Revenue growth remains highly inconsistent, with operating expenses consistently outpacing gross profit, resulting in a deep operating margin of -2.6% as of 2024Q4.
| Sales/Revenue | 235.07M | 440.36M | 179.36M | 46.57M | 463.72M | 216.21M |
| Revenue Growth % | - | 145.52% | 285.14% | -89.96% | 114.47% | - |
| Cost of Goods Sold | 82.74M | 213.26M | 37.58M | 30.5M | 108.38M | 33.54M |
| COGS % of Revenue | - | 48.43% | 20.95% | 65.5% | 23.37% | 15.51% |
| Gross Profit | 152.33M | 227.1M | 141.77M | 16.07M | 355.34M | 182.67M |
| Gross Margin % | 64.8% | 51.57% | 79.05% | 34.5% | 76.63% | 84.49% |
| Gross Profit Growth % | - | 60.19% | 782.42% | -95.48% | 94.53% | - |
| Operating Expenses | 1.12B | 472.96M | 523.26M | 404.49M | 927.46M | 267.02M |
| OpEx % of Revenue | - | 107.4% | 291.74% | 868.6% | 200% | 123.5% |
| Selling, General & Admin | 962.84M | 428.21M | 440.09M | 295.67M | 901.7M | 248.9M |
| SG&A % of Revenue | - | 97.24% | 245.38% | 634.92% | 194.45% | 115.12% |
| Research & Development | 191.78M | 43.25M | 76.08M | 108.82M | 25.75M | 22.89M |
| R&D % of Revenue | - | 9.82% | 42.42% | 233.69% | 5.55% | 10.59% |
| Other Operating Expenses | 0 | 1.49M | 7.08M | 228.94K | -155.43K | 99.84K |
| Operating Income | -969.9M | -245.85M | -381.49M | -388.43M | -572.12M | -89.13M |
| Operating Margin % | -412.6% | -55.83% | -212.7% | -834.1% | -123.38% | -41.22% |
| Operating Income Growth % | - | 35.55% | 1.79% | 32.11% | -541.91% | - |
| EBITDA | -967.97M | -243.85M | -380.4M | -387.65M | -571.81M | -89.06M |
| EBITDA Margin % | -411.78% | -55.37% | -212.09% | -832.43% | -123.31% | -41.19% |
| EBITDA Growth % | - | 35.9% | 1.87% | 32.21% | -542.05% | - |
| D&A (Non-Cash Add-back) | 1.93M | 2.01M | 1.08M | 778.61K | 309.51K | 67.93K |
| EBIT | -5.14M | -254.98M | -334.75M | -388.83M | -572.27M | -84.69M |
| Net Interest Income | -4.63M | -1.72M | -1.59M | -2.7M | -1.26M | -1.45M |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 4.63M | 1.72M | 1.59M | 2.7M | 1.26M | 1.45M |
| Other Income/Expense | 213.03M | -10.84M | 45.15M | -3.1M | -1.41M | 2.99M |
| Pretax Income | -756.87M | -256.7M | -336.34M | -391.53M | -573.53M | -86.14M |
| Pretax Margin % | -321.98% | -58.29% | -187.53% | -840.76% | -123.68% | -39.84% |
| Income Tax | -8.31M | 0 | -188.5K | -9.22M | 28.94M | -15.62M |
| Effective Tax Rate % | 1.1% | 0% | 0.06% | 2.36% | -5.05% | 18.14% |
| Net Income | -871.66M | -256.7M | -336.15M | -382.31M | -602.47M | -70.52M |
| Net Margin % | -370.81% | -58.29% | -187.42% | -820.95% | -129.92% | -32.62% |
| Net Income Growth % | - | 23.64% | 12.07% | 36.54% | -754.36% | - |
| Net Income (Continuing) | -5.11M | -256.7M | -336.15M | -382.31M | -602.47M | -70.52M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -301.02 | 0.00 | -113.84 | -125.60 | -197.93 | -23.17 |
| EPS Growth % | - | 100% | 9.36% | 36.54% | -754.25% | - |
| EPS (Basic) | - | 0.00 | -113.84 | -125.60 | -197.93 | -23.17 |
| Diluted Shares Outstanding | 2.9M | 0 | 2.95M | 3.04M | 3.04M | 3.04M |
| Basic Shares Outstanding | 2.9M | 0 | 2.95M | 3.04M | 3.04M | 3.04M |
| Dividend Payout Ratio | - | - | - | - | - | - |
Persistent Operating Cash Burn
As reported in financial statements, Earlyworks experienced significant revenue fluctuations, with quarterly figures swinging from $14.5M in 2023Q4 to $128.9M by 2024Q4, reflecting the inherent instability of a project-based business model that lacks the predictable recurring revenue streams typically associated with mature enterprise software providers.
The dramatic variance in top-line performance suggests that the company remains heavily reliant on lumpy, non-recurring contract wins rather than a scalable subscription base. Investors should monitor whether this growth trajectory can stabilize as the company attempts to transition from bespoke consulting to standardized platform licensing.
Based on reported figures, gross margins have demonstrated extreme instability, ranging from a low of 28.5% in 2023Q4 to a peak of 93.9% in 2024Q2, which suggests that the company's cost of revenue is highly sensitive to the specific nature of individual project delivery requirements.
This lack of margin consistency implies that Earlyworks has yet to achieve the economies of scale necessary to standardize its service delivery. The wide swings in profitability at the gross level indicate that the company may be absorbing significant third-party infrastructure or labor costs on a per-project basis.
According to recent SEC filings, the company's operating expenses, particularly SG&A, have consistently outpaced gross profit generation, resulting in deep operating losses that reached $334.2M in 2024Q4, highlighting a failure to achieve the operating leverage required to justify its current high-growth valuation in the competitive tech sector.
The persistent disconnect between revenue expansion and operating income suggests that the company is currently prioritizing market share acquisition at the expense of fundamental profitability. Without a clear path to reducing SG&A intensity relative to revenue, the business model appears to be structurally dependent on continuous external capital injections.
As indicated by the provided data, the company's reliance on high-cost R&D and SG&A to drive revenue growth raises concerns regarding the long-term viability of its current business model, especially given that operating losses have deepened even as the company scales its top-line revenue figures significantly.
Short-sellers would likely focus on the potential for margin compression if the company is forced to increase spending further to maintain its competitive position against larger, more established enterprise software incumbents. The lack of clear operating leverage suggests that the current growth trajectory may be unsustainable without a fundamental shift in cost structure.
Quick answers to the most common questions about buying ELWS stock.
For fiscal year 2025, Earlyworks Co., Ltd (ELWS) reported total revenue of $440.4M. This represents a 103.7% increase compared to $216.2M in 2021.
Earlyworks Co., Ltd (ELWS) reported a net loss of $256.7M for the fiscal year ending 2025.
Earlyworks Co., Ltd (ELWS) reported an operating income of $-245.9M, resulting in an operating profit margin of -55.8%. This margin reflects the operational efficiency of the business before interest and taxes.
Earlyworks Co., Ltd (ELWS) generated $227.1M in gross profit for the year, representing a gross profit margin of 51.6%. This demonstrates the company's core pricing power and production efficiency.