INTRANCE CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥514M
• Operating Income: ¥-213M
• Net Income: ¥-196M
• EPS: ¥-5.13

Income Statement

Balance Sheet

Cash Flow Statement

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

For FY2026 Q2, Intras (3237) reported revenue of ¥514 million, up 36.1% YoY, indicating stronger top-line momentum despite continued losses. Gross profit was ¥284.7 million, and the reported gross margin of 55.4% points to high unit economics or a favorable sales mix. Operating income remained negative at ¥-213 million (flat YoY), reflecting heavy operating cost burden relative to scale. Ordinary income was ¥-237 million and net income ¥-238 million, with EPS at ¥-5.13, underscoring persistent bottom-line pressure. The DuPont bridge shows a net margin of -46.3%, asset turnover of 0.466x, and leverage of 2.21x, yielding a calculated ROE of -47.6%. The loss is primarily margin-driven rather than asset efficiency or leverage effects. EBITDA was ¥-211.4 million and the EBITDA margin -41.1%, consistent with an early-stage or subscale cost base and limited operating leverage realized to date. Operating cash flow (OCF) was ¥-240.2 million, broadly tracking the net loss (OCF/NI ratio ~1.01), suggesting losses are largely reflected in cash outflows rather than accrual distortions. Financing cash inflow of ¥289.1 million bridged the operating deficit, highlighting reliance on external funding in the absence of positive free cash flow. Balance sheet scale is modest with total assets of ¥1,104 million and total liabilities of ¥324 million; implied equity of ¥500 million suggests an equity ratio of roughly 45%, though the reported equity ratio field shows 0.0% (likely undisclosed in XBRL). Liquidity appears strong on headline ratios (current ratio 291%), driven by sizable current assets relative to current liabilities, though the absence of a reported cash balance tempers interpretation. Debt-to-equity is a moderate 0.65x, leaving some capital structure flexibility if funding markets remain accessible. No dividend was declared (DPS ¥0), appropriately conserving cash given negative earnings and operating cash flow. Notably, several items show as zero (e.g., cash and equivalents, inventories, investing cash flow, equity ratio, outstanding shares), which should be interpreted as unreported rather than true zeros per disclosure guidance. There is a numerical inconsistency between the stated revenue, cost of sales, and gross profit; we rely on the provided gross profit and margin as authoritative for analysis. Overall, the period shows improving revenue traction but insufficient scale to cover operating expenses, with cash burn funded by financing and a balance sheet that remains equity-heavy for now.

Profitability Analysis

ROE decomposition indicates margin as the primary drag: Net margin -46.3% × asset turnover 0.466 × financial leverage 2.21 = ROE -47.6%. The gross margin of 55.4% is robust for the scale, but the negative EBITDA margin of -41.1% and operating loss of ¥-213 million reveal that SG&A and other operating costs overwhelm gross profit. Estimated operating expense burden (SG&A and other) is roughly in the mid-¥400 millions for the half (implied by the gap between gross profit and operating income), signaling limited operating leverage at current revenue levels. Depreciation is minimal at ¥1.57 million, so the difference between operating income and EBITDA is small; the loss is driven by cash operating costs rather than non-cash charges. Interest expense is only ¥0.30 million, and interest coverage is deeply negative (-705x) due to negative EBITDA, but low absolute interest costs mean financial expenses are not a material driver of losses. Ordinary loss (¥-237 million) is close to operating loss, suggesting limited non-operating swings this period. The effective tax rate is effectively nil given losses (income tax ¥0.82 million against negative pretax), as expected. Overall profitability hinges on scaling revenue and reducing fixed cost intensity; gross margin quality appears sound but not yet converting to positive operating margin.

Growth Assessment

Revenue grew 36.1% YoY to ¥514 million, indicating meaningful top-line momentum. The combination of high gross margin (55.4%) and growth suggests a favorable mix or pricing, though data limitations prevent product/customer-level attribution. Profit growth is not yet evident: operating and net income remained negative and flat YoY at ¥-213 million and ¥-238 million, respectively, implying that incremental gross profit was offset by higher operating costs. With depreciation tiny, the path to profitability depends on SG&A discipline and revenue scale rather than asset intensity. Asset turnover at 0.466x (for this interim snapshot) points to modest efficiency; further growth could lift utilization, but industry cyclicality and project timing (common in real estate/asset business models) can cause volatility. The ordinary loss roughly tracking operating loss indicates limited reliance on non-operating gains to drive results, which is positive for quality but leaves little cushion. Outlook hinges on sustaining revenue growth while bending the cost curve; if growth persists at 30%+ and fixed costs stabilize, operating leverage could emerge in subsequent periods. However, current negative OCF and the need for financing inflows suggest execution risk if growth stalls or if working capital needs rise. No guidance is provided here; thus near-term trajectory should be assessed via order/backlog visibility, pipeline conversion, and SG&A run-rate control.

Financial Health

Total assets are ¥1,104 million, liabilities ¥324 million, and equity ¥500 million, implying an equity ratio around 45% (equity/total assets), despite an unreported equity ratio field. Debt-to-equity is 0.65x, indicating moderate leverage for a loss-making entity. Current assets of ¥715 million against current liabilities of ¥246 million yield a current ratio of 291% and a quick ratio equal to the current ratio due to unreported inventories; this suggests ample short-term coverage on paper. Cash and equivalents are unreported (0), limiting visibility into immediate liquidity; the strong current ratio may be driven by receivables or other current assets whose convertibility and timing are unknown. Working capital is ¥469 million, a sizable cushion relative to the quarterly/half-year burn rate, but quality depends on the composition of current assets. Interest burden is light (¥0.30 million), reducing refinancing risk from an interest cost perspective. Equity of ¥500 million provides a capital buffer, but sustained losses will erode it if not offset by capital raises or a pivot to profitability. The absence of investing cash flows this period (unreported or nil) suggests no large asset additions, keeping balance sheet expansion muted.

Cash Flow Quality

Operating cash flow was ¥-240.2 million versus net income of ¥-238.0 million, yielding an OCF/NI ratio of ~1.01. This indicates the loss is largely realized in cash, with limited favorable accruals masking performance. Depreciation is small (¥1.57 million), so earnings are not materially inflated by non-cash charges. Working capital dynamics are not disclosed in detail, but negative OCF suggests either weak cash conversion from sales or increases in operating assets (e.g., receivables, prepayments) and/or reductions in operating liabilities. Free cash flow is shown as 0 in the summary, but with OCF negative and investing CF shown as 0 (unreported), underlying FCF is likely negative for the period; we rely on the presented figure but note this limitation. Financing cash inflow of ¥289.1 million funded the operating cash deficit, implying dependence on external funding to sustain operations. Cash balance is unreported, so period-end liquidity cannot be verified from cash alone; monitoring subsequent quarter disclosures for cash, receivables, and payables will be important to assess sustainability.

Dividend Sustainability

Dividend per share is ¥0.00 with a payout ratio of 0.0%, consistent with negative earnings and negative operating cash flow. With ordinary income and net income both negative and OCF deeply negative, there is no current capacity to fund distributions from internal cash generation. The reported FCF coverage of 0.00x and absence of positive free cash flow further support a conservative stance. Capital allocation appears focused on financing operational needs rather than shareholder returns. Unless profitability and OCF improve, sustained dividends would not be supported by fundamentals; the current policy aligns with balance sheet preservation.

Risk Assessment

Business Risks:

• Execution risk in scaling revenue while controlling SG&A, given persistent operating losses
• Potential volatility from project timing or sales mix, which can impact revenue recognition and margins
• Customer concentration or deal-driven lumpiness typical of small-scale asset businesses (not disclosed here but inferred risk)
• Sensitivity to macro conditions, financing availability, and real estate market cycles (if applicable to the business model)

Financial Risks:

• Negative operating cash flow requiring ongoing access to external financing (¥289 million inflow this period)
• Erosion of equity base (¥500 million) if losses persist, pressuring capital adequacy
• Liquidity opacity due to unreported cash balance, increasing uncertainty about immediate funding headroom
• Potential working capital swings that could amplify cash burn despite reported high current ratio

Key Concerns:

• Sustained negative EBITDA and operating income despite strong gross margin
• Dependence on financing to cover cash burn with limited visibility on cash on hand
• Data inconsistencies between revenue, cost of sales, and gross profit; reliance on provided margin figures
• Limited disclosure on asset composition and working capital drivers

Investment Implications

Key Takeaways:

• Top-line growth of 36.1% YoY with a high reported gross margin of 55.4%, but insufficient to offset operating cost base
• ROE of -47.6% driven by deeply negative net margin; leverage and asset efficiency are secondary factors
• Operating cash outflows (~¥240 million) closely track accounting losses, indicating low accrual distortion
• Balance sheet shows moderate leverage (D/E 0.65x) and implied equity ratio of ~45%, offering some buffer
• Liquidity ratios appear strong, but unreported cash and inventories limit confidence in immediate liquidity assessment
• No dividend, appropriately conserving cash amid negative earnings and OCF

Metrics to Watch:

• Revenue run-rate and order/backlog visibility to assess sustainability of growth
• SG&A trajectory and operating leverage (EBITDA margin inflection)
• Operating cash flow and components (receivables, payables, other current assets/liabilities)
• Capital raising activity and financing terms given dependence on external funds
• Equity ratio and D/E evolution as losses accrue
• Cash and equivalents disclosure in subsequent filings

Relative Positioning: Within small-cap, loss-making issuers, the company exhibits stronger gross margins but weaker operating leverage, relying on financing to bridge negative OCF; balance sheet leverage is moderate relative to peers, though liquidity transparency is limited due to unreported 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