Terra Drone (TSE:278A) Loss Widens Year on Year, Testing Growth-Led Bullish Narratives

Terra Drone (TSE:278A) just posted its Q3 2026 numbers with revenue of 1,229 million JPY and basic EPS of -9.36 JPY, setting the stage for another loss making quarter despite steady top line scale. The company has seen revenue move from 1,205 million JPY in Q3 2025 to 1,229 million JPY in Q3 2026, while basic EPS has swung from 3.67 JPY to -9.36 JPY. This underscores pressure on margins even as the business continues to grow its sales base.

See our full analysis for Terra Drone.

With the latest figures on the table, the next step is to compare these margins and growth trends with the dominant market narratives to see which stories still hold up and which ones need a rethink.

Curious how numbers become stories that shape markets? Explore Community Narratives

Loss Narrows but Stays at -91 Million JPY

• Net income excluding extra items improved from a loss of 245 million JPY in Q2 2026 to a loss of 91 million JPY in Q3 2026, with basic EPS moving from -25.42 JPY to -9.36 JPY over the same period.
• Bears focusing on ongoing losses still see support in the trailing twelve month net loss of 687 million JPY, yet
  • the step up in quarterly revenue from 995 million JPY in Q2 2026 to 1,229 million JPY in Q3 2026 shows the business adding scale even while it stays loss making,
  • and the move from a 245 million JPY loss to a 91 million JPY loss quarter on quarter suggests the size of those losses can change meaningfully as activity levels shift.

TTM Revenue Reaches 4.5 Billion JPY

• On a trailing twelve month basis, revenue stands at 4,489 million JPY, up from 2,963 million JPY two years earlier, while the trailing net loss over the same period is 687 million JPY.
• A growth oriented, more bullish view leans on revenue expanding 10.4 percent over the last year and forecasts of about 20.6 percent annual growth, yet
  • the fact that trailing EPS is still a negative 72.96 JPY indicates that higher sales have not yet translated into positive earnings power,
  • and the persistence of losses from 474 million JPY two years ago to 687 million JPY now highlights that scaling revenue has so far come with sizeable ongoing costs.

Below the surface of this top line growth story, some investors see a high potential platform business while others focus on the sizeable trailing losses and ask how long that can last. 📊 Read the full Terra Drone Consensus Narrative.

Rich 4.5x Sales Multiple with Volatile Shares

• The shares trade on a price to sales ratio of 4.5 times, compared with about 0.6 times for the broader JP Commercial Services industry and 0.8 times for peers, while the share price has also been highly volatile over the past three months.
• Critics highlight that paying a 4.5 times sales multiple for a company that is unprofitable and not expected to reach profitability within the next three years is demanding, yet
  • supporters argue that top line growth running at 10.4 percent year on year, with forecasts of roughly 20.6 percent a year ahead, is precisely why the market is willing to pay a premium multiple,
  • while the recent share price swings underline how quickly sentiment can move as investors reassess that balance between rapid revenue growth and the absence of near term profits.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Terra Drone's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

Explore Alternatives

Despite solid revenue growth, Terra Drone is still loss making, trades on a rich sales multiple, and has yet to turn its expanding top line into sustainable profits.

If you are uneasy paying up for persistent losses and stretched valuations, use our these 906 undervalued stocks based on cash flows to quickly focus on companies where current prices better reflect underlying fundamentals.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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