AnGes,Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥646M
• Operating Income: ¥-3.54B
• Net Income: ¥-7.16B
• EPS: ¥-13.63

Income Statement

Balance Sheet

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: Weak quarter with deep operating and ordinary losses outweighing modest revenue growth. Revenue rose 37.0% year over year to 6.46 (100M JPY), but SG&A of 43.00 dwarfed the top line, resulting in an operating loss of -35.42. Ordinary loss widened to -46.15, suggesting additional non-operating burdens beyond the small net non-operating loss disclosed. Profit before tax deteriorated further to -70.66, implying sizable extraordinary or other below-ordinary items. Net loss was -46.88 with basic EPS of -13.63 JPY, and total comprehensive loss was -37.11. Operating margin was approximately -548% (Operating Income/Revenue), underscoring a business model still in investment phase. Non-operating income and expenses were modest at 0.44 and 0.52 respectively; interest income was 0.03, highlighting minimal financial income contribution. The DuPont decomposition points to a -112.4% ROE driven by an extreme negative net margin (-725.7%), low asset turnover (0.098x), and moderate leverage (1.58x). Liquidity is adequate on paper with a current ratio of 236.1% and cash and deposits of 35.52, but the cash burn implied by the operating loss suggests a limited runway absent improvement or financing. Balance sheet shows total assets 66.12 and equity 41.72, but retained earnings of -512.03 signal accumulated deficits funded by paid-in capital (capital stock 401.38 and capital surplus 83.85). Debt-to-equity is reported at 0.58x, with interest-bearing debt unreported; current liabilities of 23.58 are well covered by current assets of 55.67. Earnings quality cannot be assessed rigorously given unreported operating cash flow; OCF/NI and FCF are not calculable. Gross margin, EBITDA, and detailed SG&A breakdown are unavailable, limiting margin diagnostics. Forward-looking, the company must either materially expand revenue or reduce cash operating costs to narrow losses, and it likely remains reliant on external funding. Near-term focus should be on cash runway, any extraordinary items behind the pre-tax swing, and progress/milestones that could unlock revenue or partnering income. Overall, the quarter reinforces execution and financing risks typical of pre-commercial biotech.

Profitability Analysis

ROE decomposition: ROE = Net Profit Margin × Asset Turnover × Financial Leverage = (-725.7%) × 0.098 × 1.58 ≈ -112.4%. The dominant driver of the negative ROE is the extreme negative net margin, not leverage or turnover. Net margin pressure stems from revenue of 6.46 versus SG&A of 43.00 and operating loss of -35.42; additional below-ordinary items further widened loss before tax to -70.66. Asset turnover of 0.098x reflects a balance sheet size (assets 66.12) far exceeding current commercial revenues, consistent with a pipeline-heavy, pre-commercial profile. Financial leverage at 1.58x is moderate and not the source of deterioration. Operating margin is approximately -548%; without prior-period margin data, basis-point expansion/compression cannot be quantified, but the absolute level indicates negligible operating leverage at current scale. The change appears structural to the current development phase rather than a one-time event; extraordinary items implied by the gap between ordinary loss (-46.15) and pre-tax loss (-70.66) may include non-recurring charges, but core operating losses are recurring until commercialization or cost reset. Concerning trends include SG&A far outpacing revenue scale; with revenue up 37% YoY (to 6.46), SG&A at 43.00 keeps operating leverage negative. Sustainability hinges on pipeline milestones, licensing income, or significant cost control.

Growth Assessment

Revenue growth of +37.0% YoY to 6.46 indicates some traction, but the base remains too small to absorb fixed costs. Non-operating contribution (0.44 income vs 0.52 expense) is negligible to offset operating losses. Ordinary loss (-46.15) and pre-tax loss (-70.66) suggest either impairment/extraordinary items or valuation losses, limiting quality of growth. With gross profit unreported and product mix unknown, assessing recurring versus milestone/licensing revenue is constrained. Near-term growth sustainability is uncertain; absent disclosed backlog or contracts, revenue appears insufficient to reach break-even without step-change catalysts. Outlook remains dependent on clinical, regulatory, or partnering milestones that can deliver non-dilutive income or scale revenues, and on cost containment.

Financial Health

Liquidity appears adequate: current assets 55.67 vs current liabilities 23.58 imply a current ratio of 236.1% and working capital of 32.09. Quick ratio mirrors current ratio given minimal inventories reported. No warning on Current Ratio (<1.0) or D/E (>2.0): D/E is 0.58x by the provided metric. Cash and deposits of 35.52 provide a buffer but are modest relative to the cumulative operating loss (-35.42) for the period. Maturity mismatch risk looks limited with current assets exceeding current liabilities; however, interest-bearing debt is unreported, and loan maturities cannot be assessed. Total equity is 41.72 (approx. 63% of assets), but retained earnings are deeply negative (-512.03), implying heavy reliance on paid-in capital. No off-balance sheet obligations are disclosed in the data provided.

Cash Flow Quality

Operating cash flow is unreported; OCF/Net Income and FCF cannot be calculated, limiting assessment of accrual quality. Given the operating loss (-35.42) and small revenue base, cash burn is likely material; cash and deposits of 35.52 suggest limited runway without improvement or financing. Working capital movements cannot be evaluated due to missing details (AR, inventory, AP changes beyond period-end balances). With capex unreported, FCF sustainability versus any dividend or capex commitments cannot be assessed. No clear signs of working capital manipulation can be identified from the limited data.

Dividend Sustainability

Dividends are unreported and, given the significant net loss (-46.88) and accumulated deficits (-512.03), distributions appear unlikely under a capital preservation stance. Payout ratio and FCF coverage are not calculable due to missing cash flow data. Policy-wise, a focus on funding R&D and maintaining liquidity is more consistent than initiating or sustaining dividends.

Risk Assessment

Business Risks:

• Commercialization risk: revenue (6.46) remains immaterial versus SG&A (43.00), delaying operating break-even
• Clinical/regulatory milestone uncertainty typical of biotech pipelines
• Dependence on partnerships or licensing to generate non-dilutive income
• Potential impairments or extraordinary losses as implied by pre-tax loss (-70.66)

Financial Risks:

• Cash runway risk: cash and deposits 35.52 vs large operating losses
• Equity dilution risk to fund ongoing operations given negative retained earnings (-512.03)
• Interest-bearing debt profile unknown; refinancing risk cannot be assessed
• Earnings volatility from non-operating and extraordinary items

Key Concerns:

• Extreme negative margins: operating margin ~ -548%, net margin -725.7%
• ROE -112.4% and ROIC flagged at -571.6% (capital efficiency concern)
• Ordinary-to-pre-tax loss gap suggests additional non-recurring charges not detailed
• Data gaps (OCF, capex, gross profit) constrain quality analysis

Investment Implications

Key Takeaways:

• Top line grew 37% YoY but remains far below the fixed cost base
• Core profitability highly negative; turnaround requires revenue step-up or cost reset
• Liquidity is adequate near term, but cash burn indicates potential financing needs
• Capital efficiency is very weak (ROE -112.4%, ROIC flagged), reflecting pre-commercial stage

Metrics to Watch:

• Operating cash flow and quarterly cash burn rate
• Cash and deposits trajectory vs current liabilities
• SG&A run-rate and any cost reduction initiatives
• Any disclosed extraordinary items bridging ordinary to pre-tax loss
• Pipeline milestones, licensing deals, and revenue composition
• Equity issuance or financing plans and potential dilution

Relative Positioning: Relative to profitable or late-stage peers, the company remains in an earlier, investment-heavy phase with significantly weaker margins and reliance on external funding; liquidity is better than distressed peers, but capital efficiency and earnings visibility are lower.

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