue to cover a sizable fixed-cost base (high SG&A relative to sales).
• Gross margin pressure if pricing softens or mix shifts unfavorably as volumes grow.
• Customer concentration and order timing risks typical of small-scale enterprise sales (not disclosed).
• Product development and commercialization risks with potential for delays or cost overruns (R&D unreported).
• Supply chain and component availability risks that could impact delivery and costs.
• Talent acquisition and retention pressures as the company scales operations.

Financial Risks:

• Liquidity risk if cash burn persists and access to financing tightens.
• Solvency pressure from high losses and a small equity base (BVPS 17.73 JPY, ROE -180.6%).
• Refinancing risk on 2.00 short-term loans amid negative interest coverage.
• Covenant or borrowing base risks (not disclosed) given negative operating results.
• Working capital volatility due to receivables collection and minimal trade payables.

Key Concerns:

• Sustained operating losses (-6.14) with limited visibility on OCF.
• Balance sheet data inconsistencies, complicating precise ratio analysis.
• High leverage to equity (liabilities/equity 2.29x) and negative interest coverage.
• Dependence on revenue acceleration and SG&A control to approach breakeven.

Investment Implications

Key Takeaways:

• Strong YoY revenue growth (+57.8%) but insufficient to absorb elevated SG&A.
• Gross margin of 45.8% suggests potential for viable unit economics at scale.
• Negative ROE (-180.6%) driven by extreme negative net margin and small equity base.
• Healthy liquidity on paper (current ratio 262.8%), but cash burn risk remains.
• Debt load (short-term 2.00, long-term 2.12) manageable only if liquidity is preserved.
• Data gaps (OCF, capex, D&A, SG&A breakdown) and BS inconsistencies limit analytical precision.

Metrics to Watch:

• Quarterly revenue growth rate and order backlog visibility.
• Gross margin stability and cost of sales trends.
• SG&A-to-sales ratio trajectory and operating margin improvement.
• Operating cash flow and free cash flow once disclosed.
• Cash balance and net debt, including refinancing of short-term loans.
• Receivables and inventory turns (DSO/DIO) when disclosed.

Relative Positioning: Within early-stage, growth-oriented TSE-listed companies, Liberaware exhibits above-average revenue growth but below-peer operating margins and earnings due to a heavier cost base; sustainability depends on converting growth into operating leverage while maintaining liquidity.

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