enish,inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥1.68B
• Operating Income: ¥-652M
• Net Income: ¥-900M
• EPS: ¥-28.91

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Disclaimer

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

AI Financial Analysis

Executive Summary

enish (single-entity, JGAAP) reported FY2025 Q3 results showing significant revenue contraction and persistent losses. Revenue was ¥1,680 million, down 32.1% YoY, indicating demand softness and/or title underperformance in its games portfolio. Gross profit was negative at ¥−23.5 million, implying a gross margin of −1.4%, which is unusually weak and suggests either heavy cost of services, higher platform fees/royalties, or timing effects in cost recognition. Operating loss was ¥−652 million (flat YoY per disclosure), underscoring limited operating leverage on a shrinking top line. Ordinary loss came in at ¥−643 million, with interest expense of ¥34.0 million indicating some financial costs despite the firm’s modest balance sheet scale. Net loss was ¥−900 million (flat YoY per disclosure), resulting in EPS of ¥−28.91, reinforcing continued dilution of equity through retained losses. DuPont analysis highlights a net margin of −53.6%, asset turnover of 1.12x, and financial leverage of 2.09x, producing a severely negative ROE of −125.7%. The negative gross margin coupled with a large operating loss points to structural profitability issues rather than a one-off variance. Liquidity appears adequate on headline ratios, with current ratio at 171.5% and working capital of ¥621 million, but the lack of disclosed cash details constrains clarity on immediate funding flexibility. The balance sheet shows total assets of ¥1,500 million, liabilities of ¥871 million, and equity of ¥716 million; based on these figures, the computed equity ratio would be roughly 47.7% (while the disclosed equity ratio field shows 0.0%, which the company likely did not report in XBRL). Interest coverage is deeply negative at −19.2x, reflecting ongoing operating losses. Dividend policy remains conservative with DPS at ¥0, consistent with loss-making status and the need to preserve resources. Cash flow statements were not disclosed (zeros indicate unreported), limiting insight into cash burn, working capital movements, and free cash flow coverage. Overall, fundamentals reflect a hit-driven business under pressure, with declining sales, negative gross margin, and substantial operating losses. Near-term recovery hinges on new title performance, monetization efficiency, and cost discipline. Data limitations are material, particularly around cash flow and cash balances, necessitating caution when interpreting liquidity and sustainability.

Profitability Analysis

ROE_decomposition: Net profit margin (−53.6%) x Asset turnover (1.12x) x Financial leverage (2.09x) = ROE approximately −125.7%. The largest drag comes from the very negative margin; asset turnover is modestly healthy for a content business, while leverage modestly amplifies losses. margin_quality: Gross margin of −1.4% indicates revenue did not cover direct costs (platform fees, royalties, server/hosting, and direct development amortization if any). Operating loss of ¥−652 million suggests sizable fixed costs (personnel, development, G&A) against a shrinking revenue base. Ordinary loss of ¥−643 million indicates minimal non-operating offset and the burden of interest expense (¥34 million). operating_leverage: Revenue fell 32.1% YoY while operating loss remained large, implying unfavorable operating leverage; the cost base appears insufficiently flexible. Without improved title performance or further cost realignment, losses may persist.

Growth Assessment

revenue_sustainability: At ¥1,680 million (−32.1% YoY), revenue momentum is weak, likely reflecting the hit-driven nature of mobile games and aging title cycles. Sustainability is uncertain absent successful new launches or stronger live-ops monetization. profit_quality: Negative gross margin and large operating loss indicate low-quality earnings with limited resilience. Ordinary loss close to operating loss suggests core operations drive the deficit rather than one-off items. outlook: Recovery depends on launch cadence, user acquisition ROI, and monetization metrics (ARPDAU, conversion). With current margin structure, incremental revenue must be substantial to return to breakeven. Visibility is low due to missing cash flow data and lack of disclosed pipeline detail in this dataset.

Financial Health

liquidity: Current ratio 171.5% and working capital ¥620.8 million suggest short-term coverage is adequate. Quick ratio matches current ratio (171.5%), as inventories are unreported. However, actual cash and equivalents are not disclosed, limiting certainty around near-term liquidity. solvency: Total liabilities ¥871 million vs. total equity ¥716 million implies leverage but not excessive on book terms; computed equity ratio is approximately 47.7% (based on reported totals), despite the reported equity ratio field showing 0.0% (unreported). Interest coverage is −19.2x due to operating losses, highlighting solvency pressure if losses persist. capital_structure: Debt-to-equity ratio 1.22x indicates meaningful leverage relative to equity. Financial leverage in DuPont (2.09x) modestly magnifies outcomes. With negative earnings, refinancing and covenant flexibility could become relevant if debt includes covenants.

Cash Flow Quality

earnings_quality: Cash flow details are undisclosed (OCF reported as 0 indicates unreported), so accrual versus cash earnings cannot be assessed. The negative gross and operating margins suggest weak underlying earnings quality. FCF_analysis: Free cash flow is not available due to missing OCF and capex data. Given losses, FCF risk is elevated unless working capital releases or low capex offset cash burn. working_capital: Current assets are ¥1,488 million and current liabilities ¥868 million. Without a breakdown (cash, receivables, payables), the timing of cash inflows/outflows and sustainability of working capital support cannot be judged.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0 and payout ratio 0.0%, which is appropriate given a net loss of ¥−900 million. There is no capacity to distribute earnings under current conditions. FCF_coverage: FCF coverage cannot be assessed as OCF and capex were not disclosed. With operating losses and negative interest coverage, distributions would not be prudent. policy_outlook: Continuation of a no-dividend policy appears likely until profitability and cash generation improve; priority should remain on funding operations and development.

Risk Assessment

Business Risks:

• Hit-driven revenue model and title concentration risk in mobile gaming
• User acquisition cost inflation and platform fee pressure
• Monetization risk (ARPDAU, conversion, churn) amid competitive market
• Dependence on licensed IPs and associated royalty structures
• Execution risk on new title development and live-ops
• Regulatory or platform policy changes impacting monetization

Financial Risks:

• Sustained operating losses leading to equity erosion (ROE −125.7%)
• Negative interest coverage (−19.2x) and potential refinancing/covenant risk
• Liquidity uncertainty due to undisclosed cash balances and cash flow data
• Potential need for external financing or equity issuance if cash burn persists

Key Concerns:

• Negative gross margin (−1.4%) suggesting structural cost/revenue misalignment
• Significant net loss (¥−900 million) against modest equity base (¥716 million)
• Revenue down 32.1% YoY with unclear pipeline visibility

Investment Implications

Key Takeaways:

• Top line contracted sharply to ¥1.68 billion (−32.1% YoY).
• Gross margin turned negative (−1.4%), indicating severe margin stress.
• Operating and ordinary losses remained sizable (¥−652 million and ¥−643 million).
• ROE is deeply negative at −125.7% driven by margin compression.
• Liquidity ratios are acceptable on paper, but cash details are missing.
• Debt-to-equity at 1.22x and negative interest coverage increase financial risk.
• Dividend suspended (DPS ¥0), appropriate given losses.

Metrics to Watch:

• Cash and equivalents balance and monthly cash burn rate
• Operating cash flow trend and working capital movements
• Title pipeline milestones and bookings/MAU/ARPDAU
• Cost optimization progress (personnel and marketing)
• Interest-bearing debt levels and covenant headroom
• Gross margin normalization and operating breakeven timeline

Relative Positioning: Within Japan’s mobile gaming cohort, enish appears on the weaker end in near-term fundamentals, given negative gross margin, sharp revenue decline, and persistent losses; recovery hinges on new hit titles and improved monetization efficiency.

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