Cuorips Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥192M
• Operating Income: ¥-495M
• Net Income: ¥-467M
• EPS: ¥-59.16

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

Qualips Co., Ltd. (48940) reported FY2026 Q2 consolidated results under JGAAP showing early-stage commercialization with very high operating losses relative to scale. Revenue reached 192.0 million yen, up 236.7% year over year, but gross profit was only 5.5 million yen, implying a low gross margin of roughly 2.9%. Operating income was a loss of 495.0 million yen, unchanged YoY on the disclosed figure, highlighting that operating expenses continue to dwarf gross profit. Ordinary and net income were both losses of 483.0 million yen, and EPS was -59.16. Depreciation and amortization totaled 36.0 million yen, putting EBITDA at approximately -459.0 million yen and an EBITDA margin of about -239%. Cash flow from operations was -714.7 million yen, indicating cash burn exceeded the accounting loss in the period. Financing cash inflow of 65.7 million yen partially offset the operating outflow; investing cash flow was not disclosed in the XBRL (shown as 0). The balance sheet is equity-heavy: total assets were 5.454 billion yen against total liabilities of 212.0 million yen and total equity of 5.256 billion yen. Although the reported equity ratio shows 0.0% (undisclosed), the balance sheet implies an equity ratio of roughly 96.4%, and financial leverage is low at 1.04x. Liquidity appears ample with current assets of 5.125 billion yen versus current liabilities of 177.3 million yen, resulting in a current ratio of 2,890% and large positive working capital of 4.948 billion yen. Asset turnover remains very low at 0.035x, consistent with an early commercialization stage. DuPont analysis yields a calculated ROE of -9.19%, driven by a very negative net margin (-251.6%), very low asset turnover, and minimal leverage. Dividend per share was not paid (0.00) as the company remains in an investment and loss-making phase. Several line items (e.g., cash and equivalents, investing CF, equity ratio, share counts) appear undisclosed in the XBRL; therefore, conclusions rely on available non-zero figures and derived indicators from the provided totals. Overall, the picture is of a company with strong capitalization and liquidity but still substantial operating and cash losses relative to its nascent revenue base.

Profitability Analysis

ROE decomposition indicates profitability is constrained by margins and efficiency, not leverage. DuPont: net profit margin -251.56%, asset turnover 0.035x, financial leverage 1.04x, producing an implied ROE of -9.19%. The gross margin of ~2.9% suggests limited pricing power or early-stage cost inefficiencies; this is insufficient to cover operating expenses, given operating loss of -495.0 million yen versus gross profit of only 5.5 million yen. EBITDA margin of -239.1% underscores that core operations are deeply loss-making before D&A. Operating leverage is currently negative: despite strong revenue growth (+236.7% YoY), losses remain large, indicating fixed cost absorption has not yet improved meaningfully at this scale. Expense intensity (implied SG&A/R&D) is high: operating expenses approximate ~500–501 million yen when comparing operating loss to gross profit. Ordinary loss equals net loss, indicating minimal non-operating items and no meaningful interest burden disclosed. Effective tax rate appears near 0% given losses. Near-term profitability will depend on material scaling of revenue and/or structural improvement in gross margin and operating expense efficiency.

Growth Assessment

Revenue growth of +236.7% YoY to 192.0 million yen suggests initial commercialization traction from a low base. However, gross profit of 5.5 million yen indicates revenue quality remains thin, with cost structure consuming most of sales at this stage. The persistence of large operating losses (-495.0 million yen) relative to sales indicates that growth to date has not achieved operating break-even thresholds. Asset turnover at 0.035x is consistent with an early-stage model where assets (largely funded by equity) are not yet fully productive. Outlook hinges on scaling customers/use-cases and improving unit economics, particularly gross margin uplift. If gross margin rises and operating expenses scale slower than revenue, operating leverage could emerge; otherwise, additional financing may be needed to fund the burn. With minimal non-operating noise, reported growth is predominantly organic to operations. Given data limitations (e.g., revenue mix, backlog, customer concentration not disclosed), sustainability of revenue growth cannot be fully assessed. Overall, the growth profile is positive in direction but insufficient in magnitude to offset current expense levels.

Financial Health

Liquidity appears robust: current assets 5,125.1 million yen vs. current liabilities 177.3 million yen produce a current ratio of ~2,890% and quick ratio of ~2,865%. Working capital is sizable at 4,947.8 million yen, providing a buffer against ongoing burn. Solvency is strong: total liabilities are only 211.9 million yen against equity of 5,256.0 million yen, implying an equity ratio near 96.4% (despite the disclosed equity ratio field being 0.0% in the XBRL) and low leverage (financial leverage 1.04x; debt-to-equity 0.04x using total liabilities). The capital structure is predominantly equity-financed with negligible interest expense disclosed, reducing short-term refinancing risk. While cash and equivalents were not disclosed, the magnitude of current assets relative to liabilities suggests ample coverage; however, actual liquidity runway depends on the mix of cash vs. other current assets. The OCF burn rate (-714.7 million yen for the period) is the key constraint; absent improvements or sizable cash reserves, periodic equity financing may continue.

Cash Flow Quality

OCF was -714.7 million yen versus net income of -483.0 million yen, yielding an OCF/NI ratio of 1.48 (both negative), indicating cash burn exceeded accrual losses—i.e., weaker cash conversion in the period. EBITDA at -459.0 million yen versus OCF at -714.7 million yen implies additional cash outflows from working capital and/or non-cash items beyond D&A. Working capital movements are not detailed, but the gap suggests cash tied up in operations, consistent with scaling. Free cash flow cannot be precisely assessed because investing cash flows (including capex) were not disclosed in the XBRL (shown as 0). Financing inflows of 65.7 million yen partially offset OCF burn, indicating reliance on external funding during the period. Overall earnings quality is low at this stage, with losses and negative OCF pointing to a model still in investment mode rather than mature cash generation.

Dividend Sustainability

No dividend was paid (DPS 0.00) and payout ratio is 0.0%, which is consistent with the company’s loss-making and cash-burning position. Given negative OCF and lack of disclosed FCF, there is no coverage for dividends at present. The implied capital allocation focus is on funding operations and growth/R&D rather than distributions. Absent a clear path to positive FCF, dividend initiation or increases are unlikely near term. Policy-wise, retention of earnings and continued access to equity financing appear necessary to support the business plan.

Risk Assessment

Business Risks:

• Commercialization risk: revenue base remains small relative to operating cost structure.
• Margin risk: low gross margin (~2.9%) may constrain path to profitability if not improved.
• Execution risk: need to scale sales and improve unit economics to realize operating leverage.
• Customer concentration risk: not disclosed; early-stage companies often have concentrated revenue.
• Product/technology development risk: ongoing investment implied by high operating expenses.
• Regulatory/market adoption risk: timing and uptake of offerings may be uncertain.

Financial Risks:

• Cash burn risk: OCF of -714.7 million yen in the period requires ongoing funding.
• Financing risk: reliance on equity financing (65.7 million yen inflow) may lead to dilution.
• Liquidity composition risk: cash balance not disclosed; current assets may include non-cash items.
• Valuation/impairment risk: early-stage assets may face future write-downs if commercialization lags.
• Working capital risk: potential cash tie-up as operations scale (implied by OCF below EBITDA).

Key Concerns:

• Sustained operating losses (-495.0 million yen) despite strong YoY revenue growth.
• Very low gross margin (~2.9%), limiting contribution to fixed cost absorption.
• Negative operating cash flow significantly larger than net loss, indicating weak cash conversion.

Investment Implications

Key Takeaways:

• Strong revenue growth from a low base but insufficient to offset high operating expenses.
• Gross margin and asset turnover are very low, driving a negative ROE (-9.19%) despite low leverage.
• Balance sheet is equity-heavy with ample working capital and low liabilities, reducing solvency risk.
• Cash burn is significant; periodic external financing may continue absent rapid scaling or margin improvement.
• Data limitations (undisclosed cash, investing CF, equity ratio, share data) warrant caution in runway estimates.

Metrics to Watch:

• Quarterly revenue growth and customer additions/retention.
• Gross margin trajectory and unit economics.
• Operating expense growth vs. revenue (OPEX-to-sales ratio).
• Operating cash flow and quarterly cash burn rate.
• Cash and equivalents disclosure and composition of current assets.
• Any equity or debt financing events and resulting dilution/leverage.
• Asset turnover and utilization of newly invested assets.

Relative Positioning: Positioned as an early-stage, equity-financed, low-leverage company with substantial liquidity buffers but high operating and cash burn; relative to mature peers, profitability and cash generation lag materially, while balance-sheet solvency is comparatively strong.

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