Key Positives From The Results
Revenue came in at JPY 2,508M, up +58.1% YoY, driven by the Ministry of Defense contract within the AxelGlobe segment (revenue JPY 986M, +278.6% YoY). Order backlog surged to JPY 53,375M (+366.3% YoY), dramatically improving medium-term revenue visibility.
- Gross profit JPY 797M (+639.9% YoY), gross profit margin 31.8% (+25.0pt). AxelGlobe's gross profit swung from negative JPY 42M to positive JPY 657M — a major turnaround
- AxelGlobe order backlog JPY 43,074M, underpinned by the Ministry of Defense "Satellite Constellation Development and Operations" contract totaling JPY 43.6B
- GRUS-3 (7 satellites) successfully launched on July 7, 2026; critical operations completed July 10; first captured images released July 17. Commercial operations expected to commence in 2026, with earnings contribution anticipated from next fiscal year
- IPO fundraising of JPY 7,935M completed. Equity ratio improved from 31.8% to 47.7%, strengthening the financial foundation
- AL Lab segment secured 3 contracts (Shinano Kenshi, Pale Blue, JAXA), making steady progress in establishing an on-orbit demonstration services business
Key Concerns From The Results
Operating loss widened to negative JPY 3,822M (vs. negative JPY 2,495M in the prior year), with net loss of negative JPY 4,057M (vs. negative JPY 1,950M). Upfront investment burden remains heavy, with R&D expenses up JPY 1,335M and total SG&A at JPY 4,620M (+77.5% YoY).
- Operating CF negative JPY 5,123M (vs. negative JPY 4,329M in the prior year) and investing CF negative JPY 2,117M — significant cash outflows persist. Cash on hand of JPY 5,815M covers near-term working capital needs, but additional fundraising may become necessary
- Events raising material doubt about the going concern assumption exist, as both operating losses and negative operating CF continue
- Interest expense surged to JPY 347M (vs. JPY 100M in the prior year) as financing costs escalated. Repayment burden on JPY 5,269M of interest-bearing debt warrants attention
- Financial covenants with Mizuho Bank require recurring profit and net income to turn positive from FY05/2029 onward — risk of delayed breakeven timeline
- AxelGlobe's revenue from private-sector clients was JPY 116M (−13.1% YoY). High dependence on government contracts (88%) highlights the need to diversify the customer base
Focus Areas / Items To Monitor Going Forward
- Timeline for GRUS-3 (7 satellites) transitioning from initial operations to commercial operations. Any delay directly impacts the JPY 9,000M revenue target for next fiscal year, making continuous progress monitoring essential
- Achievement status against the Ministry of Defense "Satellite Constellation Development and Operations" performance requirements. Monitor the potential earnings impact of penalties (clawback measures, etc.) for non-compliance
- Order pipeline for AL Lab's move toward regular-interval launches. With a target of 4 launches per year by FY05/2030, the pace of expansion from the current 3 contracts will be decisive for the segment's success
- Segment-level and quarterly revenue recognition outlook for next fiscal year's JPY 9,000M revenue target
- Confidence level around GRUS-3 commercial operation launch timing, and earnings impact in the event of delays
- Quality control framework and confidence in meeting Ministry of Defense performance requirements
- Specific go-to-market strategy for expanding AxelGlobe's private-sector revenue
- Conversion rate outlook from the 30+ signed LOIs to paid contracts
- Development progress and funding plan for expanding the constellation to 30 satellites by end of FY05/2031
- Expected timing and scale of additional fundraising (equity and/or debt)
- Quantification of efficiency gains from the reorganization to a function-based structure
- Cost reduction roadmap for the JPY 700M per-satellite manufacturing and launch cost of mid-resolution satellites
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 2,508M | +58.1% |
| Total Revenue (Non-GAAP) | JPY 2,995M | +29.0% |
| Gross Profit | JPY 797M | +639.9% |
| Operating Income | Negative JPY 3,822M | - |
| Recurring Profit | Negative JPY 3,712M | - |
| Net Income Attributable to Owners of Parent Company | Negative JPY 4,057M | - |
| EPS | Negative JPY 65.84 | - |
| Book Value Per Share | JPY 104.65 | +50.1% |
| Comprehensive Income | Negative JPY 4,057M | - |
| Order Backlog | JPY 53,375M | +366.3% |
| Adjusted EBITDA | Negative JPY 3,340M | - |
Gross profit margin improved +25.0pt from 6.8% to 31.8%. Revenue growth outpaced the increase in COGS of JPY 1,710M (+15.7% YoY). However, SG&A of JPY 4,620M (+77.5% YoY) weighed on profitability, with R&D expenses of JPY 2,673M (up JPY 1,335M YoY) as the largest contributor to the increase. Non-operating items included subsidy income of JPY 487M (down JPY 248M YoY) and interest expense of JPY 347M (up JPY 247M YoY). An impairment loss of JPY 290M was recorded under extraordinary losses.
Performance By Business Segment
AxelLiner revenue rose +14.8% YoY to JPY 1,522M as COGS increased in line with K Program progress. AxelGlobe revenue surged +278.6% YoY, driven by the launch of the Ministry of Defense "Satellite Constellation Development and Operations" contract. Following the March 2026 organizational restructuring, bus development costs for proprietary commercial satellites were reclassified from AxelLiner to AxelGlobe; FY05/2025 segment results have been restated under the revised methodology.
Segment Performance Table
| Segment | Revenue | YoY | Segment Profit | YoY | Margin |
|---|---|---|---|---|---|
| AxelLiner | JPY 1,522M | +14.8% | Negative JPY 277M | - | - |
| AxelGlobe | JPY 986M | +278.6% | Negative JPY 1,595M | - | - |
| Adjustments (Corporate expenses, etc.) | - | - | Negative JPY 1,838M | - | - |
| Total | JPY 2,508M | +58.1% | Negative JPY 3,712M | - | - |
*Segment profit is on a recurring profit basis
- AxelGlobe (Government Clients): Revenue JPY 870M (+585.4% YoY). Image data acquisition operations for the Ministry of Defense "Satellite Constellation Development and Operations" commenced in April 2026; gross profit swung from negative JPY 42M to positive JPY 657M
- AxelLiner (AL Lab): Service delivery commenced during the fiscal year
- AxelGlobe (Private-Sector Clients): Revenue JPY 116M (−13.1% YoY). With GRUS-3 commercial operations yet to begin, sales activities were constrained to imagery from the existing GRUS-1 constellation only
Progress Versus Full-Year Guidance
As this is the full-year results, progress rate calculation versus full-year guidance is not applicable. For directional context against next fiscal year (FY05/2027) guidance, revenue is projected to surge from JPY 2,508M this year to JPY 9,000M (+258.8%), driven by the full-year contribution of Ministry of Defense contracts and the commencement of GRUS-3 commercial operations.
| Item | FY Actual | Next FY Plan | Notes |
|---|---|---|---|
| Revenue | JPY 2,508M | JPY 9,000M | +258.8% |
| Operating Income | Negative JPY 3,822M | Negative JPY 800M | Loss narrowing |
| Net Income | Negative JPY 4,057M | Negative JPY 240M | Loss narrowing |
- Revenue fluctuates quarterly based on delivery/acceptance timing of contracted projects and project progress, with a tendency to concentrate in Q4 (March–May)
Next Fiscal Year Guidance
Revenue is planned to surge +258.8%, premised on the full-year contribution of Ministry of Defense contracts (estimated revenue JPY 6.2B) and enhanced imaging capacity from the launch of GRUS-3 (7 satellites) commercial operations. AxelGlobe segment profit of JPY 3,400M is the primary driver of consolidated loss narrowing. FX assumptions: USD/JPY 160, EUR/JPY 190.
- Revenue: JPY 9,000M (+258.8%)
- Total Revenue (Non-GAAP): JPY 10,210M (+240.8%)
- Operating Income: Negative JPY 800M (loss narrowing)
- Recurring Profit: Negative JPY 150M (loss narrowing)
- Net Income: Negative JPY 240M (loss narrowing)
- EPS: Negative JPY 3.60 (loss narrowing)
By segment: AxelLiner revenue JPY 2,920M (+91.9%), segment loss negative JPY 770M. AxelGlobe revenue JPY 6,080M (+516.9%), segment profit JPY 3,400M.
Commentary On Shareholder Returns
Annual dividend for FY05/2026 is zero (JPY 0.00). FY05/2027 is also forecast at zero. The company remains in a heavy investment phase, with no timeline set for dividend initiation.
Financial Position
The IPO public offering raised JPY 7,935M, improving the equity ratio to 47.7% (from 31.8% in the prior year). Interest-bearing debt remains elevated at JPY 5,269M, with cash outflows for upfront investments continuing. Cash on hand of JPY 5,815M secures near-term operating funds.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Cash and Deposits | JPY 5,815M | +16.2% YoY |
| Total Assets | JPY 14,609M | +53.4% YoY |
| └ Total Current Assets | JPY 11,025M | +17.3% YoY |
| └ Total Non-Current Assets | JPY 3,583M | +2,736.3% YoY |
| Total Interest-Bearing Debt | JPY 5,269M | Short-term borrowings 0 + Current portion of long-term debt 2,007 + Long-term debt 3,262 |
| └ Current Portion of Long-Term Debt | JPY 2,007M | +804.3% YoY |
| └ Long-Term Debt | JPY 3,262M | −34.1% YoY |
| Net Assets | JPY 6,993M | +131.0% YoY |
| Shareholders' Equity | JPY 6,974M | +130.5% YoY |
| Construction in Progress | JPY 3,335M | Newly recorded in connection with GRUS-3 manufacturing |
News Released Alongside The Earnings Announcement
- 2026/07/14Financial covenants under the overdraft agreement with Mizuho Bank were amended. The initial assessment period for achieving recurring profit and net income breakeven was deferred from FY05/2027 to FY05/2029 Notice Regarding Amendment to Overdraft and Commitment Line Agreements with Financial Covenants
Major Announcements During The Quarter
- 2026/05/29Secured launch opportunities for 2 high-resolution satellites with Exolaunch, bringing total confirmed launch slots to 15 satellites Agreement with Exolaunch on New Satellite Launch
- 2026/06/16Signed a ground station antenna usage agreement with KSAT for satellite communications. Contract value exceeds 10% of FY05/2025 revenue; infrastructure investment to stabilize GRUS series services Agreement with Kongsberg Satellite Services AS (KSAT) on Ground Station Antenna Usage for Satellite Communications
- 2026/06/30Signed a service contract with JAXA for AL Lab delivery. Contract value JPY 319M (1-year contract; total planned value JPY 638M) for fundamental research on high-maneuverability electric propulsion for spacecraft Progress Update: Service Contract Signed with JAXA for AxelLiner Laboratory
- 2026/07/08GRUS-3 (7 satellites) successfully launched and first voice signal received. All satellites deployed to planned orbit via SpaceX Falcon 9 Successful Launch and Signal Acquisition of Next-Generation Earth Observation Satellite "GRUS-3" (7 Satellites)
- 2026/07/10GRUS-3 (7 satellites) critical operations completed normally. Power, communications, and attitude control health confirmed; transitioned to initial operations phase Next-Generation Earth Observation Satellite "GRUS-3" Critical Operations Successfully Completed
Large-Shareholding Filings / Material Proposals Over The Past Year
- SBI Ventures Two (joint holding): 0.00% → 5.30% (2026/07/03) — Pure investment / securities business inventory
- Global Brain (joint holding): 12.04% → 3.91% (staged sell-down; most recent filing 2026/05/19) — Pure investment
- 31VENTURES-Global Brain-Growth I: 9.27% → 1.10% (staged sell-down; most recent filing 2026/05/19) — Pure investment
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