Kringle Pharma,Inc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥72M
• Operating Income: ¥-909M
• Net Income: ¥-916M
• EPS: ¥-133.92

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

Kringle Pharma (4884) reported FY2025 Q4 single-entity JGAAP results characterized by pre-commercial R&D-stage financials: small revenue (¥72m, -9.8% YoY) and a substantial operating loss (¥-909m, roughly flat YoY). Ordinary loss (¥-914m) and net loss (¥-916m; EPS ¥-133.92) reflect limited non-operating items and negligible taxes (tax expense ¥1.49m). Gross profit of ¥80.0m exceeds revenue, implying non-product operating income (e.g., grants, subsidies, or milestone income) and/or unreported cost of sales; the reported 111% gross margin is structurally non-recurring in nature. DuPont shows very weak profitability: net margin of -1,272%, low asset turnover (0.035x), and moderate leverage (1.59x) together yield a calculated ROE of -69.98%. Operating cash outflow was ¥-755m with investing outflow of ¥-154m, producing free cash flow (FCF) of ¥-909m; financing inflow of ¥84m only partially offset cash burn. Liquidity metrics are unusually strong on the provided figures: current ratio 21.5x and working capital of ¥2,628m suggest a sizable liquid buffer. However, there are material data limitations: current assets (¥2,756m) exceed total assets (¥2,079m), and several line items show as zero due to non-disclosure rather than true zeros. Equity is reported at ¥1,309m versus liabilities of ¥649m, implying a liabilities-to-equity ratio near 0.5x; the reported equity ratio of 0.0% is a placeholder and not meaningful. The operating profile is consistent with a development-stage biotech relying on equity funding, grants, and controlled opex rather than commercial cash flows. Cash flow quality is relatively reasonable for an R&D company: OCF/Net income at 0.82 indicates the majority of accounting losses are cash, but some non-cash items or working capital effects soften the gap. With FCF at ¥-909m and substantial reported working capital, the implied cash runway could be multi-year, but exact runway is uncertain due to inconsistencies and undisclosed cash balances. Dividend capacity is effectively nil; DPS is zero and is appropriate given the loss-making, investment-intensive profile. Near-term profitability depends on clinical/regulatory milestones and potential partnering income rather than operating leverage from sales. Key considerations include R&D cadence, trial outcomes, grant/milestone visibility, and financing access. Overall, the company remains in investment phase with adequate headline liquidity but continued dependence on external or non-recurring funding sources to bridge to commercial inflection.

Profitability Analysis

ROE_decomposition: Net profit margin -1,272.22% × asset turnover 0.035 × financial leverage 1.59 = ROE -69.98%. The extraordinarily negative margin dominates the ROE outcome, with very low turnover typical of pre-revenue biotech and only modest leverage. margin_quality: Reported gross margin of 111.2% is not reflective of product economics; it likely stems from grants or other operating income combined with unreported cost of sales. Operating margin is deeply negative (operating loss ¥-909m on ¥72m revenue), indicating the cost base is driven by R&D and SG&A rather than COGS. Effective tax rate is effectively 0% given losses. operating_leverage: Revenue declined 9.8% YoY while operating loss was flat YoY, suggesting limited operating leverage; the expense base appears largely fixed/semi-fixed (R&D programs, headcount). Profit sensitivity is low to near-term revenue changes and high to milestone/grant recognition or cost discipline.

Growth Assessment

revenue_sustainability: Revenue of ¥72m is small and decreased 9.8% YoY; it likely includes non-recurring components (grants/milestones). Sustainability is uncertain and not indicative of a scalable commercial engine at this stage. profit_quality: Losses are driven by development investments, not deteriorating unit economics. The OCF/Net income ratio of 0.82 indicates that accruals do not materially distort earnings; however, earnings quality remains tied to R&D capitalization choices (not disclosed) and milestone timing. outlook: Near-term top-line is expected to remain modest and volatile, dependent on external funding and collaboration receipts. Profit improvement hinges on R&D progress and potential partnership income rather than core sales growth. Visibility is low due to limited disclosure of pipeline timelines in the provided data.

Financial Health

liquidity: Current assets ¥2,755.99m vs current liabilities ¥128.17m yield a current ratio of 21.5x and working capital of ¥2,627.82m, indicating strong headline liquidity. Quick ratio matches the current ratio, implying minimal inventories (reported as 0, i.e., undisclosed). Cash balance is undisclosed (reported as 0). solvency: Total liabilities ¥648.92m and equity ¥1,309m imply a liabilities/equity ratio of ~0.50x, indicating low balance sheet leverage. Interest expense is undisclosed (0), and interest coverage cannot be assessed but is effectively irrelevant given negligible debt service. capital_structure: Financial leverage in DuPont is 1.59x, consistent with a low-debt structure. Equity remains the primary funding source; financing CF of ¥84m suggests small-scale capital raises or subsidies during the period.

Cash Flow Quality

earnings_quality: OCF of ¥-755m vs net loss of ¥-916m (OCF/NI = 0.82) indicates losses are largely cash-based but partially cushioned by non-cash charges or favorable working capital movements. Depreciation/amortization and interest are undisclosed (reported as 0), limiting deeper quality assessment. FCF_analysis: FCF was ¥-909m (OCF ¥-755m + investing CF ¥-154m), consistent with ongoing R&D and limited capital intensity beyond research investments. Financing inflows of ¥84m offset less than 10% of FCF burn. working_capital: Working capital is sizeable at ¥2,627.82m, driven by large current assets and small current liabilities. Given the business model, current assets are likely dominated by cash and equivalents/short-term securities, but actual cash is undisclosed; day-to-day liquidity appears ample on headline figures.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0.00 with a reported payout ratio of 0.0%, appropriate given a net loss of ¥-916m and negative FCF of ¥-909m. There is no capacity for dividends without jeopardizing R&D funding. FCF_coverage: With FCF negative, dividend coverage is 0.00x. Any future dividend policy would require a shift to positive OCF and sustained profitability. policy_outlook: Given the development-stage profile and reliance on external funding, a no-dividend stance is likely to persist until commercialization or stable partnership income emerges.

Risk Assessment

Business Risks:

• Clinical and regulatory uncertainty around pipeline assets; timing and outcomes can materially affect funding needs.
• Revenue concentration in non-recurring items (grants, milestones) leading to volatility.
• Commercialization timing risk; lack of scalable product revenue near term.
• Talent retention and R&D execution risk in a competitive biotech labor market.
• Partnering risk: dependence on collaborations for funding and development support.

Financial Risks:

• Sustained cash burn (FCF ¥-909m) requiring periodic financing.
• Disclosure gaps (cash, cost breakdown) complicate cash runway assessment.
• Potential dilution risk if equity issuance is needed before commercialization.
• Interest rate and market conditions affecting financing availability and terms.

Key Concerns:

• Data inconsistencies (current assets exceed total assets; equity ratio reported as 0%) imply XBRL classification issues and limit precision.
• High negative ROE (-69.98%) driven by structurally low revenue vs fixed R&D costs.
• Uncertain sustainability of gross profit given reliance on non-recurring operating income.

Investment Implications

Key Takeaways:

• Pre-commercial biotech profile with minimal revenue (¥72m) and large operating loss (¥-909m).
• OCF/NI at 0.82 indicates losses are largely cash; FCF at ¥-909m underscores burn rate.
• Headline liquidity strong (current ratio 21.5x; working capital ¥2,628m), albeit with reporting inconsistencies.
• Leverage low (debt-to-equity ~0.50x); financing inflow modest (¥84m).
• Gross margin >100% reflects non-recurring items; not indicative of product economics.

Metrics to Watch:

• Cash and equivalents balance and monthly cash burn (undisclosed here).
• R&D cash outflows and any changes in trial cadence or pipeline prioritization.
• Grant/milestone income visibility and timing.
• Equity financing activity and dilution.
• Updates on clinical milestones and regulatory filings affecting commercialization timeline.

Relative Positioning: Positioned as an early-stage, low-revenue biotech with ample headline liquidity and low leverage but ongoing dependence on non-recurring funding and capital markets; peers with later-stage assets or partnerships may exhibit better revenue visibility and lower funding risk.

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