logly,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥718M
• Operating Income: ¥-31M
• Net Income: ¥-95M
• EPS: ¥-19.71

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

Logly, Inc. (TSE:6579) reported FY2026 Q2 consolidated results under JGAAP showing a contraction in top line and continued losses, but with adequate short-term liquidity and manageable leverage. Revenue was ¥718 million, down 7.1% YoY, indicating demand softness and/or reduced monetization in its core business. Gross profit was ¥143.7 million, implying a 20.0% gross margin; this points to a still-low value-add versus cost structure for a digital services model. Operating income was a loss of ¥31 million, essentially flat YoY, suggesting cost controls offset weaker revenue but not enough to return to profitability. Ordinary income of -¥35 million reflects modest non-operating headwinds on top of operating losses, including interest expense of ¥1.35 million. Net income was a loss of ¥75 million (EPS -¥19.71), also flat YoY, with a near-zero effective tax rate typical in a loss-making quarter under JGAAP. The DuPont profile shows net margin of -10.45%, asset turnover of 0.803x, and financial leverage of 2.18x, yielding an ROE of -18.25%; margin weakness is the dominant driver of negative ROE. EBITDA was -¥29.8 million and the EBITDA margin -4.1%, indicating limited operating leverage and thin gross economics. Operating cash flow was -¥75.8 million, roughly in line with net loss (OCF/NI = 1.01), implying no unusual accrual distortions but underscoring negative cash earnings. The balance sheet shows total assets of ¥894 million and equity of ¥411 million, placing debt-to-equity at 1.53x; while not excessive, this constrains risk capacity until profitability improves. Liquidity is adequate with current and quick ratios both at 156.7% and working capital of ¥349 million, providing runway to execute on turnaround plans. Financing cash flow of -¥85.2 million suggests net outflows (e.g., debt repayment or other financing uses) during the period, which bears watching given negative OCF. Dividends remain suspended (DPS ¥0), appropriate given losses and cash outflows. Several disclosures, such as cash balances, investing cash flows, share count, and equity ratio, were not reported in XBRL; analysis below focuses on available non-zero items and derived metrics. Overall, the story remains one of pressured revenue and structurally low margins offset by adequate liquidity and moderate leverage; a sustained return to break-even likely hinges on revenue stabilization and better gross margin capture.

Profitability Analysis

ROE_decomposition: ROE -18.25% = Net margin (-10.45%) × Asset turnover (0.803x) × Financial leverage (2.18x). The negative net margin is the primary drag; asset utilization is reasonable for a small-cap digital services business, and leverage is moderate but amplifies losses. margin_quality: Gross margin of 20.0% (gross profit ¥143.7m on revenue ¥718m) remains low for an ad-tech/digital platform model, indicating pricing pressure, traffic mix issues, or elevated traffic acquisition/serving costs. Operating margin of -4.3% (operating loss ¥31m) shows partial cost discipline but no break-even. The gap between operating and net loss (-¥31m vs -¥75m) reflects non-operating items and possibly minor below-the-line charges. operating_leverage: EBITDA margin of -4.1% and modest depreciation (¥1.23m) indicate limited fixed cost absorption benefits at current scale. With revenues down 7.1% YoY and operating loss flat, cost adjustments have offset revenue pressure, but incremental revenue is still needed to turn EBITDA/OP into positive territory.

Growth Assessment

revenue_sustainability: Revenue contracted 7.1% YoY to ¥718m, suggesting demand softness or lower unit economics. Without signs of sequential stabilization, near-term growth visibility is limited. profit_quality: Flat YoY operating and net losses imply no structural improvement in profitability yet. Gross margin at 20.0% constrains operating leverage; improvements likely require mix optimization or cost of revenue efficiencies. outlook: Near-term outlook is cautious: to achieve break-even, the company needs both top-line stabilization and gross margin uplift. Execution focuses likely include product monetization, traffic quality optimization, and tighter non-operating drag management. Absent a rebound in revenue or material cost-of-revenue savings, ROE is likely to remain negative.

Financial Health

liquidity: Current ratio 156.7% and quick ratio 156.7% with working capital of ¥348.8m indicate adequate short-term liquidity coverage despite negative OCF. solvency: Debt-to-equity is 1.53x (liabilities ¥629.4m vs equity ¥411.0m), a moderate leverage profile that amplifies earnings volatility but is not excessive. Ordinary loss and negative EBITDA reduce interest servicing capacity (EBITDA/interest ≈ -22x), underscoring the need to restore positive operating earnings. capital_structure: Assets ¥894m against equity ¥411m (implied leverage 2.18x). Financing CF was -¥85.2m in the period, suggesting repayments or other financing uses; continued outflows would gradually tighten flexibility if OCF remains negative.

Cash Flow Quality

earnings_quality: OCF of -¥75.8m closely tracks net income of -¥75.0m (OCF/NI ≈ 1.01), indicating limited accrual noise; losses are cash-consumptive rather than accrual-driven. FCF_analysis: Investing CF was not disclosed (reported as 0), so Free Cash Flow cannot be precisely determined. Given negative OCF and typically non-zero maintenance investments in this sector, underlying FCF is likely negative in the period. working_capital: Specific components not disclosed; however, the alignment of OCF and NI suggests no outsized working capital release or build this quarter. Monitoring receivables collections and payables timing remains important given negative OCF.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0.00 and payout ratio 0.0%, which is consistent with negative earnings (EPS -¥19.71). FCF_coverage: With OCF negative and investing CF undisclosed, FCF coverage of dividends cannot be established; practically, dividends are not funded under current cash generation. policy_outlook: Absent clear visibility to sustained positive OCF and earnings, continuation of a no-dividend stance appears prudent. Any future policy shift would likely follow a return to profitability and stabilized cash flows.

Risk Assessment

Business Risks:

• Revenue contraction of 7.1% YoY indicates demand and/or pricing pressure
• Low gross margin at 20.0% limits operating leverage in a scale-driven model
• Competitive intensity in digital advertising/technology affecting monetization
• Execution risk in product mix optimization and cost-of-revenue control
• Customer concentration and cyclicality risks typical of ad-related businesses

Financial Risks:

• Negative OCF (-¥75.8m) alongside financing outflows (-¥85.2m)
• Interest coverage is negative (EBITDA/interest ≈ -22x), heightening refinancing sensitivity
• Moderate leverage (D/E 1.53x) amplifies earnings volatility
• Limited visibility on cash balances and investing cash needs due to undisclosed items

Key Concerns:

• Sustained negative ROE (-18.25%) driven by weak net margins
• Need for gross margin improvement to unlock operating leverage
• Liquidity runway vs. continued cash burn if revenue does not stabilize

Investment Implications

Key Takeaways:

• Top line declined 7.1% YoY to ¥718m; no clear stabilization yet
• Gross margin at 20.0% remains structurally low for the business model
• Operating loss of ¥31m and net loss of ¥75m were flat YoY, indicating limited underlying improvement
• OCF negative and closely tracking NI, suggesting losses are cash-consumptive
• Liquidity is adequate (current ratio 156.7%) but financing outflows and negative OCF warrant monitoring
• Leverage moderate (D/E 1.53x), with negative interest coverage highlighting urgency to restore EBITDA

Metrics to Watch:

• Quarterly revenue trajectory and client/vertical mix
• Gross margin progression (targeting >20% as a first milestone)
• EBITDA and operating margin inflection toward break-even
• OCF trend and working capital turns (DSO/DPO where disclosed)
• Non-operating items and interest expense relative to EBITDA
• Balance of financing cash flows and any changes in borrowing lines

Relative Positioning: Relative to domestic small-cap digital advertising/technology peers, Logly exhibits weaker profitability and cash generation with moderate balance sheet leverage but acceptable near-term liquidity; achieving gross margin uplift and stabilizing revenue are key to narrowing the performance gap.

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