miratap inc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥16.75B
• Operating Income: ¥-282M
• Net Income: ¥-438M
• EPS: ¥-24.55

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

Miratapp Co., Ltd. (31870) delivered FY2025 Q4 consolidated results under JGAAP showing modest topline growth but persistent operating losses and negative free cash flow. Revenue rose 3.9% YoY to ¥16.746 billion, with gross profit of ¥5.684 billion and a solid gross margin of 33.9%, indicating continued value-add despite market conditions. Operating income remained in the red at -¥282 million (operating margin -1.7%), with the disclosed YoY change suggesting a deterioration at the operating level. Ordinary income was -¥291 million, implying limited non-operating swings and manageable financial costs. Net income was a loss of -¥447 million; the reported +21.0% YoY suggests the bottom-line loss narrowed versus the prior year. DuPont analysis points to a negative ROE of -15.4%, driven by a -2.67% net margin, offset by relatively high asset turnover of 1.905x and leverage of 3.03x. Liquidity is mixed: the current ratio stands at 125.9%, but the quick ratio of 64.1% points to dependence on inventory conversion for near-term obligations. Inventories are sizable at ¥3.05 billion, about 49% of current assets, implying an indicative inventory days figure of roughly ~107 days using period-end balances and reported COGS. Operating cash flow was -¥55 million, a limited cash burn relative to the net loss (OCF/NI of 0.12), though still negative. Investing cash outflows of -¥734 million (likely capex and/or strategic investments) drove free cash flow to -¥789 million, highlighting ongoing cash needs. Financing cash flow was +¥55 million, suggesting modest reliance on external funding to bridge the gap. Leverage is moderate with total liabilities/equity of 1.99x and interest expense of ¥18 million, translating to negative interest coverage on an EBIT basis given the operating loss. Dividend per share is ¥0, consistent with losses and negative FCF; cash preservation appears prudent. Several data points (e.g., cash and equivalents, equity ratio, shares outstanding) are unreported in XBRL and hence appear as zero; conclusions are based on available non-zero items. Overall, the company exhibits steady revenue with reasonable gross margin but insufficient scale or cost absorption to achieve profitability, and investment outlays are weighing on free cash flow.

Profitability Analysis

ROE of -15.4% decomposes into a -2.67% net margin, 1.905x asset turnover, and 3.03x financial leverage, clearly indicating margin pressure is the primary drag. Gross margin is healthy at 33.9%, evidencing pricing power and/or product mix that adds value. However, operating margin of -1.7% shows that overheads and fixed costs outweigh gross profit improvements, pointing to suboptimal operating leverage at current scale. EBITDA is -¥116 million, a -0.7% margin, which, while close to breakeven, still indicates insufficient contribution after SG&A. Ordinary loss of -¥291 million is close to operating loss, suggesting limited non-operating gains/losses and manageable financial costs (interest expense ¥18 million). Interest coverage on an EBIT basis is -15.7x; on EBITDA it improves but remains negative, reinforcing that profitability must recover to ensure coverage without relying on cash reserves. The tax line (¥150 million expense despite a net loss) likely reflects valuation allowance movements or non-deductible items under JGAAP; tax burden is not a driver of the loss. Overall margin quality looks decent at the gross level but is eroded by fixed costs; positive operating leverage could emerge if revenue accelerates or costs are rationalized.

Growth Assessment

Revenue grew 3.9% YoY to ¥16.746 billion, a modest pace that suggests stable demand but not enough to overcome the fixed-cost base. Gross profit increased in line with sales, maintaining a 33.9% margin, which supports the sustainability of the topline from a pricing/mix perspective. The operating loss widened per the provided YoY indicator, implying that SG&A growth or other operating costs outpaced gross profit gains. Net loss narrowed by 21% YoY per disclosure, possibly aided by non-operating factors or cost control below the operating line; however, the earnings quality is mixed given the divergence between operating and net trends. Asset turnover at 1.905x indicates efficient use of assets to generate sales, supportive of growth scalability if margins can improve. Investing outflows of ¥734 million suggest continued reinvestment (e.g., capex, product development, or strategic initiatives), which could underpin medium-term growth but weigh on near-term FCF. Outlook hinges on the company’s ability to translate gross margin stability into operating leverage via SG&A discipline and capacity utilization; a low-single-digit revenue growth path alone is unlikely to restore profitability without cost actions. Near-term earnings are likely to remain sensitive to demand variability and inventory management.

Financial Health

Liquidity: current ratio 125.9% (¥6.211 billion current assets vs. ¥4.934 billion current liabilities) provides a cushion, but the quick ratio of 64.1% reflects reliance on inventory conversion for liquidity. Working capital stands at ¥1.278 billion, which should support operations assuming normal inventory turnover. Solvency: total liabilities/equity at 1.99x indicates moderate leverage; financial risk is present but not excessive given low interest expense (¥18 million). Asset base totals ¥8.79 billion with equity of ¥2.903 billion; asset turnover is strong at 1.905x. The reported equity ratio is unreported in XBRL (displayed as 0.0%); based on totals, equity/asset ratio would be approximately 33%. Cash and equivalents are unreported (displayed as 0); liquidity conclusions rely on working capital composition rather than cash balances. Overall, the balance sheet shows adequate short-term coverage but sensitivity to inventory movements and ongoing investment needs.

Cash Flow Quality

OCF of -¥55 million versus a net loss of -¥447 million (OCF/NI = 0.12) indicates some non-cash loss components (e.g., ¥166 million D&A) but also working capital or cash costs offsetting these add-backs. Free cash flow was -¥789 million, driven by the combination of slightly negative OCF and sizable investing outflows (-¥734 million). Working capital dynamics likely contributed to OCF weakness, with inventories of ¥3.05 billion indicating capital tied up; an indicative inventory days of ~107 (using ending balance) suggests scope for optimization. Earnings quality appears mixed: gross margin is solid, but cash conversion is weak due to losses and investment needs. Financing inflows of ¥55 million partly offset FCF burn, pointing to ongoing external funding needs if investment levels persist. With cash balance unreported, runway assessment is constrained; reliance on credit lines or equity would be a consideration if FCF remains negative.

Dividend Sustainability

DPS is ¥0.00 with a payout ratio of 0.0%, appropriate given negative net income and negative free cash flow (-¥789 million). FCF coverage of dividends is 0.00x, and there is no capacity to resume distributions without a turnaround in operating cash flow and/or a reduction in investing outlays. Given leverage of 1.99x liabilities/equity and negative interest coverage, conserving cash is prudent to maintain financial flexibility. Under a typical JGAAP policy framework, management is likely to prioritize reinvestment and balance sheet stability over shareholder returns until profitability and FCF turn positive.

Risk Assessment

Business Risks:

• Operating leverage risk: modest revenue growth may not cover fixed cost base, prolonging operating losses
• Inventory risk: high inventory relative to current assets increases exposure to demand volatility and potential obsolescence
• Execution risk on cost control and efficiency improvements required to restore operating profitability
• Competitive pressure potentially constraining pricing despite solid gross margins
• Dependence on continued reinvestment (capex/strategic spend) to sustain growth

Financial Risks:

• Negative FCF (-¥789 million) necessitating ongoing external funding if sustained
• Negative interest coverage highlights sensitivity to borrowing costs even if current interest burden is low
• Liquidity concentration in inventories; quick ratio of 64.1% signals weaker immediate liquidity
• Potential tax cash outflows or valuation allowance effects despite accounting losses

Key Concerns:

• Sustained operating losses with limited visibility on rapid cost absorption
• Working capital drag from inventories affecting OCF
• Continuation of sizable investing outflows without near-term cash return
• Limited disclosure on cash balances and equity ratio (unreported items) constraining assessment of runway

Investment Implications

Key Takeaways:

• Topline up 3.9% with resilient 33.9% gross margin, but operating margin remains negative at -1.7%
• ROE -15.4% driven by margin weakness despite strong asset turnover (1.905x)
• OCF modestly negative (-¥55 million) and FCF materially negative (-¥789 million) due to investment outflows
• Liquidity adequate on a current basis (125.9%) but quick ratio weak (64.1%) due to inventory intensity
• Leverage moderate (liabilities/equity 1.99x) with low interest expense (¥18 million), yet coverage negative
• Dividend suspended (DPS ¥0), consistent with loss-making/negative FCF profile

Metrics to Watch:

• Operating margin trajectory and EBITDA breakeven timing
• Inventory turnover and working capital days (especially inventory days)
• OCF/Net income conversion and progression of free cash flow
• Capex/investing cash outflows and associated returns
• Revenue growth acceleration beyond low single digits to drive operating leverage
• Interest coverage and any changes in borrowing costs or debt levels

Relative Positioning: The company combines strong asset turnover and solid gross margins with subscale profitability and negative free cash flow, positioning it behind peers that have achieved operating leverage but ahead of lower-quality operators on gross margin quality. Balance sheet leverage is moderate, but liquidity relies on inventory conversion more than cash.

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