ASIRO (7378) Q2 2024 earnings summary

Executive summary

• Revenue grew 45% YoY in FY2024 2Q, reaching ¥2,126 million, driven by strong legal and derivative media segments.

• Operating loss of ¥41 million, reversing from a prior-year profit, mainly due to impairment losses and increased investment.

• Net profit attributable to owners was ¥4 million for 2Q, but a net loss of ¥124 million for the cumulative period due to impairments.

• All business segments posted YoY revenue growth, with especially strong performance in derivative media and HR businesses.

• The company is in a planned investment phase, prioritizing long-term growth over short-term profitability.

Financial highlights

• 2Q revenue: ¥1,160 million (+45.1% YoY, +20.1% QoQ); 2Q cumulative revenue: ¥2,126 million (+43.1% YoY).

• 2Q operating profit: ¥62 million (including ¥67 million impairment loss); cumulative operating loss: -¥41 million (impairments totaling ¥203 million).

• EBITDA increased 22.6% YoY to ¥224 million; adjusted EBITDA up 23.2% to ¥181 million.

• Gross margin for 2Q: 36.8% (down 4.9pt YoY); gross profit margin for the period: 35.4%.

• 2Q-end cash and deposits: ¥1,235 million; operating cash flow turned positive at ¥228 million.

Outlook and guidance

• Full-year revenue guidance maintained at ¥4,236 million (+32.5% YoY), with 2Q results at 50.2% of annual target.

• Operating profit forecast is ¥105 million (+97.8% YoY); net profit forecast is ¥6 million, EPS ¥3.59.

• Profit targets are expected to be met, with investment levels under control and impairment losses now fully recognized.

• No change to previously announced guidance.

• Focus will shift to new product development in insurance, with existing product promotion investment curtailed.