Data Applications Co Ltd

The company maintains a strong liquidity position, with cash and equivalents amounting to ¥4,149,902,000, significantly exceeding its total liabilities of ¥1,438,433,000, resulting in a current ratio of 3.83. The low debt-to-equity ratio of 0.03 indicates a conservative capital structure, with minimal reliance on long-term debt. Despite this, the company reported a negative return on equity of -0.5% and a return on assets of -0.38%, suggesting underperformance relative to its asset base and equity.

Profitability metrics show a significant decline, with an operating loss of ¥99,398,000 and a net loss of ¥22,825,000, contrasting with a gross profit of ¥440,755,000. This indicates that while the company is generating revenue, it is struggling to convert this into operating and net profits, which is a concern for investors. The company's performance is below the industry median for profitability, as reflected in its negative returns.

The company's revenue is concentrated in a single business segment, IT Services, with no disclosed geographic diversification. This lack of diversification increases the company's exposure to market-specific risks, particularly in its primary operating region. The absence of detailed geographic breakdowns in the financial data suggests a potential concentration risk that could impact the company's resilience to regional economic downturns.

Looking ahead, the company's growth trajectory is uncertain, with no specific numeric deltas provided for the current or next fiscal year. However, the operating cash flow of ¥725,351,000 and capital expenditure of -¥104,143,000 suggest that the company is investing in its operations while maintaining positive cash flow. This could indicate a strategic focus on long-term growth, although the recent operating and net losses may signal challenges in achieving sustainable profitability.

Risk factors include the company's negative operating and net income, which could affect its ability to meet financial obligations and invest in future growth. The risk assessment indicates low liquidity and dilution risks, with no immediate filing-based flags detected. However, the negative returns and operating losses may raise concerns about the company's financial stability and its ability to attract and retain investors.

Recent events, such as the last actual EPS of 43.37 JPY and revenue of ¥2,607,070,000, provide some insight into the company's performance. These figures, however, do not fully capture the company's recent financial challenges, as the operating and net losses suggest a more complex financial picture. The company's management will need to address these issues to restore investor confidence and improve financial performance.

Revenue grew 12.0% year-over-year to JPY 2.92 billion, demonstrating consistent top-line expansion momentum.

Net income surged 84.0% year-over-year, indicating significant improvement in bottom-line profitability performance.

Free cash flow increased 143.8% year-over-year, highlighting strong cash generation capabilities for the business.

The company maintains a low debt-to-equity ratio of 0.03, suggesting a conservative capital structure.

Dilution and liquidity risks are assessed as low, providing stability for existing shareholders.

Return on equity is negative 0.5%, significantly underperforming the cohort median of 4.3%.

The company faces high credit risk, posing a substantial threat to financial stability and operations.

Net margin is negative 3.6%, falling below the cohort median of 3.9% for IT services.

Revenue ¥1.06B, +67,1% YoY; Operating income −7,4% YoY.

• ▍Revenue ¥1.06B, +67,1% YoY
• ▍Operating income −7,4% YoY
• ▍Net income −30,4% YoY
• ▍Net margin 3.2%

Revenue ¥1.09B; Operating income ¥107.4M.

• ▍Revenue ¥1.09B
• ▍Operating income ¥107.4M
• ▍Net margin 6.0%

Revenue ¥947.0M, +72,7% YoY; Operating income −1 104,8% YoY.

• ▍Revenue ¥947.0M, +72,7% YoY
• ▍Operating income −1 104,8% YoY
• ▍Net income −180,2% YoY
• ▍Net margin -1.2%

Revenue ¥854.6M, +34,0% YoY; Operating income +327,6% YoY.

• ▍Revenue ¥854.6M, +34,0% YoY
• ▍Operating income +327,6% YoY
• ▍Net income +921,4% YoY
• ▍Net margin 21.9%

Revenue ¥631.4M; Operating income ¥59.9M.

• ▍Revenue ¥631.4M
• ▍Operating income ¥59.9M
• ▍Net margin 7.8%

Revenue ¥2.61B, −10,7% YoY; Operating income −47,4% YoY.

• ▍Revenue ¥2.61B, −10,7% YoY
• ▍Operating income −47,4% YoY
• ▍Net income −45,7% YoY
• ▍Free cash flow −59,0% YoY
• ▍Net margin 10.3%

Revenue ¥2.50B, +8,5% YoY; Operating income −32,0% YoY.

• ▍Revenue ¥2.50B, +8,5% YoY
• ▍Operating income −32,0% YoY
• ▍Net income −33,2% YoY
• ▍Free cash flow −41,2% YoY
• ▍Net margin 8.6%

Revenue ¥2.30B, +13,7% YoY; Operating income +113,6% YoY.

• ▍Revenue ¥2.30B, +13,7% YoY
• ▍Operating income +113,6% YoY
• ▍Net income +94,0% YoY
• ▍Free cash flow +351,5% YoY
• ▍Net margin 14.0%

Revenue ¥2.02B; Operating income ¥206.9M.

• ▍Revenue ¥2.02B
• ▍Operating income ¥206.9M
• ▍Net margin 8.2%