AI,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥810M
• Operating Income: ¥-37M
• Net Income: ¥5M
• EPS: ¥1.09

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

For FY2026 Q2, 株式会社エーアイ reported revenue of ¥810 million, up 21.1% year over year, indicating solid topline momentum. Gross profit was ¥410.9 million, translating to a gross margin of 50.7%, which is healthy for a software-centric model and suggests pricing and mix remained supportive. Despite the margin, operating income was a loss of ¥37 million, and ordinary income was a loss of ¥42 million, highlighting continued operating cost pressure. Net income, however, was positive at ¥6 million, implying non-operating items and/or tax effects outweighed the operating loss at the bottom line. EBITDA was negative at ¥23.1 million (−2.9% margin), indicating that even on a pre-D&A basis, the cost base remains above current revenue scale. The DuPont analysis shows a very low ROE of 0.28%, driven by a slim net margin of 0.74%, modest asset turnover of 0.329x, and low financial leverage of 1.14x. On the balance sheet, total assets were ¥2,461 million against total liabilities of ¥442 million, implying an equity-heavy capital structure; the implied equity ratio is approximately 88% (notwithstanding the disclosed equity ratio figure being unreported). Liquidity is strong with a current ratio of 595.7% and quick ratio of 594.6%, supported by minimal inventories of ¥3.9 million. Operating cash flow was negative at ¥15.7 million despite positive net income, resulting in an OCF/Net Income ratio of −2.62, signaling weak near-term earnings-to-cash conversion. Financing cash outflows were large at ¥334.0 million, suggesting capital returns or liability reductions, though the absence of dividends points more toward debt or other financing repayments; detailed breakdown was not disclosed. Free cash flow is not derivable from the period’s disclosed data because investing cash flows were unreported in XBRL (shown as zero). The company paid no dividend (DPS ¥0.00), consistent with a focus on reinvestment and liquidity preservation. Working capital is ample at ¥1,766 million, providing a buffer to navigate growth investments and potential volatility in collections. Overall, the quarter reflects successful revenue expansion and resilient gross margin but insufficient operating leverage to deliver operating profitability, and weak cash conversion in the period.

Profitability Analysis

ROE_decomposition: ROE 0.28% = Net margin 0.74% × Asset turnover 0.329× × Financial leverage 1.14×. The low ROE is primarily constrained by a very slim net margin and modest turnover, with little contribution from leverage given an equity-heavy balance sheet. margin_quality: Gross margin was 50.7% (¥410.9m GP on ¥810.0m revenue), consistent with a software/intangible-heavy offering. Operating loss of ¥37.0m implies SG&A of roughly ¥447.9m, equal to ~55.3% of revenue, indicating a cost base that continues to absorb the gross profit. EBITDA margin of −2.9% points to insufficient operating scale; depreciation and amortization were ¥13.9m (1.7% of revenue), suggesting non-cash costs are not the main driver of losses. operating_leverage: Revenue grew 21.1% YoY, yet operating remained in loss at −¥37.0m, indicating limited operating leverage realization in the period. To turn positive EBIT, the company needs either further gross profit gains (via mix/pricing) or tighter SG&A growth. Interest expense is minor (¥0.8m), so financial costs are not a material headwind.

Growth Assessment

revenue_sustainability: Topline grew to ¥810.0m (+21.1% YoY), a robust pace. The 50.7% gross margin suggests the mix supports monetization; however, sustainability will depend on maintaining demand and renewals while avoiding discounting pressure. profit_quality: Despite positive net income (¥6.0m), operating and ordinary losses indicate that bottom-line profitability was supported by non-operating factors. EBITDA negative (−¥23.1m) underscores that core profitability is not yet established. outlook: If revenue momentum persists and SG&A growth normalizes, operating leverage could improve. Absent a clear drop in the SG&A-to-sales ratio from ~55%, continued losses at the operating level remain a risk. Monitoring sequential revenue, gross margin stability, and SG&A discipline will be key to assessing the path to sustainable profitability.

Financial Health

liquidity: Current assets ¥2,121.7m vs. current liabilities ¥356.2m yields a current ratio of 595.7% and quick ratio of 594.6%, reflecting strong near-term liquidity. Inventories are negligible at ¥3.9m, reducing obsolescence risk. solvency: Total liabilities of ¥442.2m vs. equity of ¥2,168.0m imply low leverage; debt-to-equity is 0.20x. Interest expense is modest at ¥0.8m, and interest coverage appears negative due to negative EBITDA, but absolute interest burden is small. capital_structure: Implied equity ratio is approximately 88% (equity ¥2,168m / assets ¥2,461m). The company has ample balance sheet capacity to absorb near-term operating losses and invest for growth.

Cash Flow Quality

earnings_quality: OCF was −¥15.7m versus net income of ¥6.0m (OCF/NI −2.62), indicating weak cash conversion. With D&A of ¥13.9m, the negative OCF likely reflects working capital outflows and/or other non-cash adjustments offsetting reported earnings. FCF_analysis: Investing cash flows were not disclosed (shown as zero), so free cash flow cannot be reliably computed for the period. On an indicative basis, negative OCF suggests FCF pressure unless capex was minimal. working_capital: Working capital is ¥1,765.5m, providing operational flexibility. The OCF shortfall implies a period-specific build in receivables or other current assets; close tracking of DSO, unbilled receivables, and contract liabilities is warranted.

Dividend Sustainability

payout_ratio_assessment: Payout ratio is 0.0% as no dividends were paid (DPS ¥0.00). With net income positive but operating cash flow negative, a conservative payout stance is appropriate to preserve liquidity. FCF_coverage: FCF coverage cannot be assessed due to unreported investing cash flows; however, negative OCF suggests insufficient internal funding for distributions this period. policy_outlook: Given a focus on growth and the need to achieve consistent operating profitability and positive OCF, continuation of a no-dividend policy appears aligned with balance sheet and cash flow priorities.

Risk Assessment

Business Risks:

• Execution risk in achieving operating leverage while sustaining 20%+ revenue growth.
• Potential pricing or mix shifts that could pressure the 50.7% gross margin.
• Revenue concentration or project timing risk typical for software/service contracts (timing of deliveries and collections).
• Competitive intensity potentially raising customer acquisition costs and SG&A.

Financial Risks:

• Negative operating cash flow despite positive net income (OCF/NI −2.62).
• Operating and ordinary losses persisting, delaying breakeven.
• Large financing cash outflows (−¥334.0m) reducing financial flexibility if sustained.
• Interest coverage negative on EBITDA basis, though absolute interest cost is small.

Key Concerns:

• Sustained SG&A at ~55% of sales constraining operating profitability.
• Weak earnings-to-cash conversion this quarter.
• Dependence on non-operating items to achieve positive net income.

Investment Implications

Key Takeaways:

• Revenue growth strong at +21.1% YoY to ¥810m with a solid 50.7% gross margin.
• Operating loss (−¥37m) and negative EBITDA (−¥23m) show limited operating leverage to date.
• Net income positive at ¥6m, but quality is weak given negative OCF (−¥15.7m).
• Balance sheet is equity-heavy with implied ~88% equity ratio and low leverage (D/E 0.20x).
• Large financing outflow (−¥334m) occurred; details not disclosed in the provided data.
• Dividend remains suspended (DPS ¥0), consistent with reinvestment and liquidity preservation.

Metrics to Watch:

• SG&A-to-sales ratio vs. gross margin trajectory.
• Operating cash flow and working capital movements (DSO, contract liabilities).
• Sequential revenue growth and retention/renewal indicators if disclosed.
• Path to positive EBITDA and operating income.
• Details of financing cash flows and any changes in interest-bearing debt.

Relative Positioning: Relative to domestic software-oriented peers, the company exhibits competitive gross margins but remains subscale on operating profitability, offset by a very strong liquidity and equity position.

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