Amazia,inc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥2.84B
• Operating Income: ¥-361M
• Net Income: ¥-373M
• EPS: ¥-56.60

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

Verdict: FY2025 Q4 was weak, with a sharp topline decline driving an operating loss and negative free cash flow despite a still-solid liquidity position. Revenue fell to 28.43, down 20.7% YoY, underscoring pressure on the core business. Gross profit was 5.76, implying a gross margin of 20.3%, while SG&A of 9.37 exceeded gross profit, resulting in operating income of -3.61 and ordinary income of -3.57. Net income was -3.72 (EPS -56.60 JPY), with total comprehensive income at -3.73. Operating margin was approximately -12.7% (operating loss of -3.61 on revenue of 28.43). Non-operating items were small (income 0.04, expenses 0.01), so losses primarily stem from core operations. Cash flow from operations was -4.51, worse than net loss, leading to free cash flow of -4.67 after modest capex (-0.01). Liquidity remains adequate: current assets 11.36 vs current liabilities 5.43 (current ratio 209%), and cash 4.61 plus receivables 5.02 provide coverage for near-term obligations. Balance sheet leverage is moderate (reported D/E 0.61x), with total equity of 9.07 against total liabilities of 5.54. ROE is deeply negative at -41.0%, driven by a -13.1% net margin despite relatively high asset turnover of 1.946 and moderate leverage of 1.61x. Reported ROIC of -80.9% signals very poor capital efficiency this quarter. Earnings quality is mixed: OCF/NI of 1.21x is technically above the 1.0 benchmark, but both are negative and OCF burn is significant. Margin comparison vs prior periods cannot be quantified due to lack of YoY margin disclosure; however, the present gap between gross margin (20.3%) and operating margin (-12.7%) indicates heavy fixed cost absorption and limited variable cost flexibility. Forward-looking, the company must either restore revenue growth or right-size SG&A to return to breakeven, while carefully managing cash burn and receivables. With dividends unreported and losses ongoing, shareholder returns likely hinge on a turnaround in unit economics and monetization. The overall picture suggests urgency in cost controls and revenue stabilization to protect equity and preserve cash.

Profitability Analysis

ROE decomposition (DuPont): ROE = Net Profit Margin × Asset Turnover × Financial Leverage = (-13.1%) × 1.946 × 1.61 ≈ -41.0%. Component assessment: the largest drag is the negative net margin given operating losses; asset turnover is relatively strong at 1.946, and leverage is moderate at 1.61x. Business drivers: a 20.7% YoY revenue decline compressed scale, SG&A (9.37) exceeded gross profit (5.76), and non-operating items were negligible—pointing to core monetization pressure and inadequate cost flexibility. Sustainability: without near-term cost rationalization or revenue recovery, margin weakness is likely to persist; asset turnover may deteriorate further if assets are maintained while revenue remains soft. Margin quality: gross margin is 20.3%, but operating margin is -12.7%, indicating negative operating leverage; SG&A intensity is 33.0% of revenue and, more importantly, 162.7% of gross profit. Concerning trends: SG&A exceeding gross profit and the sharp net loss driving ROE to -41.0% are red flags; we cannot confirm whether SG&A grew faster than revenue due to missing YoY SG&A data.

Growth Assessment

Top-line contracted 20.7% YoY to 28.43, reflecting demand softness and/or competitive pressure. Mix/quality: non-operating contributions (0.04) were immaterial, so profit relies on core operations. Given the gross margin of 20.3% and negative operating margin, current scale is insufficient to cover fixed costs, suggesting either user monetization pressure or elevated content/marketing costs. No segment/ARPU/MAU disclosures were provided, limiting granularity on growth drivers. Outlook hinges on stabilizing revenue run-rate, improving take rates with partners, and tightening marketing and G&A. Absent evidence of cost reduction or pricing power, a near-term return to profitability appears challenging. Any recovery path likely requires marketing efficiency gains, content procurement optimization, or product changes to boost conversion and retention.

Financial Health

Liquidity: current assets 11.36 vs current liabilities 5.43 yields a current ratio of 209.1% (healthy). Quick ratio is also 209.1% given no inventories reported. Cash of 4.61 covers ~85% of current liabilities; adding receivables (5.02) provides ample near-term coverage. Solvency: total liabilities 5.54 vs equity 9.07 implies moderate leverage (reported D/E 0.61x). No explicit interest-bearing debt was disclosed; interest coverage is not calculable. Maturity mismatch: current liabilities (5.43) are well covered by current assets (11.36), reducing refinancing risk. Off-balance sheet: no disclosures provided; cannot assess lease/commitment exposures. Warning thresholds: Current Ratio > 1.5 (pass); D/E < 2.0 (pass). Overall, liquidity is sound despite losses, but sustained OCF burn would erode the cushion over time.

Cash Flow Quality

OCF was -4.51 vs net income -3.72, giving OCF/NI of 1.21x, which clears the >1.0 benchmark but is not comforting since both are negative. FCF was -4.67 after minimal capex (-0.01), indicating cash burn is driven by operations rather than investment outlays. Working capital: receivables are sizable at 5.02 relative to revenue; without period-over-period changes, we cannot confirm AR build, but any elongation in collection would pressure OCF. No signs of aggressive capitalizing of costs are observable from the provided data; however, many line items are unreported, limiting quality checks. Sustainability: with negative OCF and minimal investing needs, FCF depends on rapid operating turnaround; otherwise cash will trend down, potentially necessitating external funding.

Dividend Sustainability

Dividend data are unreported this period. Given net loss (-3.72) and negative FCF (-4.67), internal funding capacity for dividends appears constrained. Payout ratio and FCF coverage cannot be calculated. Policy outlook: absent profits and with cash burn, maintaining or initiating dividends would likely be deprioritized in favor of liquidity preservation unless a turnaround materializes.

Risk Assessment

Business Risks:

• Revenue contraction of 20.7% YoY indicates market share or demand pressure.
• Low gross margin (20.3%) relative to SG&A intensity leads to negative operating leverage.
• Content/licensing cost inflation risk that can compress gross margin in digital media.
• Platform dependency risk (e.g., app stores, distribution channels) affecting fees and terms.
• Competitive intensity in digital comics/apps potentially driving higher marketing spend and lower ARPU.

Financial Risks:

• Sustained OCF burn (-4.51) and FCF deficit (-4.67) could weaken the cash position over coming quarters.
• Negative ROE (-41.0%) and ROIC (-80.9%) signal destruction of equity value if unaddressed.
• Receivables concentration/collection risk given AR of 5.02 vs cash 4.61.
• Potential need for external financing if losses persist (equity dilution risk).

Key Concerns:

• SG&A (9.37) exceeds gross profit (5.76), necessitating cost actions or revenue recovery.
• Operating margin -12.7% with limited contribution from non-operating gains.
• Earnings and cash flow both negative, pressuring runway despite currently healthy liquidity.
• Limited disclosure on debt terms, leases, and off-balance sheet commitments.

Investment Implications

Key Takeaways:

• Core operations drove the loss; non-operating items were negligible.
• Liquidity is currently adequate (current ratio 209%), but cash burn is material.
• ROE (-41.0%) and ROIC (-80.9%) highlight urgent need for profitability improvements.
• Revenue decline (-20.7% YoY) and margin compression indicate competitive/monetization challenges.
• Cost structure misaligned with scale as SG&A exceeds gross profit.

Metrics to Watch:

• Monthly active users/ARPU and revenue growth trajectory.
• Gross margin and content/licensing cost ratio.
• SG&A run-rate and marketing efficiency (CAC, payback).
• Accounts receivable days and OCF trend.
• Cash balance vs quarterly burn rate.
• Operating margin and breakeven revenue level.

Relative Positioning: Underperforms domestic internet content peers on recent growth and profitability, yet maintains a stronger-than-feared liquidity buffer; recovery depends on restoring monetization and tightening costs.

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