SHIFT (3697) Q3 2025 earnings summary

Executive summary

• Net sales for the first three quarters of FY2025 reached ¥95.4B, up 17.6% year-over-year, with operating profit up 68.7% to ¥11.9B and net income attributable to owners up 89.5% to ¥6.3B.

• Growth was driven by strong demand for digital transformation, increased focus on security, and successful execution of the "SHIFT3000" growth strategy.

• Operational improvements, high utilization rates, and margin expansion led to upward revisions in operating and ordinary profit forecasts.

• All profit categories exceeded prior year levels, supported by profitability improvement measures and rising KPIs such as sales per customer and number of engineers.

• Strategic focus on customer retention, AI-driven business process automation (BPaaS), and multi-service expansion to drive future growth.

Financial highlights

• Gross profit for Q3 was ¥11.8B, up 29.4% year-over-year; cumulative gross profit reached ¥33.0B, up 28.5% year-over-year.

• Operating profit for Q3 was ¥3.8B, up 62.2% year-over-year; cumulative operating profit was ¥11.9B, up 68.7% year-over-year.

• EBITDA for the nine months ended May 31, 2025, was ¥14.3B, up 57.5% year-over-year.

• Net income attributable to owners for Q3 was ¥1.8B, up 437.4% year-over-year; cumulative net income was ¥6.3B, up 89.5% year-over-year.

• Basic earnings per share for the period was ¥23.86, reflecting a 15-for-1 stock split effective January 24, 2025.

Outlook and guidance

• Full-year net sales guidance maintained at ¥130B; operating profit guidance revised upward from ¥13.5B to ¥15B.

• Ordinary profit guidance raised from ¥13.5B to ¥14.5B; net income guidance unchanged at ¥7.9B.

• Progress rates as of May 31, 2025: net sales 73.4%, operating profit 79.4%, ordinary profit 80.2%, net income 79.5%.

• Continued focus on utilization rate and GPM enhancement, with conservative risk considerations for non-operating items.

• The company cautions that actual results may differ significantly from forecasts due to various factors.