Extreme (6033) Q1 2024 earnings summary

Executive summary

• Q1 FY2023 revenue was ¥2,467 million, up 27.4% YoY; operating income was ¥376 million, up 67.3%, and net income was ¥317 million, up 52.0%.

• Digital talent demand remained strong, contract development profitability improved substantially YoY, and content property licensing income provided stable earnings.

Financial highlights

• Revenue rose 27.4% YoY to ¥2,467 million; operating income increased 67.3% to ¥376 million, ordinary income 62.7% to ¥504 million, and net income 52.0% to ¥317 million.

• QoQ revenue was nearly flat at 99.8% of Q4, while operating income was 101.5%; contract development revenue declined with the reversal of quarter-end demand, but overall earnings held steady.

Outlook and guidance

• FY2023 guidance, unchanged from May 12: revenue ¥10,000 million (113.4% of FY2022), operating income ¥900 million (87.9%), ordinary income ¥1,000 million (85.0%), and net income ¥640 million (78.6%).

• FY2023 EPS is forecast at ¥116.33, or 78.5% of FY2022 actual EPS.

• Revenue plan: digital talent ¥6,000 million (+19.4% YoY), contract development ¥3,500 million (+6.9%), and content property ¥500 million (81.5%); contract development targets a second consecutive profitable year.

• Hiring and advertising investment is budgeted to support growth and stabilize revenue scale; these investments underpin the forecast decline in profit.