BPLATS,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥336M
• Operating Income: ¥-66M
• Net Income: ¥-224M
• EPS: ¥-35.02

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

Bplats Inc. (4381) reported FY2026 Q2 consolidated results under JGAAP marked by declining revenue and continued operating losses, alongside positive operating cash flow driven by non-cash charges. Revenue was 336 million yen, down 8.2% YoY, indicating top-line pressure in the period. Gross profit was 45.9 million yen with a gross margin of 13.7%, which is thin for a software/services-oriented model and suggests a heavy cost base (infrastructure, partner fees, or service delivery costs) relative to revenue. Operating income remained negative at -66 million yen (essentially flat YoY), reflecting limited operating leverage at current scale. Ordinary income and net income were -76 million yen and -86 million yen, respectively, with EPS of -35.02. Despite the net loss, EBITDA was 60.9 million yen as depreciation and amortization were substantial at 126.9 million yen, implying significant historical investment in capitalized development or fixed assets. The DuPont framework shows a net margin of -25.6%, asset turnover of 0.309x, and financial leverage of 5.31x, resulting in ROE of -41.95%—losses magnified by high leverage. Total assets stood at 1,088 million yen and equity at 205 million yen (implying an equity ratio of about 18.8%), with liabilities of 803 million yen and a debt-to-equity ratio of 3.92x. Liquidity is tight: current assets were 195.3 million yen against current liabilities of 644.6 million yen, yielding a current ratio of 0.30x and negative working capital of -449.3 million yen. Operating cash flow was positive at 39.7 million yen, suggesting earnings quality supported by non-cash charges and/or favorable working capital timing; investing cash flow was not disclosed, and financing cash flow was +17.3 million yen. Interest expense was modest at 3.6 million yen, and EBIT-based interest coverage was negative, while EBITDA would cover interest if considered. No dividend was declared (DPS 0), appropriate given losses and liquidity constraints. The data set includes several reported zeros (e.g., cash & equivalents, investing CF, equity ratio, outstanding shares), which likely indicate non-disclosure rather than true zero values; analysis focuses on disclosed non-zero items and ratios that can be derived from them. Overall, the company remains sub-scale with weak profitability, high operating cost intensity, and constrained liquidity, partially offset by positive OCF and low cash interest burden. The near-term outlook hinges on stabilizing revenue, improving gross margin via cost discipline, and sustaining cash generation while addressing short-term obligations. Continued losses at the current leverage level could pressure equity, but re-acceleration of revenue and better margin mix could quickly improve operating results given the sizable non-cash D&A. Visibility on cash balances, capex/investing flows, and the composition of current liabilities (e.g., deferred revenue vs. financial debt) would materially refine the risk assessment.

Profitability Analysis

ROE decomposition: Net profit margin -25.6% × asset turnover 0.309 × financial leverage 5.31 = ROE -41.95% (consistent with reported). The negative margin is the dominant driver of poor ROE; leverage amplifies losses. Gross margin sits at 13.7%, indicating limited pricing power or high delivery costs in the current revenue mix. EBITDA margin of 18.1% contrasts with negative EBIT due to large D&A (126.9m), suggesting a business with heavy historical capitalization or amortization of intangibles. Ordinary income (-76m) trails EBITDA by 136.9m, reflecting both D&A and net non-operating costs. Interest expense is low at 3.6m, so financing costs are not the main headwind; core operating economics are. Operating leverage appears unfavorable at current scale: a modest revenue base (336m) is insufficient to cover fixed costs, leading to operating losses despite positive EBITDA. Margin quality looks weak given thin gross margins; any improvement will likely require cost optimization (hosting, third-party fees) and/or a higher-margin product mix. The flat YoY operating loss implies cost controls offset some revenue decline, but no inflection yet in profitability.

Growth Assessment

Revenue declined 8.2% YoY to 336m, indicating demand softness or churn/mix headwinds. With no disclosed segment or customer data, sustainability of revenue is uncertain; the low gross margin suggests current growth is not yet scaling efficiently. Profit quality is mixed: EBITDA positive on non-cash add-backs, but EBIT and net levels are negative, implying limited economic profitability today. The magnitude of D&A (126.9m) signals past investments; monetization and scaling are needed to translate that into operating income. Near-term outlook depends on stabilizing top line and expanding gross margin; even modest margin gains could materially improve EBIT given the cost structure. Absence of disclosed investing cash flows limits visibility into ongoing product development or capex intensity. If a meaningful portion of liabilities is deferred revenue (typical for subscription businesses), near-term revenue could be supported, but this is not disclosed. Overall growth trajectory appears stalled this quarter; a return to growth and better unit economics are prerequisites for improved profitability.

Financial Health

Liquidity is tight: current assets 195.3m vs. current liabilities 644.6m imply a current ratio of 0.30x and working capital of -449.3m. Quick ratio equals current ratio given no inventories disclosed. This suggests dependence on ongoing cash generation or external funding to meet near-term obligations. Solvency: liabilities total 803.0m against equity of 205.0m, yielding a debt-to-equity ratio of 3.92x and an implied equity ratio of ~18.8% (despite a reported 0.0% equity ratio likely being an undisclosed metric). Financial leverage of 5.31x (assets/equity) is high, increasing sensitivity to losses. Interest expense is modest (3.6m), indicating limited cash interest burden; interest-bearing debt split vs. non-interest liabilities is not disclosed. Ordinary loss and negative EBIT reduce buffers. The positive OCF provides some mitigation, but absent disclosure of cash on hand and debt maturities, liquidity risk remains elevated.

Cash Flow Quality

Operating cash flow was +39.7m despite a net loss of -86.0m, producing an OCF/NI ratio of -0.46 (negative numerator to negative denominator). This indicates cash generation supported by non-cash items (notably 126.9m D&A) and likely working capital movements. EBITDA of 60.9m aligns with positive OCF, suggesting reasonable conversion from pre-D&A earnings once working capital effects are considered. Investing cash flow was undisclosed (reported as 0), preventing free cash flow estimation beyond the provided placeholder; therefore, FCF cannot be reliably assessed. Financing inflow of +17.3m suggests some external funding support, but the nature (debt vs. equity) is not detailed. Working capital: current liabilities significantly exceed current assets, implying reliance on payables or deferred revenue; the durability of this funding source is unclear without line-item detail. Overall earnings quality is mixed—cash generation is better than accrual earnings due to heavy non-cash charges, but sustainability depends on maintaining working capital support and improving operating margins.

Dividend Sustainability

The company paid no dividend (DPS 0, payout ratio 0%), appropriate given net losses and liquidity constraints. With negative net income and tight working capital, distributable capacity is currently absent. FCF coverage cannot be assessed due to undisclosed investing cash flows; conservatively, dividend capacity is constrained until EBIT turns positive and liquidity improves. Absent a disclosed dividend policy update, we assume a continuation of a no-dividend stance in the near term while the firm prioritizes reinvestment and balance sheet stability.

Risk Assessment

Business Risks:

• Revenue decline (-8.2% YoY) indicating demand softness or churn risk
• Thin gross margin (13.7%) limiting pricing power and operating leverage
• High D&A suggests heavy historical investment with uncertain monetization
• Execution risk in scaling subscription/services model to profitability
• Potential customer concentration or contract renewal risk (not disclosed)

Financial Risks:

• Tight liquidity: current ratio 0.30x and negative working capital (-449.3m)
• High leverage: liabilities/equity 3.92x and implied equity ratio ~18.8%
• Negative EBIT leading to poor interest coverage on an EBIT basis
• Dependence on working capital funding or external financing
• Limited disclosure on cash balances, investing outflows, and debt maturities

Key Concerns:

• Sustained operating losses with no clear inflection yet
• Low gross margin constraining path to EBIT breakeven
• Data gaps on cash, capex, and liability composition reduce visibility

Investment Implications

Key Takeaways:

• Top line contracted 8.2% YoY to 336m; growth reacceleration is needed
• EBITDA positive (60.9m) but EBIT and net remain negative
• Gross margin is low at 13.7%, pressuring operating leverage
• Liquidity is strained (current ratio 0.30x; working capital -449.3m)
• Leverage is high (D/E 3.92x; leverage 5.31x), amplifying losses
• Operating cash flow positive (39.7m), supported by large D&A
• Interest burden modest (3.6m), but EBIT-based coverage is negative
• Dividend remains suspended; capital preservation is the priority

Metrics to Watch:

• Quarterly revenue growth and net retention
• Gross margin trajectory and cost of sales intensity
• Operating expense run-rate vs. revenue (path to EBIT breakeven)
• OCF sustainability and working capital movements
• Cash balance and liquidity headroom
• Composition of current liabilities (deferred revenue vs. interest-bearing debt)

Relative Positioning: Within Japan-listed small-cap software/service providers, Bplats appears sub-scale with weaker gross margins and tighter liquidity than peers that typically exhibit higher recurring gross margins and positive FCF at similar revenue levels; improving unit economics and balance sheet resilience are required to converge toward peer medians.

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