ELEMENTS (5246) Q3 2025 earnings summary

Executive summary

• Quarterly revenue reached a record ¥1,030 million, up 59% year-over-year, driven by the consolidation of Polarify and growth in LIQUID eKYC sales.

• Revenue for the nine months ended August 31, 2025, rose 46.5% year-over-year to ¥2,721 million, driven by expansion in AI cloud and personal authentication solutions.

• EBITDA was negative ¥20 million, and operating loss was ¥153 million, mainly due to M&A-related costs; adjusted EBITDA was positive ¥5 million, and adjusted operating loss was ¥100 million.

• The group was selected for the Ministry of Internal Affairs and Communications' Digital Infrastructure Development Fund project.

• Despite strong top-line growth, the period recorded an operating loss of ¥136 million and a net loss attributable to shareholders of ¥623 million, reflecting increased costs and investments.

Financial highlights

• Cumulative revenue for the nine months was ¥2,721 million, up 47% year-over-year; cumulative EBITDA was ¥219 million, and cumulative operating loss was ¥136 million.

• Gross profit for the quarter was ¥754 million, up 39% year-over-year, but gross margin declined to 73.2% from 83.5% due to the Polarify consolidation.

• SG&A expenses rose 57% year-over-year to ¥907 million, mainly from Polarify consolidation and M&A costs.

• Net loss attributable to parent company shareholders was ¥171 million for the quarter, and ¥623 million for the nine months.

• Comprehensive loss for the period was ¥731 million.

Outlook and guidance

• Progress toward full-year guidance is on track, with Q4 typically stronger than Q3; cumulative revenue progress is 68–71% of the revised full-year forecast.

• Full-year revenue forecast remains unchanged at ¥3,815–4,000 million, up 49.9–57.1% year-over-year.

• Full-year net loss forecasted at ¥275–375 million, with EPS expected between -¥33.59 and -¥29.52.

• Management targets FY2027 revenue of ¥6–6.5 billion, operating margin of 15%, and EBITDA margin of 25%.

• No revision to previously announced guidance.