ELEMENTS (5246) Q4 2024 earnings summary

Executive summary

• Achieved record revenue of 2,545 million yen for FY2024, up 31% year-over-year, driven by core AI cloud-based identity solutions and surpassing mid-term growth targets.

• EBITDA reached 343 million yen, a 468 million yen improvement, marking the first full-year profit since founding.

• Operating income reached 58 million yen, reversing a prior-year loss of 297 million yen; net loss narrowed to 132–133 million yen from 339 million yen.

• Personal authentication solutions drove growth, with sales up 47% year-over-year and CAGR of 43%.

• Acquired 95.01% of Polarify for 1,539 million yen, to be consolidated from March 2025, expanding group scale by 1.6x.

Financial highlights

• Q4 revenue was 688 million yen, up 10% year-over-year; personal authentication up 29%.

• Full-year gross profit margin improved to 85.8% (+8.5pt), gross profit up 46% to 2,183 million yen.

• SG&A expenses rose 18% to 2,125 million yen, mainly from M&A, headcount increase, and cloud data center launch.

• Cash and deposits at year-end: 2,746 million yen, nearly unchanged from the previous year.

• Equity ratio improved to 42.7–42.8% from 24.4% year-over-year.

Outlook and guidance

• Polarify acquisition expected to increase group revenue by 1.6x; full-year contribution from FY2026.

• Short-term profit impact from PMI costs in FY2025, with profit contribution expected from FY2026 onward.

• No consolidated earnings forecast for FY2025 due to uncertainty; guidance to be disclosed when available.

• Synergies from integration targeted to improve annual profit by 750–1,000 million yen within two years.

• Plans to expand identity solutions into local governments and public sectors, leveraging new partnerships and technology.