System D (3804) Q4 2024 earnings summary

Executive summary

• Revenue decreased 2.2% year-over-year to ¥4,631 million, with operating profit down 9.3% and net income attributable to shareholders down 12.1%.

• Cloud services and support business expanded, but flow business (customization, product sales) declined due to fewer new projects and timing delays.

• Achieved milestone of 10,000 cumulative users for core package software, but overall results fell short of initial plans.

• Public education and accounting solutions maintained strong market positions, while wellness and leisure solutions underperformed due to project delays.

• Segment for software business remains the main revenue driver, with no single customer accounting for over 10% of sales.

Financial highlights

• Operating income: ¥828 million (down 9.3% year-over-year); ordinary income: ¥830 million (down 9.3%).

• Net income attributable to shareholders: ¥555 million (down 12.1% year-over-year).

• Gross margin: 55.3% (¥2,564 million gross profit on ¥4,631 million revenue).

• EPS: ¥86.78 (down from ¥98.82 year-over-year); BPS: ¥703.02 (up from ¥639.33).

• Comprehensive income: ¥551 million (down 14.1% year-over-year).

Outlook and guidance

• FY2025 forecast: revenue ¥5,024 million (+8.5%), operating profit ¥932 million (+12.6%), net income ¥627 million (+12.9%).

• Focus on expanding share, strengthening recurring (stock) revenue, and enhancing product lineup and support capabilities.

• Dividend forecast for FY2025: ¥27 per share (up from ¥24 in FY2024).