SMS (2175) Q1 2025 earnings summary

Executive summary

• Achieved 21 consecutive years of sales and profit growth, with Q1 FY03/25 sales up 15% year-over-year to ¥17.4 billion, but profits declined as planned due to upfront hiring and advertising investments.

• Net sales for Q1 FY2024 rose 14.7% year-over-year to ¥17,426 million, with operating profit down 19.5% to ¥3,000 million.

• Ordinary profit decreased 10.7% year-over-year to ¥4,114 million; profit attributable to owners of parent fell 6.7% to ¥3,163 million.

• Earnings per share for the quarter were ¥36.71, compared to ¥38.89 in the prior year period.

• Expect growth to accelerate from Q2 as new hires contribute and investment effects materialize.

Financial highlights

• Q1 FY03/25 net sales: ¥17,426 million (+15% YoY); operating income: ¥3,000 million (-20% YoY); ordinary income: ¥4,114 million (-11% YoY); net income: ¥3,163 million (-7% YoY).

• Career segment sales rose 12% YoY to ¥12,157 million, with Elderly Care Career up 20% and Medical Care Career up 7%.

• Kaipoke (Elderly/Disability Care Operators) sales increased 24% YoY to ¥2,824 million, driven by membership growth and M&A matching business expansion.

• Overseas segment sales grew 13% YoY to ¥1,713 million, with steady performance in both Medical Platform and Global Career businesses.

• Gross profit increased to ¥15,830 million from ¥13,802 million year-over-year; SG&A expenses rose to ¥12,829 million from ¥10,073 million.

Outlook and guidance

• Guidance for FY03/25 anticipates continued sales and profit growth for the 21st consecutive year.

• Full-year FY2025 net sales forecast at ¥65,665 million, up 21.7% year-over-year.

• Operating profit projected at ¥9,096 million (+10.0%), ordinary profit at ¥11,002 million (+11.1%), and profit attributable to owners of parent at ¥8,018 million (+10.9%).

• Full-year EPS forecast is ¥93.03.

• Q1 profit decline expected to reverse from Q2 as new career partners begin contributing to matching activities.