Renascience Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥10M
• Operating Income: ¥-188M
• Net Income: ¥-151M
• EPS: ¥-11.94

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

Rena Science (4889) reported FY2026 Q2 standalone (JGAAP) results indicative of a development-stage biotech with limited revenue and continued operating losses. Revenue was 10,000,000, down 82.1% YoY, suggesting prior-year revenue included non-recurring items (e.g., milestones, grants, or licensing) that did not repeat. Operating loss remained sizeable at -188,000,000, essentially unchanged YoY, implying fixed cost discipline but little operating leverage at the current revenue base. Ordinary loss came in at -151,000,000 and net loss matched at -151,000,000 (EPS -11.94), highlighting minimal non-operating headwinds and low interest burden. The DuPont decomposition yields ROE of -9.63%, driven by an extremely negative net margin (-1,510%), very low asset turnover (0.006x), and modest financial leverage (1.07x). Gross profit is reported at 54,499,000 against revenue of 10,000,000 and cost of sales of 0, creating a mechanically high gross margin (545%) that is not economically meaningful due to undisclosed cost classifications; this should be interpreted cautiously. Operating cash outflow was -132,137,000, broadly consistent with the net loss (OCF/NI ≈ 0.88), indicating losses are primarily cash-based and not driven by large non-cash items. Financing cash flow was +9,476,000, implying minor external funding during the period; investing cash flow is unreported. The balance sheet shows total assets of 1,683,000,000 and total liabilities of 151,210,000, implying low leverage and a large net asset position (equity 1,568,000,000). Current assets are reported at 1,871,252,000 and current liabilities at 151,210,000, which implies a very strong working capital buffer (1,720,042,000) and current ratio (1,237.5%); however, current assets exceed total assets, suggesting mapping/classification issues in the reported line items. Equity ratio is shown as 0.0% and cash/equivalents as 0, which should be treated as not disclosed rather than true zero. Dividend remains nil with a payout ratio of 0%, consistent with an R&D investment phase. Overall, the company maintains ample net assets and reported working capital, but funding runway analysis is constrained by unreported cash details. The revenue contraction and persistent losses are typical of a pre-commercial biotech; near-term financial outcomes hinge on partnership income, grants, and R&D progress. Data limitations (zeros indicating non-disclosure) necessitate caution in interpreting margins and liquidity subtotals. The central analytical focus is cash burn trajectory versus accessible liquidity and the timing of potential monetization events.

Profitability Analysis

ROE is -9.63%, explained by a net profit margin of -1,510%, asset turnover of 0.006x, and financial leverage of 1.07x. The overwhelmingly negative margin dominates the ROE outcome, reflecting the lack of scale and R&D-heavy cost base. Reported gross margin of 545% is not economically meaningful given cost of sales is undisclosed (reported as 0) while gross profit exceeds revenue, likely due to reclassification or inclusion of subsidies/other operating income. Operating loss of -188,000,000 indicates limited operating leverage at the current revenue base; small revenue changes have negligible impact on operating income. Ordinary and net losses are close to operating loss, suggesting minimal financial expenses and limited non-operating volatility in this period. Interest expense is unreported (0), and interest coverage is not meaningful. Given the tiny revenue base, the primary path to improved profitability is either milestone/licensing income or significant cost rationalization; product sales alone at current scale will not absorb fixed R&D/SG&A. Asset turnover at 0.006x underscores the developmental nature of operations with assets allocated to R&D rather than revenue-generating activities.

Growth Assessment

Revenue declined 82.1% YoY to 10,000,000, implying prior-year non-recurring revenue that did not recur. With such a low base, revenue sustainability is weak and likely dependent on milestone/licensing timing and grant income rather than recurring product sales. Profit trends remain constrained by consistent operating losses (-188,000,000), indicating no clear operating leverage yet. Gross profit of 54,499,000 relative to revenue suggests other operating income recognition; future growth visibility requires clarity on pipeline progress and partnering cadence. Near-term outlook hinges on clinical/regulatory milestones, potential alliances, and public/academic funding. Without disclosure of segment or product-level contributions, forecasting is highly uncertain. If OCF burn (-132,137,000 for the half) persists, management may prioritize non-dilutive funding or staged R&D to moderate burn while seeking catalysts. Overall, growth is event-driven rather than volume-driven, typical for early-stage biotech.

Financial Health

Total assets are 1,683,000,000 with liabilities of 151,210,000, yielding a low debt-to-equity ratio of 0.10x and indicating modest balance sheet risk. Current assets are reported at 1,871,252,000 versus current liabilities of 151,210,000, implying a strong reported liquidity position (current ratio 1,237.5%) and working capital of 1,720,042,000. Note that current assets exceed total assets, suggesting classification/mapping anomalies; nonetheless, the large spread versus current liabilities signals ample short-term solvency under the reported figures. Equity is 1,568,000,000 and financial leverage is low (1.07x), supporting solvency. Cash and equivalents are undisclosed (reported as 0), limiting precise runway analysis. With operating losses and cash burn, the company remains reliant on liquid assets and access to financing, but leverage risk appears contained given low liabilities.

Cash Flow Quality

Operating cash flow was -132,137,000 versus net loss of -151,000,000, giving an OCF/NI ratio of approximately 0.88. This suggests losses are largely cash-based but not dramatically worse than accounting losses, indicating limited reliance on accruals in this period. Free cash flow is shown as 0 due to lack of capex/investing disclosures; therefore, true FCF cannot be assessed. Investing cash flow is undisclosed (0), and depreciation/amortization is undisclosed, which limits insight into non-cash charges and maintenance capex. Working capital appears robust based on reported current assets minus current liabilities, but the absence of cash detail and inventories (undisclosed) hinders evaluation of the liquidity mix quality. Overall earnings quality assessment is constrained, but the burn rate implied by OCF is the key driver of financing needs.

Dividend Sustainability

The company paid no dividend (DPS 0.00) with a payout ratio of 0%, which aligns with an R&D-focused, loss-making profile. With negative earnings and undisclosed free cash flow, dividends are not a near-term priority and would be unsupported by cash generation. FCF coverage metrics are not meaningful due to unreported investing/capex; policy is likely to prioritize reinvestment and liquidity preservation. Unless the company achieves recurring profitability or significant non-dilutive inflows, maintaining a no-dividend stance appears consistent with its development stage.

Risk Assessment

Business Risks:

• Clinical and regulatory risk across the development pipeline affecting timing and probability of success
• Revenue concentration risk given reliance on milestones, grants, or few counterparties
• Execution risk in advancing programs to value-inflection points
• Partnership dependency risk for funding, development, and commercialization
• Commercialization risk given limited current revenue base
• Key person and organizational bandwidth risk typical in small biotechs
• Market acceptance and pricing/reimbursement uncertainty upon launch

Financial Risks:

• Cash burn risk with OCF -132,137,000 for the half-year and continuing losses
• Potential need for dilutive equity financing if non-dilutive sources are insufficient
• Liquidity assessment impeded by undisclosed cash; runway uncertainty despite reported working capital
• Accounting presentation/mapping risk (e.g., current assets exceeding total assets) complicating ratio interpretation
• Going-concern risk if funding or milestones are delayed

Key Concerns:

• Sustainability of liquidity given negative OCF and unknown cash balance
• Visibility on future revenue given the 82.1% YoY decline and likely non-recurring nature of prior revenues
• Timing of clinical/partnering milestones that could alter cash trajectory
• Data limitations (zeros denote non-disclosure) affecting margin and FCF analysis

Investment Implications

Key Takeaways:

• Loss-making with ROE -9.63% driven by extremely negative margin and minimal asset turnover
• Revenue fell 82.1% YoY to 10,000,000, pointing to non-recurring prior-year items and weak current commercialization
• Operating loss stable at -188,000,000, indicating controlled but persistent cost base without operating leverage
• OCF/NI ≈ 0.88 suggests cash burn broadly tracks accounting losses; funding cadence remains critical
• Reported working capital is large (1,720,042,000) versus current liabilities, though classification issues exist
• Low leverage (D/E 0.10x) and modest financial risk from debt
• Dividends are not in scope; capital allocation focused on R&D and liquidity

Metrics to Watch:

• Quarterly operating cash flow burn and available cash balance (when disclosed)
• Milestone/licensing income and grant inflows to supplement revenue
• R&D spend trajectory and any cost optimization measures
• Pipeline milestones and regulatory submissions driving potential re-rating
• Equity financing activity and dilution indicators
• Disclosure improvements on cash, capex, and cost of sales composition

Relative Positioning: Relative to TSE Growth-listed pre-commercial biotechs, Rena Science exhibits typical characteristics: minimal revenue, substantial operating losses, low leverage, and dependence on external funding. The reported working capital is comparatively strong versus liabilities, but disclosure gaps (cash detail, COGS, investing flows) limit clarity on true liquidity versus peers.

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