Institution for a Global Society (4265) Q2 2024 earnings summary

Executive summary

• FY Mar 2024 H1 individual revenue was ¥258m, 100% of plan; net loss was ¥167m, ¥48m better than plan, partly reflecting R&D expense timing.

• Core HR and education businesses grew YoY and remained profitable; investment in ONGAESHI weighed on results as the new venture launched in October.

Financial highlights

• H1 individual revenue was ¥258.0m versus ¥254.4m a year earlier; gross profit was ¥110.9m, down 33.8%, and operating loss was ¥168.3m versus ¥94.4m.

• H1 net loss was ¥166.6m versus ¥95.0m a year earlier; compared with plan, net loss improved by ¥47.9m.

• H1 selling, general and administrative expenses were ¥279.3m, up 6.6% YoY; cost of sales was ¥147.1m, up 69.3%.

Outlook and guidance

• FY Mar 2024 individual revenue forecast: ¥913m, up 36% YoY; net profit of ¥14m forecast versus prior-year net loss of ¥125m.

• Core business revenue plan is ¥692m; high-confidence opportunities, including current pipeline, totaled ¥553m, about 80% of the plan.

• Core business was progressing in line with forecast; HR expects customer-unit-price growth in H2 from upselling, and education expects H2 revenue growth through global-company collaboration.

• System sale to ONGAESHI Corporation was planned, but funding conditions could affect the transaction structure, consolidation status and results.