GMO Financial Gate (4051) Q3 2024 earnings summary

Executive summary

• Revenue for the nine months ended June 30, 2024, rose 13.3% year-over-year to ¥13.59 billion, driven by growth in active IDs, payment volume, and recurring-model revenue.

• Operating profit increased 43.3% year-over-year to ¥1.40 billion, supported by higher-margin device and recurring revenues, nearly reaching the annual plan.

• Profit attributable to owners of parent grew 40.3% year-over-year to ¥860 million.

• Recurring revenue grew 44.9% year-over-year, now accounting for 36.4% of total sales.

• The company operates a single business segment focused on face-to-face payment processing services.

Financial highlights

• Gross profit for the nine months ended June 30, 2024, was ¥4.21 billion, up 45.0% year-over-year, with gross margin improving for five consecutive quarters.

• Recurring revenue: ¥4.95 billion, up 44.9% year-over-year; initial sales stable at ¥8.65 billion.

• Total assets as of June 30, 2024, were ¥11.24 billion, up ¥1.98 billion from September 30, 2023.

• Equity ratio declined to 48.1% from 53.0% at the previous fiscal year-end.

• Basic earnings per share for Q3 FY2024 was ¥103.62, compared to ¥74.20 in Q3 FY2023.

Outlook and guidance

• Full-year FY2024 forecast remains unchanged: revenue ¥19.20 billion (+20.7% YoY), operating profit ¥1.41 billion (+25.9% YoY), ordinary profit ¥1.39 billion (+24.9% YoY), profit attributable to owners of parent ¥859 million (+15.1% YoY).

• Progress toward full-year operating profit forecast is high at 99.3% after nine months; 2025 operating profit target of ¥1.5 billion expected to be achieved ahead of schedule.

• Medium-term goal to reach ¥5.0 billion operating profit by 2030, with continued focus on expanding recurring revenue and active IDs.

• Ongoing investment in next-generation payment terminals, IoT, and alliances to drive future growth.

• No particular concerns for the business outlook; continued focus on payment terminal sales and merchant acquisition.