ELEMENTS (5246) Q3 2024 earnings summary

Executive summary

• Revenue for Q3 FY2024 was ¥648 million, up 22% year-over-year, with cumulative revenue up 41% to ¥1,857 million, driven by AI cloud and personal authentication solutions.

• EBITDA for Q3 was ¥63 million, and cumulative EBITDA reached ¥297 million, turning positive from a prior loss.

• Operating income was ¥110 million, reversing a loss of ¥375 million last year; net loss attributable to shareholders narrowed to ¥38–39 million.

• Strategic focus on expanding digital ID wallet "PASS" and AI-based self-service gas station solutions.

• Management transition to a two-CEO structure and introduction of a long-term commitment plan for the new CEO.

Financial highlights

• Q3 gross profit was ¥541 million, up 22% year-over-year, with a gross margin of 83.5%.

• SG&A expenses for Q3 were ¥578 million, up ¥35 million sequentially, mainly due to personnel increases and subsidiary consolidation.

• Cumulative operating income turned positive at ¥110 million, a significant improvement from a loss of ¥375 million last year.

• Cash and deposits at Q3-end were ¥2,923 million; equity ratio stood at 42.5%.

• Total assets increased to ¥5,077 million from ¥3,629 million at the previous fiscal year-end.

Outlook and guidance

• Progress toward full-year revised guidance is on track, with cumulative EBITDA at 84.9–108% of plan.

• Full-year revenue guidance is ¥2,450–2,615 million, with EBITDA expected at ¥275–350 million.

• Net income guidance ranges from a loss of ¥200 million to a profit of ¥150 million; no dividend planned.

• Focus remains on expanding eKYC and digital ID solutions, aiming for continued high growth and profitability.