DAIKO XTECH (8023) Q4 2024 earnings summary

Executive summary

• FY2024 revenue rose 15.3% YoY to ¥43,378 million, operating income rose 54.7% to ¥2,896 million, and net income rose 84.5% to ¥1,838 million.

• Growth reflected strong solution services and stock business, large PC orders, and invoice-system demand; FY2025 guidance calls for lower revenue and operating income.

Financial highlights

• Orders increased 4.4% YoY to ¥42,717 million; revenue increased 15.3% to ¥43,378 million, exceeding revised guidance of ¥42,500 million.

• Gross profit rose 17.2% to ¥11,113 million; gross margin improved 0.4 percentage points to 25.6%.

• Operating income rose 54.7% to ¥2,896 million; operating margin improved 1.7 points to 6.7%.

• Net income attributable to owners rose 84.5% to ¥1,838 million; this was ¥72 million below the revised ¥1,910 million forecast.

• Cash and cash equivalents at year-end rose ¥2,760 million to ¥10,035 million; free cash flow was ¥3,586 million.

Outlook and guidance

• FY2025 forecast: revenue ¥41,000 million, operating income ¥2,200 million, operating margin 5.4%, ordinary income ¥2,250 million, and net income ¥1,450 million.

• Versus FY2024, forecast revenue is lower by ¥2,378 million and operating income by ¥696 million; the initial medium-term plan was achieved one year early in FY2024.

• Forecast revenue headwinds include ¥4.4 billion from fewer large deals, fading invoice-system demand, and lower hardware sales; ¥750 million of higher costs includes development, talent investment, and name-change expenses.

• Higher-value business mix, focused solutions, new businesses, and stock business are expected to add ¥2.1 billion in sales.