Money Forward (3994) Q2 2024 earnings summary

Executive summary

• Q2 FY11/24 consolidated net sales rose 41% YoY to ¥10.32bn, surpassing ¥10bn for the first time.

• Net sales for the six months ended May 31, 2024 rose 41% YoY to ¥19,864 million, with SaaS ARR up 35.1% to ¥26,835 million.

• Operating loss narrowed to ¥1,827 million from ¥3,207 million YoY; net loss attributable to owners of parent improved to ¥2,597 million from ¥3,381 million.

• EBITDA reached ¥0.54bn (5% margin), with adjusted EBITDA at ¥0.17bn excluding HIRAC FUND.

• Gross profit margin for SaaS back-office operations hit a record 86%.

Financial highlights

• Q2 consolidated net sales: ¥10.32bn (+41% YoY); Business domain net sales: ¥6.07bn (+37% YoY).

• Gross profit: ¥6.85bn; consolidated gross margin: 66% (67% after adjustment); SaaS back-office gross margin: 86%.

• Gross profit for six months: ¥13,391 million, up from ¥8,836 million YoY.

• EBITDA for six months was negative ¥1,322 million, an improvement from negative ¥1,071 million YoY.

• Cash and deposits at period-end were ¥28,046 million, down from ¥38,855 million at the previous fiscal year-end.

Outlook and guidance

• FY11/24 net sales forecast: ¥39.5–42.0bn (+30–38% YoY); SaaS ARR: ¥30.0–31.6bn (+30–37% YoY); EBITDA: ¥1.0–3.0bn.

• Operating loss forecasted to narrow to ¥1,898–¥3,898 million; net loss attributable to owners of parent expected at ¥2,397–¥4,397 million.

• Targeting advertising expenses/sales ratio of 15–17% and personnel/subcontract expenses/sales ratio of 64–69%.

• EBITDA margin improvement of +10–15% over FY11/23; medium-term target: net sales ¥100bn+, SaaS ARR ¥80bn+, EBITDA ¥30bn+ by FY11/28.

• No interim or annual dividends declared or forecasted for FY2024.