Avant Group (3836) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 FY2025 rose 20.0% year-over-year to ¥6,776 million, with growth across all business segments and a rebound in Business Management Solutions after prior restructuring, driven by strong demand for digital transformation.

• Operating income increased 60.3% year-over-year to ¥1,091 million, with improved margins and software business growth, despite higher personnel, IT, and outsourcing costs.

• Net income grew 27.4% year-over-year to ¥615 million, with a lower growth rate than operating income due to tax rate differences.

• The company continues to invest in software and business expansion, offsetting higher costs with improved profitability.

Financial highlights

• Gross profit margin improved to 44.1% from 42.0% year-over-year; gross profit increased to ¥2,987 million from ¥2,373 million.

• EBITDA increased 52.4% year-over-year to ¥1,217 million, with EBITDA margin up to 18.0%.

• Net profit per share was ¥16.87, up from ¥12.86 in the same quarter last year.

• Recurring sales ratio and value remained stable.

• Cash and cash equivalents at quarter-end were ¥10,209 million, down ¥1,767 million from the previous fiscal year-end, mainly due to dividend payments and treasury share purchases.

Outlook and guidance

• Full-year FY2025 guidance maintained: net sales ¥28,800 million (+17.9% YoY), operating income ¥4,900 million (+19.5% YoY), net income ¥3,350 million (+17.5% YoY).

• Year-end dividend forecast unchanged at ¥25 per share, aiming for a DOE of 8% during the medium-term plan.

• Management expects continued medium- to long-term growth driven by digitalization trends, despite potential external risks.