Amazia,inc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥2.84B
• Operating Income: ¥-361M
• Net Income: ¥-590M
• 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

Amazia (4424) reported FY2025 Q4 consolidated results under JGAAP showing sharp top-line pressure and continued operating losses, alongside a relatively solid short-term liquidity buffer. Revenue declined 20.7% year over year to ¥2,843 million, with gross profit of ¥963.8 million and a gross margin of 33.9%. Operating income remained in the red at ¥-361 million (essentially flat YoY based on the +0.0% notation), indicating cost actions broadly offset the revenue contraction but were insufficient to return the business to break-even. Ordinary income was ¥-357 million and net income was ¥-372 million, translating to a net margin of -13.1%. EPS was ¥-56.60, though share count figures were not disclosed in the dataset. DuPont analysis indicates a calculated ROE of -41.0%, driven by a net margin of -13.1%, asset turnover of 1.946x, and financial leverage of 1.61x. EBITDA was ¥-349.0 million, an EBITDA margin of -12.3%, reflecting low D&A (¥12.0 million) and an asset-light model. Operating cash flow was negative at ¥-451 million, with free cash flow at ¥-467 million after ¥-16 million of investing CF (assumed largely capex), highlighting ongoing cash burn. The OCF-to-net income ratio of 1.21 (both negative) suggests operating cash outflow exceeded the accounting loss, indicating working capital outflows and limited non-cash add-backs. On the balance sheet, total assets stood at ¥1,461 million, liabilities at ¥670.6 million, and equity at ¥907.0 million, implying a liabilities-to-equity ratio of 0.74x. Current liabilities were ¥663.4 million against current assets of ¥1,630.8 million, supporting a strong current ratio of 245.8% and working capital of ¥967.4 million. Notably, several items, including cash and cash equivalents, interest expense, equity ratio, and share count, appear as zero in the dataset and should be treated as unreported rather than actual zeros. There is also a presentation anomaly with current assets exceeding total assets, which likely reflects reporting classification or partial disclosure differences rather than a balance sheet inconsistency. The effective tax line shows ¥41.1 million despite a net loss, resulting in a 0.0% effective tax rate figure in the dataset, suggesting tax effects not captured in the summarized metrics. Overall, the company exhibits adequate short-term liquidity but sustained operating losses, cash burn, and a weak ROE profile. Sustained revenue stabilization, improved unit economics, and disciplined operating expense control will be critical to restoring profitability and preserving liquidity. Monitoring cash runway and the cadence of free cash flow improvements will be key in the coming quarters.

Profitability Analysis

ROE is deeply negative at -41.0%, decomposed into net margin -13.1%, asset turnover 1.946x, and financial leverage 1.61x. The primary drag is margin, as asset efficiency is comparatively solid for an asset-light digital/content business. Gross margin of 33.9% indicates reasonable value capture after content, platform, and direct costs, but operating margin of -12.7% underscores insufficient scale and/or elevated opex (e.g., content fees, marketing, platform costs, personnel). EBITDA margin of -12.3% mirrors operating margin given low D&A (¥12.0 million), suggesting limited depreciation-driven distortion and pointing to true operating underperformance rather than accounting. Operating income was flat YoY at ¥-361 million despite a 20.7% revenue decline, implying meaningful operating leverage improvement via cost savings or mix, but still short of break-even. Ordinary income of ¥-357 million is close to operating income, consistent with minimal financial income/expense recognition in the dataset. The net margin of -13.1% remains the core profitability constraint; tax line effects (¥41.1 million) and any non-operating items did not materially change the loss profile. Overall margin quality remains challenged; further cost discipline and revenue stabilization are needed to leverage the existing asset base.

Growth Assessment

Revenue fell 20.7% YoY to ¥2,843 million, indicating headwinds in user demand, monetization, or content pipeline. Despite the decline, operating loss was flat YoY, implying underlying cost actions or improved unit economics partially offset top-line pressure. Gross profit of ¥963.8 million and 33.9% gross margin suggests the core product retains monetization potential; however, opex is still too high for current scale. Given EBITDA of ¥-349.0 million and net margin of -13.1%, near-term profit recovery depends on either re-accelerating revenue (e.g., stronger content lineup, better ARPPU/ad yields) or deeper structural cost reductions. The improvement in operating leverage (flat operating loss on lower revenue) is a modest positive signal for profit quality if sustainable. Outlook hinges on stabilizing the user base and optimizing content/licensing economics; without revenue inflection or further opex rightsizing, profitability will remain pressured. The low D&A implies limited capacity constraints from tangible assets, so growth can scale through content and marketing efficiency if demand returns. Overall, revenue sustainability is uncertain given the double-digit decline, and profit quality remains weak until operating margins approach break-even.

Financial Health

Total assets amounted to ¥1,461 million, with total liabilities of ¥670.6 million and equity of ¥907.0 million, indicating moderate leverage (liabilities-to-equity of 0.74x). Current liabilities were ¥663.4 million, while current assets were reported at ¥1,630.8 million, yielding a strong current ratio of 245.8% and working capital of ¥967.4 million. Quick ratio is shown as 245.8% (inventories unreported), consistent with an asset-light model. The equity ratio is displayed as 0.0% in the dataset, which should be treated as unreported rather than zero. Interest expense is shown as 0 (unreported), and ordinary income closely tracks operating income, suggesting limited reliance on debt financing. Liquidity appears adequate in the near term, but persistent FCF deficits (¥-467 million) could erode the cushion over time. The relationship of current assets exceeding total assets likely reflects reporting classification differences; conclusions are based on the provided non-zero aggregates.

Cash Flow Quality

Operating CF of ¥-451 million versus net loss of ¥-372 million (OCF/NI = 1.21 with both negative) indicates cash outflows exceeded accounting losses, pointing to adverse working capital movements or limited non-cash charges to cushion OCF. D&A is small at ¥12.0 million, consistent with an asset-light model, so EBITDA and OCF are close proxies for underlying cash earnings, reinforcing the weak cash conversion. Free cash flow was ¥-467 million after ¥-16 million of investing CF (assumed largely capex), indicating ongoing cash burn. Given interest expense is unreported and likely limited, financing costs are not the main driver of cash usage. The negative OCF alongside declining revenue flags pressure on collections, prepayments/content advances, or lower deferred revenue (not disclosed), and should be monitored. Overall earnings quality is weak presently, with losses translating into material cash outflows, though the limited capex burden offers flexibility if operations improve.

Dividend Sustainability

The company paid no dividend (DPS ¥0.00) with a payout ratio of 0.0%. With free cash flow at ¥-467 million and operating losses, distributions are not supported by internal cash generation. Preservation of liquidity and restoration of profitability are likely priorities over shareholder returns in the near term. Any future resumption would depend on a sustained turnaround in operating margin and positive, consistent FCF. Policy visibility is limited given the absence of disclosed cash balance and the unreported equity ratio; conservative stance is appropriate until cash flow stabilizes.

Risk Assessment

Business Risks:

• Revenue contraction risk from user churn, competition, or weaker content pipeline
• Monetization risk due to changes in platform fees, ad yields, or ARPPU
• Content cost inflation and licensing/royalty pressure impacting gross margin
• Dependence on digital platforms/app stores and potential policy changes
• Execution risk in cost control and operating leverage realization
• Potential volatility in marketing efficiency and user acquisition costs

Financial Risks:

• Sustained negative FCF (¥-467 million) eroding liquidity over time
• Weak ROE (-41.0%) and persistent operating losses straining equity
• Working capital outflows contributing to OCF shortfalls
• Limited visibility on cash balance and equity ratio (unreported), complicating runway assessment
• Potential need for external financing if cash burn persists

Key Concerns:

• Top-line down 20.7% YoY with net margin at -13.1%
• Operating loss flat YoY despite revenue decline—improvement but still far from break-even
• OCF worse than net loss, signaling cash conversion pressure
• Dividend capacity absent until FCF turns sustainably positive
• Data limitations on cash, shares, and certain ratios (reported as zero) require caution

Investment Implications

Key Takeaways:

• Revenue declined 20.7% YoY to ¥2.84 billion; profitability remains negative at multiple levels
• ROE at -41.0% driven primarily by a -13.1% net margin despite decent asset turnover (1.946x)
• Operating loss flat YoY suggests some operating leverage improvement, but not enough to offset demand weakness
• FCF of ¥-467 million underscores continued cash burn despite low capex
• Short-term liquidity is adequate (current ratio 245.8%, working capital ¥967 million), but runway depends on curbing burn

Metrics to Watch:

• Revenue trajectory (sequential growth and YoY trend)
• Operating margin and EBITDA margin progression toward break-even
• Operating cash flow and free cash flow trend; cash runway
• Gross margin stability versus content/licensing cost dynamics
• Working capital movements (receivables, payables, advances/deferred revenue) where disclosed

Relative Positioning: Relative to domestic digital content/app peers on the TSE, Amazia exhibits weaker profitability and ROE, with moderate leverage and seemingly adequate near-term liquidity; success hinges on stabilizing revenue and improving operating leverage in an asset-light model.

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