Money Forward (3994) Q3 2024 earnings summary

Executive summary

• Q3 FY11/24 consolidated net sales rose 31% YoY to ¥9.81bn, with SaaS ARR up 32% YoY to ¥27.96bn, and EBITDA surplus maintained for the quarter.

• Net sales for the nine months ended August 31, 2024 rose 37.5% YoY to ¥29,673 million, with SaaS ARR up 41.1% to ¥21,584 million.

• Business domain net sales surged 35% YoY, driven by strong recurring revenue growth in both corporate (+37% YoY) and sole proprietor segments (+18% YoY).

• Net increase in corporate customers reached a record high of 10,651, with midmarket ARR up 51% YoY.

• Operating loss narrowed to ¥2,837 million from ¥4,564 million YoY; net loss attributable to owners improved to ¥3,712 million from ¥4,935 million.

Financial highlights

• Q3 consolidated net sales: ¥9.81bn (+31% YoY); adjusted for HIRAC FUND, net sales continued to rise sequentially.

• Q3 EBITDA: ¥0.41bn (EBITDA margin 4%); EBITDA excluding advertising expenses was ¥1.92bn.

• Gross profit increased to ¥19,925 million from ¥13,595 million YoY.

• SaaS ARR: ¥27.96bn (+32% YoY); corporate ARR up 35% YoY, sole proprietor ARR up 41% YoY.

• Gross margin for back-office SaaS applications reached 86%.

Outlook and guidance

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

• Full-year EBITDA projected at ¥1,000–3,000 million; operating loss expected between ¥1,898–3,898 million.

• Aims to improve EBITDA margin by 10–15% YoY, with advertising expenses to sales ratio targeted at 15–17%.

• Earnings per share for the year forecasted at ¥(86.92) to ¥(50.13).

• Medium-term target: FY11/28 net sales of ¥100bn+, SaaS ARR of ¥80bn+, and EBITDA of ¥30bn+; long-term EBITDA margin goal of 40%+.