Ficha (4052) FY2026 Q2 Earnings Report

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Executive Summary

Although Revenue continued to increase, the Operating Loss widened, with deteriorating profitability being the key takeaway from these results. Revenue was ¥2.0B (¥2.5B in the previous year, YoY+16.9%), while the Operating Loss was ¥-0.2B (¥-0.1B in the previous year), the Ordinary Loss was ¥-0.3B (¥-0.1B in the previous year), and the Net Loss was ¥-0.3B (¥-0.1B in the previous year), with losses widening across all metrics. The gross profit margin remained high at 74.8%; however, SG&A expenses exceeded gross profit, which was the direct cause of the operating loss.

Factors Affecting Performance

【Revenue】Revenue was ¥2.0B, representing a YoY increase of +16.9%. The Company operates as a single segment, the Image Recognition Software Development Business, whose business structure is significantly affected by the timing of project acceptance and revenue recognition. As no segment-level breakdown is disclosed, the increase in Revenue is considered to have been driven primarily by project progress.

【Profit and Loss】Cost of sales was ¥0.5B, resulting in gross profit of ¥1.5B and a high gross profit margin of 74.8%. However, SG&A expenses reached ¥1.8B (SG&A ratio of 87.3%), exceeding gross profit by ¥0.3B and resulting in an Operating Loss of ¥0.2B. Due to the recognition of non-operating expenses, the Ordinary Loss widened to ¥0.3B, resulting in a Net Loss of ¥0.3B, broadly in line with the loss before tax. Extraordinary income of ¥0.03B (gain on sale of non-current assets) had a minimal impact on profit and loss. These results represent an increase in Revenue accompanied by a decline in earnings, with losses widening despite higher Revenue.

Segment Analysis

The Company operates as a single segment, the “Image Recognition Software Development Business,” and disclosure of segment-level performance has been omitted.

Key Financial Indicators

【Profitability】The Operating Margin deteriorated to -12.2% from approximately -2.8% in the same period of the previous year, while the Net Profit Margin also deteriorated to -13.4%. Although the gross profit margin was high at 74.8%, the SG&A ratio of 87.3% exceeded it, resulting in losses at the operating level. Annualized ROE was -8.3%.【Cash Flow Quality】Operating Cash Flow (OCF) was ¥-0.7B, representing a cash outflow exceeding the Net Loss of ¥0.3B. The main factors were a ¥0.2B increase in trade receivables and contract assets and a ¥0.1B increase in work in process. Free Cash Flow was ¥-0.7B.【Investment Efficiency】Capital expenditures were ¥0.0B and negligible, while the majority of assets consisted of cash and deposits of ¥5.3B. Total asset turnover remained low, indicating room for improvement in capital efficiency.【Financial Soundness】The Equity Ratio was high at 95.7%, and liquidity was extremely strong, with current assets of ¥6.6B compared with current liabilities of ¥0.3B. On the other hand, retained earnings deteriorated to ¥-0.9B from ¥-0.6B in the previous year, indicating an increase in accumulated losses.

Cash Flow Analysis

Operating Cash Flow (OCF) was ¥-0.7B, representing a cash outflow exceeding the Net Loss of ¥0.3B. The main factors were a ¥0.2B outflow resulting from an increase in trade receivables and contract assets and a ¥0.1B outflow resulting from an increase in work in process, with the accumulation of working capital associated with project progress putting pressure on cash. Investing Cash Flow was ¥-0.0B, with capital expenditures remaining negligible, while Financing Cash Flow was also ¥-0.0B and was broadly flat, including share repurchases. As a result, Free Cash Flow was ¥-0.7B, and cash and deposits decreased from ¥5.9B at the end of the same period of the previous year to ¥5.3B. Although the Company has substantial financial flexibility due to its nearly debt-free financial structure, it will be necessary to monitor the pace of cash consumption if operating losses and increases in working capital continue.

Quality of Earnings

The current-period loss includes extraordinary income of ¥0.03B (gain on sale of non-current assets), but the amount is small and its impact on profit and loss is limited; the primary cause of the deficit lies in recurring operating performance. Non-operating income was small at ¥0.0B, including foreign exchange gains of ¥0.0B, and non-operating expenses were also negligible. Accordingly, the Ordinary Loss remained broadly in line with the Operating Loss. On the other hand, the ¥0.7B outflow in Operating Cash Flow significantly exceeded the Net Loss of ¥0.3B. The deterioration in working capital, reflected in increases in trade receivables and contract assets and work in process, consumed more cash than the accounting loss, which is an important consideration when evaluating earnings quality.

Earnings Forecast and Guidance

The full-year Company forecast is Revenue of ¥5.4B (YoY+8.7%), Operating Income of ¥0.2B, and Ordinary Income of ¥0.2B. Cumulative first-half Revenue of ¥2.0B represents progress of approximately 38.0% against the full-year forecast, remaining below the standard 50%. As the Company recorded an Operating Loss of ¥0.2B in the first half, an improvement in Operating Income of at least approximately ¥0.4B will be required in the second half. As of this quarter, there has been no revision to the earnings forecast, which remains weighted toward the second half.

Shareholder Returns

Both the Q2 dividend and the full-year dividend forecast are ¥0, resulting in an effective Payout Ratio of 0%. Share repurchases were also negligible at ¥-0.0B, and virtually no capital returns have been implemented at this time. Given that Free Cash Flow was a cash outflow of ¥-0.7B, the current no-dividend policy is consistent with a capital allocation policy that prioritizes maintaining financial flexibility.

Risk Factors

1. Dependence on a Single Business: The Company operates as a single segment, the Image Recognition Software Development Business, and shifts in the timing of project acceptance can significantly affect quarterly performance. The full-year progress rate of 38.0% reflects this risk.

2. Fixed-Cost Absorption Risk: SG&A expenses of ¥1.8B exceed gross profit of ¥1.5B. If project Revenue is not recognized as planned, insufficient absorption of fixed costs could result in continued or widening losses.

3. Deterioration in Working Capital: Increases in trade receivables, contract assets, and work in process have resulted in OCF outflows exceeding the Net Loss. If delays in project acceptance or deterioration in project profitability occur, cash consumption could accelerate.

Industry Benchmark (For Reference; Compiled by the Company)

Industry Benchmark (it_telecom)

Profitability and Returns

Profitability is significantly below the industry median, with both the Operating Margin and Net Profit Margin ranking in the lower tier of the industry.

Growth and Capital Efficiency

The Revenue growth rate is slightly below the industry median but remains near the lower bound of the IQR.

※Source: Compiled by the Company

Key Takeaways from the Results

1. The high gross profit margin of 74.8% and cash and deposits of ¥5.3B indicate available capacity in the business foundation; however, the structure in which SG&A expenses exceed gross profit is the direct cause of the operating loss.

2. To achieve the full-year forecast, the Company must accumulate Revenue recognition in the second half and significantly improve Operating Income. The first-half progress rate of 38.0% will serve as an indicator for monitoring the extent to which this assumption is being achieved.

3. OCF represents a cash outflow exceeding the Net Loss. Trends in working capital items such as trade receivables, contract assets, and work in process will be key points of focus in assessing future cash-generating capacity.

Theoretical Share Price (Reference Value)

Sensitivity: ¥809–¥856 at ±1% for the cost of equity, and ¥822–¥838 at ±0.1 for ω.

Notes:

• As forecast ROE is below the cost of equity, the theoretical value will be below book value per share.
• Net assets as of the end of the quarter are used (there is a timing difference from the full-year forecast).
• As net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual Income Model (Ohlson-type, explicit 5-year fade) / Interest rate reference month: 2026-07 / Mechanically calculated value based solely on publicly disclosed data; it is not a forecast of the market share price or a recommendation of any specific investment action, and does not predict or guarantee future share prices.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting a professional as necessary.

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