Broadleaf (3673) Q2 2024 earnings summary

Executive summary

• Revenue for 1H FY2024 rose 14% year-over-year to ¥8,421 million, with cloud services driving growth and a return to profitability in Q2.

• Operating loss narrowed to ¥44 million in 1H FY2024 from ¥1,111 million loss in 1H FY2023; 2Q operating profit was ¥66 million.

• Interim loss attributable to owners improved to ¥14 million from ¥826 million loss a year earlier.

• Cloud service revenues surged 63.4% year-over-year, offsetting a 6.2% decline in packaged system sales.

• Free cash flow turned positive at ¥51 million in 1H FY2024, up from negative ¥791 million in 1H FY2023.

Financial highlights

• Gross profit increased to ¥5,460 million from ¥4,405 million year-over-year, with gross margin improving to 64.8%.

• Operating profit improved by JPY 1.067 billion year-over-year due to higher revenue and cost reductions.

• Net loss attributable to owners improved to ¥14 million in 1H FY2024 from ¥826 million loss in 1H FY2023.

• Free cash flow turned positive as operating cash flow increased despite ongoing development investments.

• Cash and cash equivalents rose to ¥4,036 million, up ¥116 million from year-end.

Outlook and guidance

• Full-year revenue forecast maintained at ¥17,600 million, up 14.4% year-over-year.

• Operating profit forecast unchanged at ¥50 million; profit before tax and net profit forecasts revised upward.

• Net income forecast for FY2024 raised to ¥90 million; basic EPS forecast at ¥1.01.

• Annual dividend planned to increase to ¥2 per share, reflecting the anticipated return to profitability.

• Revenue growth and cost control are expected to improve operating profit by JPY 2.215 billion year-over-year.