AltPlusInc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥2.90B
• Operating Income: ¥-467M
• Net Income: ¥-480M
• EPS: ¥-12.83

Income Statement

Balance Sheet

Cash Flow Statement

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

AltPlus Inc. (TSE:3672) reported FY2025 Q4 consolidated results under JGAAP showing top-line contraction and continued operating losses. Revenue was ¥2,897 million, down 17.6% YoY, indicating demand softness and/or title pipeline timing in its games/entertainment-related businesses. Gross profit was ¥214.9 million, implying a gross margin of 7.4%, which is thin for the sector and suggests high variable costs, discounting, or revenue mix pressure. Operating income was a loss of ¥467 million, broadly flat YoY, signaling limited progress in cost restructuring or monetization improvement. Ordinary loss narrowed modestly to ¥442 million, supported by a slight net positive in non-operating items. Net loss was ¥434 million (EPS -¥12.83), translating to a calculated ROE of -42.84% driven by a negative margin and relatively high asset turnover. DuPont metrics show net margin of -14.98%, asset turnover of 1.659x, and financial leverage of 1.72x, confirming that profitability rather than efficiency or leverage is the main drag on equity returns. Operating cash flow was an outflow of ¥573 million, exceeding the accounting loss and pointing to cash burn from working capital or cash expenses not captured in EBIT. Free cash flow was -¥554 million, partially offset by ¥651 million of financing inflows, which funded operations. Liquidity looks adequate on reported ratios (current ratio 187%, quick ratio 187%) and working capital of ¥662.7 million, although the reported cash balance was not disclosed; we therefore treat cash liquidity cautiously. The balance sheet shows total assets of ¥1,746 million and equity of ¥1,013 million; while the reported equity ratio is 0.0% (undisclosed), our computed equity ratio is approximately 58%, indicating moderate leverage. Debt-to-equity is 0.75x based on total liabilities to equity, suggesting manageable solvency risk assuming liabilities are largely operating in nature. EBITDA was -¥464.5 million with D&A of only ¥2.5 million, indicating losses are primarily operating and cash-based rather than driven by non-cash charges. The dividend remains suspended (DPS ¥0), appropriate given negative earnings and FCF. Overall, the quarter underscores weak margin quality, negative operating leverage, and reliance on external financing to bridge cash burn. Key sensitivities are revenue stabilization, gross margin uplift from mix/monetization, and successful cost control. Data caveat: several items were unreported (e.g., cash and equivalents, interest expense, equity ratio), so interpretations rely on provided non-zero figures and derived calculations.

Profitability Analysis

ROE_decomposition: ROE = Net Margin × Asset Turnover × Financial Leverage = (-14.98%) × 1.659 × 1.72 ≈ -42.84%. The negative net margin is the dominant driver of the negative ROE; asset turnover is relatively high for a content/IP-light model, and leverage is moderate. margin_quality: Gross margin of 7.4% (¥214.9m / ¥2,897m) is very low, implying limited pricing power and/or high platform/royalty/outsourcing costs. Operating margin of -16.1% (¥-467m / ¥2,897m) shows SG&A and development spend are not covered by current scale. Ordinary margin of -15.3% benefits from slight non-operating income. Net margin of -15.0% reflects limited tax burden and low non-cash charges. operating_leverage: Revenue declined 17.6% YoY while operating loss remained around ¥-467m, indicating negative operating leverage—fixed costs were not sufficiently reduced to offset revenue pressure. D&A is minimal (¥2.5m), so EBIT changes largely reflect operating cash costs rather than accounting effects.

Growth Assessment

revenue_sustainability: Revenue of ¥2,897m fell 17.6% YoY, pointing to weaker title performance, aging portfolio monetization, or delays in launches. With asset turnover at 1.66x, the company is efficiently utilizing assets, but revenue stability is not yet evident. profit_quality: EBITDA of ¥-464.5m and net loss of ¥-434m signal poor earnings quality, with losses stemming from core operations. Low D&A suggests limited deferrable costs; thus, profitability recovery depends on improving gross margin and SG&A efficiency rather than accounting normalization. outlook: Near-term outlook hinges on pipeline execution, live-ops monetization, and cost discipline. Without a visible catalyst to lift gross margin above the low teens, sustaining profitability will be challenging. Monitoring quarterly bookings, ARPUs, and title churn will be critical to gauge stabilization.

Financial Health

liquidity: Current assets ¥1,422.2m vs current liabilities ¥759.6m imply a current ratio of 187% and working capital of ¥662.7m. Quick ratio equals current ratio due to no inventories reported. Cash and equivalents were not disclosed; therefore, liquidity quality cannot be fully assessed despite healthy ratios. solvency: Total liabilities ¥763.8m versus equity ¥1,013.0m imply a computed equity ratio of ~58% (contrary to the 0.0% placeholder) and debt-to-equity of ~0.75x. Interest expense was undisclosed (0 shown), and interest coverage is reported as 0.0x; based on negative EBITDA, coverage would be weak if interest-bearing debt exists. capital_structure: Assets ¥1,746m funded 58% by equity and 42% by liabilities. Ordinary loss being close to operating loss indicates limited exposure/benefit from financial items; financing dependence is evident through cash inflows this period.

Cash Flow Quality

earnings_quality: OCF of ¥-573m versus net loss of ¥-434m (OCF/NI = 1.32 on absolute values) indicates cash burn exceeding accounting loss, likely from working capital outflows or cash operating costs not capitalized. Minimal D&A (¥2.5m) underscores that losses are not driven by non-cash charges. FCF_analysis: Free cash flow was ¥-554m (OCF -573m + Investing CF +19m). Investing cash flow was a net inflow, suggesting limited capex or asset disposals; sustainability of positive investing CF is uncertain. working_capital: With no inventories reported and high current assets, the cash conversion cycle depends on receivables and payables, which were not disclosed. The negative OCF suggests receivable build or payables reduction; monitoring DSO/DPO will be important.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0 and payout ratio 0%. Given net loss (¥-434m) and negative FCF (¥-554m), there is no capacity for distributions without external funding. FCF_coverage: Dividend FCF coverage is 0.00x; even if a token dividend were considered, it would not be covered by internally generated cash. policy_outlook: Maintaining dividend suspension is prudent until the company restores positive EBITDA/OCF and stabilizes margins. Any policy change likely awaits visible profitability and FCF inflection.

Risk Assessment

Business Risks:

• Title concentration and hit-driven volatility in gaming/entertainment revenues
• Weak gross margin (7.4%) exposing earnings to small revenue shocks
• Execution risk on new launches and live-ops monetization
• Platform fee/royalty and outsourcing cost inflation
• Competitive intensity and user acquisition cost pressures
• Dependence on external partners/IP licensors

Financial Risks:

• Negative OCF (¥-573m) necessitating continued financing inflows
• Limited visibility on cash balances due to undisclosed cash and equivalents
• Potential refinancing/liquidity risk if financing access tightens
• Low interest coverage given negative EBITDA
• Working capital swings impacting cash burn

Key Concerns:

• Sustained operating losses (EBIT ¥-467m) with declining revenue
• Very low gross margin, indicating structural cost/mix issues
• Reliance on financing inflows (¥651m) to fund negative FCF
• Data limitations (e.g., cash, interest details) constrain precise liquidity stress testing

Investment Implications

Key Takeaways:

• ROE of -42.84% is driven by a -14.98% net margin despite decent asset turnover
• Revenue contracted 17.6% YoY; stabilization is needed to improve operating leverage
• Gross margin at 7.4% highlights urgent need for mix/pricing or cost restructuring
• OCF burn of ¥-573m exceeded net loss, pressuring cash despite working capital headroom
• Balance sheet leverage moderate (computed equity ratio ~58%, D/E ~0.75x), but cash visibility is limited
• Dividend appropriately suspended until earnings and FCF turn positive

Metrics to Watch:

• Quarterly gross margin and ARPU/ARPDAU trends
• Title pipeline milestones, bookings, and retention metrics
• EBITDA trajectory and OPEX run-rate
• OCF and FCF inflection; DSO/DPO to gauge working capital
• Financing activities and cash runway (once cash is disclosed)
• Non-operating items and any interest-bearing debt details

Relative Positioning: Within Japan-listed small-cap gaming/entertainment peers, AltPlus currently underperforms on profitability and cash generation, while operating with moderate leverage; a turnaround would require clear evidence of pipeline-driven revenue stabilization and sustained margin repair.

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