Astroscale Holdings Inc.

Business Details

With RPO (Rendezvous and Proximity Operations) technology as its core, the company operates four services: ISSA (Inspection & Observation Service), LEX (Life Extension & Refueling Service), ADR (Active Debris Removal Service), and EOL (End-of-Life Debris Prevention Service). Customers include government agencies, defense agencies, and private satellite operators. With bases in Japan, the UK, the US, France, and Israel, the company's primary revenue sources are milestone-based contract revenue and government subsidy income. Full-year revenue for FY2026 (ending April 2026) was ¥5,940 million (up 141.8% year-on-year), and project revenue (revenue plus government subsidy income) was ¥11,506 million (up 89.0% year-on-year). Gross profit was ¥19 million, achieving profitability for the first time.

Recent Overview

Revenue increased 141.8% year-on-year and gross profit turned positive for the first time; a correction to tax effect accounting was also implemented

Full-year revenue for FY2026 (ending April 2026) was ¥5,940 million (up 141.8% year-on-year), and gross profit reached ¥19 million, achieving profitability for the first time. Loss before income tax narrowed significantly to ¥6,695 million due to the recording of a foreign exchange gain of ¥3,650 million (financial income). Separately, as of July 6, 2026, the company reviewed the tax effect accounting treatment related to the foreign exchange gain and made a correction to record an additional deferred tax liability of ¥417 million (increasing income tax expense to ¥419 million). As a subsequent event, on June 5, 2026, the company completed payment for a third-party allotment of new shares to Hulic (2,024,200 shares, ¥3,499 million) and No. 1 unsecured convertible bonds with stock acquisition rights (¥16,300 million), a third-party allotment of new shares to SKY Perfect JSAT (462,600 shares, ¥799 million), and convertible bonds issued through overseas public offering (¥10,000 million), completing total fundraising of over approximately ¥30,600 million.

Key Products

Growth Drivers

• Rapid expansion in demand from defense agencies driven by the reassessment of space defense strategies and substantial increases in defense-related budgets in major countries (US, UK, Europe, Japan, France) (e.g., US Space Force FOE2040, UK SDR2025, Europe's €800 billion strategy document)
• Increase in revenue and turn to positive gross profit driven by a higher proportion of fully-funded projects and shorter average project duration (achieved first-ever positive gross profit of ¥19 million in FY2026 (ending April 2026))
• Establishment of technical credibility following the world's first successful proximity demonstration with actual debris by ADRAS-J, leading to continued order acquisition
• Progress in building the EOL service ecosystem through expanded commercial contracts for Docking Plates (cumulative planned launches exceeding 1,000 units)
• Diversification of new revenue sources through expansion of defense-related projects (e.g., selection as a candidate for US Air Force Research Laboratory, Ministry of Defense, and US MDA SHIELD IDIQ projects)
• Transition to a recurring order model through parallel progress on multiple missions including REFLEX-J (JAXA Space Strategy Fund), ELSA-M, and Orpheus
• Completion of fundraising totaling over approximately ¥30,600 million through capital and business alliances with Hulic and SKY Perfect JSAT and the issuance of convertible bonds

Risks

• Risk of deferred revenue recognition due to unmet or delayed project milestones (possibility that the full amount of the ¥27,435 million total order backlog will not be recognized as revenue)
• Risk of satellite malfunction or mission failure in space (due to the harsh space environment and unforeseen issues)
• Funding risk arising from continued operating losses and negative free cash flow (cash balance of ¥10,021 million; operating cash flow outflow of ¥12,485 million)
• Dilution risk associated with the conversion or redemption of convertible bonds (totaling ¥26,300 million) and the need to secure funds ahead of maturity redemption in June 2029
• Uncertainty regarding future revenue due to orders received falling 72.5% year-on-year to ¥8,445 million and the order backlog (including expected contracts) declining 14.6% year-on-year
• Costs of complying with export control regulations and licensing systems in various countries, and uncertainty in obtaining mission approvals
• Constraints on information disclosure and lack of transparency in project progress due to non-disclosure of defense-related project details and confidentiality obligations
• Foreign exchange risk (the current period recorded a foreign exchange gain of ¥3,650 million; a reverse movement would increase losses. Additionally, an additional deferred tax liability of ¥417 million related to the foreign exchange gain was recorded, which was the cause of the correction to tax effect accounting)