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Introduction & Market Context
Liberaware Co Ltd (TOKYO:218A) presented its full-year financial results for fiscal year 2025 on September 12, 2025, revealing the company’s first operating profit since its foundation. The drone technology company, which specializes in indoor inspection solutions, saw its stock close at ¥2,347 on the day of the presentation, falling 3.62% despite the positive results.
The presentation highlighted Liberaware’s significant progress in establishing the indoor drone inspection market, particularly in infrastructure sectors like sewer systems, where government initiatives are driving adoption.
FY2025 Performance Highlights
Liberaware reported substantial financial improvements for the fiscal year ending July 2025, with revenue reaching ¥1,406 million, representing a 72% year-over-year increase from ¥815 million in FY2024.
"Significant sales increase and first operating profit since foundation," the company highlighted in its presentation, attributing the growth to increased market recognition of its IBIS drone inspection system and the establishment of the indoor drone inspection market.
As shown in the following financial highlights, the company not only grew revenue substantially but also improved profitability metrics:
Gross profit surged 86% to ¥669 million, with gross margin improving to 47% from 44% in the previous year. Most notably, Liberaware achieved an operating profit of ¥46 million, a dramatic improvement from the ¥434 million operating loss reported in FY2024.
The company specifically highlighted strong performance in its sewer inspection business, noting accelerating adoption rates among local governments following the Ministry of Land, Infrastructure, Transport and Tourism’s roadmap for drone adoption in sewer surveys by 2028.
FY2026 Forecast and Growth Strategy
Looking ahead, Liberaware projects continued strong growth for FY2026, with revenue expected to increase 57% year-over-year to ¥2,220 million. The company also anticipates further gross margin improvement to 50%.
Despite the revenue growth projection, Liberaware forecasts an operating loss of ¥177 million for FY2026, primarily due to planned investments in growth initiatives. However, the company noted that after adjusting for SBIR subsidy timing differences (¥151 million) and stock-based compensation expenses (¥29 million), the adjusted operating profit would be approximately ¥3 million.
The following slide details these projections and the company’s investment strategy:
Liberaware emphasized its commitment to maintaining high growth rates, targeting a compound annual growth rate (CAGR) of 60%. The company’s growth strategy includes several key initiatives: national projects, overseas expansion, development of next-generation IBIS systems, and data business expansion.
Expansion into New Markets
A significant component of Liberaware’s growth strategy involves geographic expansion, with the company establishing operations in three Asian locations: Korea, Hong Kong, and Malaysia. Each location serves a specific strategic purpose in the company’s international growth plan.
In Korea, Liberaware is implementing a direct sales model to serve the local market. Hong Kong will function as a business hub for the region, while Malaysia will serve as a training center. This multi-faceted approach to Asian expansion demonstrates the company’s commitment to establishing a strong international presence.
Forward-Looking Statements
Liberaware’s management expressed confidence in the company’s growth trajectory, citing several favorable market conditions including:
1. Increasing demand driven by social issues, policy trends, and overall market growth
2. Progress in various growth strategies, including national projects (SBIR)
3. Standardization efforts in infrastructure inspections
4. Expanding adoption of drone technology in sewer surveys
"The 26/7 fiscal year is expected to maintain high growth rates, with a focus on key industries and standardization in infrastructure inspections," the company stated in its presentation.
While Liberaware has achieved its first operating profit and projects continued strong revenue growth, investors should note that the company plans to prioritize growth investments over short-term profitability in the coming fiscal year. The stock’s 3.62% decline on the day of the presentation may reflect market concerns about the projected return to operating losses in FY2026, despite the company’s explanation regarding subsidy timing and investment strategy.
As Liberaware continues to expand its presence in the indoor drone inspection market both domestically and internationally, the company’s ability to maintain its growth momentum while progressing toward sustainable profitability will be key metrics for investors to monitor in the coming quarters.
Full presentation:
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