Ateam Holdings (3662) Q2 2024 earnings summary

Executive summary

• FY2024 Q2 revenue was ¥5,940m, down 19.1% YoY; operating loss was ¥15m and net loss ¥51m.

• H1 revenue fell 17.7% YoY to ¥11,915m, mainly reflecting lower E-Commerce revenue after the cyma transfer; Lifestyle Support and Entertainment also faced pressure.

• Strategy focuses on digital-marketing-led growth, selective acquisitions and investment, and improving profitability in lower-performing businesses.

Financial highlights

• H1 gross profit was ¥10,110m versus ¥11,447m; operating loss was ¥185m versus income of ¥210m, ordinary loss ¥133m versus income of ¥219m, and net loss ¥193m versus ¥151m.

• H1 basic EPS was -¥10.44 versus -¥8.19; comprehensive loss was ¥156m versus ¥244m.

• Q2 ordinary income was ¥3m; the Q1 operating loss was ¥170m, and Q2 operating losses were smaller than forecast.

• H1 operating cash flow was ¥192m versus ¥329m; cash and cash equivalents were ¥5,695m at period-end, down ¥297m from the fiscal-year start.

Outlook and guidance

• FY2024 forecast: revenue ¥28,700m, operating income ¥600m, ordinary income ¥600m, net income ¥780m and EPS ¥42.05; the forecast was revised upward in October 2023 following expected extraordinary income.

• Full-year operating income relies heavily on H2, with a return to quarterly profitability assumed; Q2 progress was described as generally in line with expectations.

• FY2025 operating income target is ¥2.6bn–¥3.1bn, supported by investment-business growth, business turnarounds and the revamped growth strategy; this is a target, not a guarantee.

• Planned H2 Lifestyle Support advertising costs were ~20–25% below the initial forecast; Q4 costs were targeted ~10–15% below Q1.