Delta-Fly Pharma,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥-831M
• Net Income: ¥-841M
• EPS: ¥-77.04

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

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: FY2026 Q2 was a weak quarter operationally with deep operating and net losses, sustained primarily by external financing inflows. The company reported operating loss of -8.31 (100M JPY) and ordinary loss of -8.40, with net loss at -8.41, translating to EPS of -77.04 JPY. Reported non-operating items were minimal (non-op income 0.00; non-op expenses 0.10), indicating losses are core-operating in nature rather than driven by financial items. Cash burn was heavy: operating cash flow was -10.67, outpacing the reported net loss, and was offset by financing cash flow of +9.09, implying reliance on capital markets to sustain operations. Liquidity at quarter-end shows current assets of 3.95 and cash of 3.39, against current liabilities of 1.57, yielding a current ratio of 252% and working capital of 2.38, which is adequate near term but thin relative to the burn rate. Balance sheet remains small with total assets of 5.08 and equity of 3.55; retained earnings are deeply negative at -99.31 reflecting accumulated deficits typical of pre-revenue biotech. Financial leverage is low to moderate (Assets/Equity 1.43x), and D/E is 0.44x, suggesting solvency is not the immediate issue—cash runway is. Margins cannot be benchmarked due to unreported revenue; however, the lack of non-operating buffers and the minimal D&A (0.01) underscore that losses are largely cash-cost driven. The OCF/NI ratio of 1.27x (both negative) signals cash burn exceeding accounting losses, often seen when R&D and working capital outlays are elevated. ROIC is flagged at -5,138.8%, reflecting large operating losses against a small invested capital base—an efficiency red flag, though not unusual for early-stage pipelines absent commercial revenue. With cash of 3.39 versus H1 OCF burn of -10.67, the implied standalone runway is short without continued financing or partnership inflows. No dividends are reported, appropriately conserving cash. Forward-looking, the company’s ability to secure additional financing and deliver clinical/regulatory milestones will be decisive; near-term execution risk remains high given scale of burn relative to the balance sheet. Data limitations (no revenue, SG&A, R&D, or capex detail) constrain deeper margin and cost-structure diagnostics, but the qualitative picture is consistent with a pre-revenue, development-stage biotech. Overall, the quarter underscores funding dependence and the need for catalysts to reduce cash burn or unlock non-dilutive funding. Investors should watch upcoming trial updates, grants/alliances, and any revisions to cash runway guidance.

Profitability Analysis

ROE decomposition (DuPont): ROE = Net Profit Margin × Asset Turnover × Financial Leverage. Net Profit Margin is not calculable given unreported revenue; Asset Turnover is also not calculable for the same reason; Financial Leverage is 1.43x (Assets 5.08 / Equity 3.55). Directionally, ROE is significantly negative given the net loss against positive equity; a rough point-in-time proxy using end equity suggests ROE in the negative triple digits, highlighting severe unprofitability typical of pre-revenue biotech. The component that changed most versus typical steady-state is the margin (losses at the operating line), not leverage or turnover. Business reason: continued R&D and operating outlays without product revenue or sizable non-operating gains. Sustainability: the loss profile is likely to persist until a monetization event (partnerships, milestone income) or commercialization; absent such events, the negative margin is ongoing rather than one-off. Concerning trends include cash OCF exceeding net loss (suggesting heavier cash outflows than accrual losses) and lack of offsetting non-operating gains. We cannot compare bps margin expansion/compression YoY due to unreported revenue and prior-period data; however, the quarter’s loss density implies no operating leverage realized.

Growth Assessment

Revenue sustainability cannot be assessed as revenue is unreported; current profile remains pre-commercial. Profit quality is low from a cash perspective, with OCF of -10.67 exceeding net loss of -8.41, indicating heavy cash consumption. Operating income of -8.31 and negligible non-operating help imply growth will depend on clinical progress or out-licensing rather than existing sales momentum. Outlook hinges on milestones: any licensing upfronts, grants, or collaboration income could meaningfully narrow losses; absent that, continued dilution risk remains. Without R&D detail, we cannot parse whether spend is peaking (late-stage trials) or steady; D&A is minimal (0.01), so fixed asset intensity is low.

Financial Health

Liquidity is adequate short term: Current Ratio 252% and Quick Ratio 252% (cash-driven) with current assets 3.95 vs current liabilities 1.57. There is no warning on Current Ratio (<1.0) or leverage (D/E 0.44x is below the 2.0 threshold). Maturity mismatch risk appears modest given current assets comfortably exceed current liabilities; however, the absolute cash balance (3.39) is small relative to the recent OCF burn, implying a short cash runway without additional financing. Noncurrent liabilities are unreported; interest-bearing debt is unreported, so the D/E here likely reflects total liabilities-to-equity, not net debt. Off-balance sheet obligations are not disclosed in the provided data.

Cash Flow Quality

OCF/Net Income is 1.27x (both negative), indicating cash burn exceeds reported losses, a potential quality concern but common in R&D-heavy models. Free cash flow cannot be computed due to unreported investing cash flows and capex, but D&A is de minimis (0.01), suggesting capex is probably limited; burn is primarily operating. Financing CF of +9.09 largely backstopped OCF of -10.67, signaling dependence on capital markets. Potential working capital drivers of OCF are unclear due to missing receivables/payables/inventories; we cannot rule out timing effects. No signs of aggressive working capital improvements (e.g., payables stretch) are observable from the limited data.

Dividend Sustainability

No dividends are reported, which is appropriate given negative earnings and cash burn. With net losses (-8.41) and negative OCF (-10.67), any dividend would be unsustainable. Policy-wise, a non-dividend stance is expected for a development-stage biotech until commercialization or recurring positive OCF. FCF coverage of dividends cannot be assessed but would be inadequate under current conditions.

Risk Assessment

Business Risks:

• Clinical development risk and binary trial outcomes impacting timeline and costs
• Regulatory approval risk delaying or preventing commercialization
• Dependency on partnerships or licensing to monetize assets
• Pipeline concentration risk given small scale

Financial Risks:

• Short cash runway with OCF burn of -10.67 in H1 against cash of 3.39
• Ongoing financing dependence; dilution risk from equity issuance
• Potential listing maintenance risk if equity erodes given large accumulated deficits (retained earnings -99.31)
• Limited non-operating income buffers and unreported debt profile

Key Concerns:

• ROIC extremely negative at -5138.8%, reflecting severe capital inefficiency pending revenue
• OCF more negative than net income (OCF/NI 1.27x), stressing cash
• Minimal non-operating income to offset operating losses
• Data gaps (revenue, SG&A, R&D) reduce visibility into cost drivers and scalability

Investment Implications

Key Takeaways:

• Core operating losses are substantial (-8.31) with little non-operating relief
• Cash burn (-10.67 OCF) outpaced net loss; financing inflow (+9.09) bridged the gap
• Liquidity is adequate on ratios but thin in absolute terms versus burn (cash 3.39 vs H1 OCF -10.67)
• Balance sheet remains light (assets 5.08; equity 3.55) with large accumulated deficit
• Execution hinges on securing non-dilutive funding or partnerships and delivering milestones

Metrics to Watch:

• Cash balance and monthly burn rate (OCF trend)
• Financing plans (equity issuance, warrants, grants) and dilution
• R&D expense trajectory and trial milestones by program
• Any reported revenue or upfront/milestone income from partnerships
• Updates on going-concern language and listing compliance indicators

Relative Positioning: Compared to JPN small-cap, pre-revenue biotechs, Delta-Fly Pharma exhibits a typical risk profile: high operating losses, reliance on external funding, and short cash runway. Leverage is contained, but burn relative to balance sheet is on the high side, placing it in the more funding-dependent cohort absent near-term catalysts.

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