BuySell Technologies (7685) Q3 2024 earnings summary

Executive summary

• 9M FY2024 sales rose 48.2% YoY to ¥44,190m; operating income increased 139.6% to ¥3,711m, supported by organic growth and newly consolidated businesses.

• Q3 operating income exceeded the internal plan, with strong purchasing, higher gross profit per home visit, store-business progress and cost efficiency supporting results above the August revised forecast trajectory.

• FY2025 consolidated operating income growth is expected to exceed 30%, with organic growth, strategic inventory carry and Rext HD consolidation contributing.

Financial highlights

• 9M gross profit was ¥23,496m (+35.6% YoY); ordinary income was ¥3,280m (+115.5%); net income attributable to owners of the parent was ¥1,764m (+149.7%).

• 9M Adjusted EBITDA reached ¥4,912m (+103.0%); comprehensive income was ¥1,768m (+150.1%) and basic EPS was ¥123.37, versus ¥48.51 a year earlier.

• 9M gross margin was 53.2%, down 4.9pt YoY due to the mix shift from newly consolidated store subsidiaries; standalone gross margin was 64.7%.

• Q3 sales were ¥15,470m (+50.9% YoY) and operating profit was ¥1,291m, about 5.5x YoY; new consolidations contributed ~¥2.15bn of quarterly sales.

Outlook and guidance

• FY2024 forecast maintained at sales of ¥61,850m, operating income of ¥4,680m, Adjusted EBITDA of ¥6,332m and net income of ¥2,240m; 9M progress was 71.4%, 79.3%, 77.6% and 78.8%, respectively.

• FY2024 sales, operating income and net income forecasts imply YoY growth of 45.3%, 67.4% and 54.1%; forecast EPS is ¥153.34.

• FY2024 profits were expected in line with or slightly above plan; operating income was trending above the August revised forecast, with strategic inventory carry planned for Q4.

• FY2025 consolidated operating income growth forecast exceeds 30%; Rext HD P/L consolidation begins in FY2025, with meaningful contribution expected after goodwill amortization.

• FY2024 annual dividend forecast increased to ¥30 per share from ¥25; a 1-for-2 stock split is effective January 1, 2025.