Kokopelli Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥866M
• Operating Income: ¥-148M
• Net Income: ¥37M
• EPS: ¥-14.93

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

Kokopelli (4167) reported FY2026 Q2 consolidated results under JGAAP marked by a sharp top-line decline and continued operating losses, offset by strong liquidity and a light balance sheet. Revenue fell to ¥866 million (-17.7% YoY), indicating demand headwinds or deliberate pruning of lower-margin lines as the company adjusts its go-to-market approach. Despite the revenue contraction, the reported gross profit margin remained high at 65.2%, suggesting resilient unit economics for the core platform/services mix; however, there is a notable discrepancy between the reported gross profit and cost of sales that limits margin precision. Operating income was a loss of ¥148 million (roughly flat YoY), implying some cost containment or opex discipline that partially absorbed the revenue decline. Ordinary income was a loss of ¥147 million and net income a loss of ¥113 million, with EPS at -¥14.93. Depreciation and amortization were ¥60 million, and EBITDA was -¥87.94 million (-10.2% margin), indicating negative operating profitability before non-cash charges. On a DuPont basis, ROE was -6.24%, driven primarily by a negative net margin (-13.05%), low asset turnover (0.394x), and low financial leverage (1.21x), highlighting that leverage is not amplifying losses. Liquidity remains very strong: current assets of ¥1,570 million against current liabilities of ¥384 million produce a current ratio of 409%, with working capital at ¥1,187 million. Total assets were ¥2,196 million and total liabilities ¥526 million, implying an equity ratio of approximately 82% (calculated), even though the reported equity ratio field shows 0.0% (likely undisclosed). Operating cash flow was a positive ¥162 million despite the net loss, driven by non-cash items and/or working capital inflows; this is supportive in the short term but may not be repeatable. Investing cash flow and cash/equivalents were not disclosed in the XBRL (shown as 0), which limits visibility on capex and liquidity runway in cash terms, although the balance sheet suggests ample resources. Interest expense was minimal at ¥0.9 million, consistent with low leverage, but interest coverage is negative due to operating losses. The company paid no dividends (DPS ¥0), consistent with reinvestment and the current loss profile. Overall, Kokopelli maintains a solid financial position to support business restructuring or growth investments, but the key challenge remains stabilizing revenue and restoring operating profitability. Near-term priorities likely include improving sales efficiency, enhancing retention and ARPU on the platform, and managing development spend. Data gaps (notably cash, capex, and certain share data) necessitate caution in interpreting cash runway and per-share metrics.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: -13.05%
• asset_turnover: 0.394x
• financial_leverage: 1.21x
• calculated_ROE: -6.24%
• commentary: Negative ROE is primarily driven by a negative margin. Low leverage limits both downside and upside to ROE. Asset turnover is modest, consistent with a platform/SaaS model at Kokopelli’s current scale. margin_quality: Reported gross margin is high at 65.2%, suggesting favorable unit economics; however, the reported gross profit (¥564.7m) does not reconcile with revenue and cost of sales as presented, indicating potential classification differences. EBITDA margin is -10.2% and operating margin is -17.1% (operating loss ¥148m on revenue ¥866m), reflecting insufficient scale and/or elevated selling and development costs. operating_leverage: Operating loss remained roughly flat YoY despite a 17.7% revenue decline, implying meaningful fixed-cost reduction or mix improvements. This suggests positive near-term operating leverage potential if revenue stabilizes, but current scale remains below breakeven.

Growth Assessment

revenue_sustainability: Revenue contracted by 17.7% YoY to ¥866m, pointing to weaker demand, product transition, or partner/customer churn. Sustaining revenue will require improved client acquisition, retention, and upsell across bank/SME channels. profit_quality: Net loss of ¥113m and EBITDA loss of ¥88m indicate profitability pressure. The positive OCF suggests non-cash items and working capital release supported cash generation, which may not be structural. Margin recovery hinges on stabilizing subscription/recurring revenue and optimizing go-to-market costs. outlook: Near-term outlook is challenged by top-line pressure but aided by strong liquidity. If churn normalizes, partner productivity improves, and cohort ARPU lifts, operating leverage could narrow losses. Key to a turnaround will be ARR growth, retention, and efficient sales execution.

Financial Health

liquidity: Current assets ¥1,570.2m vs current liabilities ¥383.6m yields a 409% current ratio and sizeable working capital of ¥1,186.6m. Quick ratio mirrors current ratio due to undisclosed inventories. Cash and equivalents were not disclosed, limiting precision on cash runway. solvency: Total liabilities ¥525.9m vs equity ¥1,810.0m implies a calculated equity ratio of ~82% and low leverage (debt-to-equity 0.29x on an all-liabilities basis). Interest expense is low (¥0.9m), but negative operating earnings result in a negative interest coverage ratio. capital_structure: The balance sheet is equity-heavy with limited financial leverage, providing flexibility to absorb continued operating losses while pursuing growth initiatives.

Cash Flow Quality

earnings_quality: OCF of ¥162.1m against a net loss of ¥113.0m yields an OCF/NI ratio of -1.43 (sign inverted due to negative NI), indicating cash generation supported by non-cash charges (D&A ¥60.1m) and/or favorable working capital movements. This is supportive short term but may not be durable. FCF_analysis: Investing cash flow and capex are undisclosed (shown as 0), so free cash flow cannot be reliably determined despite a reported FCF placeholder of 0. Hence, FCF coverage assessments are limited. working_capital: Given the large working capital position and positive OCF, there was likely a release from receivables or other current assets, or an increase in payables/deferred revenue. Sustainability of this inflow is uncertain without detail on AR, AP, and deferred revenue.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0.00 with a payout ratio of 0%, appropriate given a net loss (EPS -¥14.93) and negative operating profitability. FCF_coverage: FCF is undisclosed; therefore, coverage ratios cannot be assessed. Even with positive OCF, the lack of capex data and ongoing losses suggest limited capacity for distributions. policy_outlook: Given the focus on reinvestment and path-to-profitability, dividends are unlikely near term until Kokopelli demonstrates sustained positive EBITDA/OCF and clearer FCF visibility.

Risk Assessment

Business Risks:

• Revenue contraction (-17.7% YoY) indicating potential demand softness, churn, or partner channel challenges.
• Customer acquisition and retention risk in SME-focused platform services; sensitivity to SMB IT spending cycles.
• Execution risk in scaling partnerships with financial institutions and enhancing monetization/ARPU.
• Competitive intensity in SaaS/fintech platforms and marketplaces.
• Product roadmap and development prioritization risk, including potential delays or misalignment with customer needs.

Financial Risks:

• Persistent operating losses and negative EBITDA.
• Dependence on working capital inflows for positive OCF; potential reversal in future periods.
• Limited visibility on cash and capex due to undisclosed items, complicating cash runway assessment.
• Potential for non-cash tax expense (e.g., valuation allowance impacts) despite losses.
• Negative interest coverage despite low leverage.

Key Concerns:

• Top-line stability after a double-digit revenue decline.
• Path to breakeven at EBITDA and operating income levels.
• Sustainability of positive operating cash flow absent working capital tailwinds.

Investment Implications

Key Takeaways:

• High reported gross margin (65.2%) but ongoing operating losses highlight the need for scale and cost discipline.
• ROE (-6.24%) is constrained by negative margins; low leverage limits downside but also return potential near term.
• Liquidity is robust (current ratio ~409%; working capital ~¥1.19bn) and solvency strong (calculated equity ratio ~82%).
• Positive OCF (¥162m) contrasts with negative EBITDA, implying working capital/non-cash support that may be non-recurring.
• Data gaps (cash, capex, equity ratio field, share data) restrict precision on FCF and per-share analytics.

Metrics to Watch:

• ARR growth, net revenue retention, and churn rates.
• ARPU/cohort monetization and upsell metrics via partner banks/financial institutions.
• Sales efficiency (CAC payback, LTV/CAC) and S&M intensity.
• Operating expense trajectory and progress toward EBITDA breakeven.
• Working capital drivers (receivables, payables, deferred revenue) and OCF excluding working capital.
• Capitalized development vs expensed R&D and potential impairment risk.

Relative Positioning: Versus TSE Growth-market SaaS/fintech peers, Kokopelli shows stronger balance-sheet resilience and liquidity but lags on scale and profitability, with recent revenue contraction contrasting with peers that, while decelerating, generally remain in modest growth.

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