GMO internet (9449) Q2 2024 earnings summary

Executive summary

• Net sales for H1 FY2024 rose 4.9% year-over-year to JPY 136.4 billion, with operating profit up 16.4% to JPY 24.0 billion and net profit up 21.7% to JPY 7.7 billion, led by Internet Infrastructure growth and a profitable Cryptoassets segment, while profit declined in Internet Finance due to a JPY 4.5 billion provision for doubtful accounts in Thailand.

• Infrastructure businesses achieved record-high net sales and recurring revenues, with operating profit exceeding JPY 9 billion for three consecutive quarters.

• Online Advertising & Media saw decreased revenue but improved profit due to efficiency gains and strong in-house product performance.

• Transition to a holding company structure announced, effective January 1, 2025, to accelerate growth, promote AI and robotics, and strengthen group management.

• Share buyback program expanded to JPY 5 billion, with up to 2.9 million shares targeted.

Financial highlights

• Q2 FY2024 net sales: JPY 67.6 billion (+4.9% YoY); operating profit: JPY 9.5 billion (-0.6% YoY); net profit: JPY 2.2 billion (-8.7% YoY).

• H1 FY2024 net sales: JPY 136.4 billion (+4.9% YoY); operating profit: JPY 24.0 billion (+16.4% YoY); net profit: JPY 7.7 billion (+21.7% YoY).

• Infrastructure segment Q2 net sales: JPY 45.6 billion (+7.3% YoY), operating profit: JPY 9.4 billion (+57.3% YoY).

• Dividend payout ratio targeted at 33%, with interim dividend of JPY 17.20 per share declared; total return ratio policy of 50% maintained.

• EPS for the interim period was JPY 72.74, up from JPY 59.47 a year earlier.

Outlook and guidance

• No consolidated results forecast disclosed due to market volatility in finance and cryptoasset businesses.

• Margin trading service in Thai securities business to be terminated in December 2024; debt collection efforts ongoing.

• Monetization of the new AI & Robotics business expected in the next fiscal year or later.