Japaniace (9558) Q3 2024 earnings summary

Executive summary

• Revenue for the cumulative Q3 reached ¥8,297 million, up 14.4% year-over-year, driven by strong IT demand and ongoing IT talent shortages.

• Operating profit declined 10.5% year-over-year to ¥547 million due to higher cost of sales and increased SG&A from aggressive engineer hiring and training.

• Net profit fell 5.2% year-over-year to ¥396 million, reflecting margin pressure from increased hiring and lower utilization rates.

• The company continues to invest in hiring and training, aiming for full-year targets despite short-term profit pressure.

Financial highlights

• Gross profit margin declined from 25.6% to 24.8% year-over-year, with operating margin also decreasing due to higher training and hiring costs.

• SG&A expenses rose in line with higher engineer recruitment.

• Q3 standalone ordinary profit rose 29.8% year-over-year, reflecting improved hiring efficiency in the latter half.

• Cash and deposits increased by ¥190 million from the previous fiscal year-end.

• Dividend payments totaled ¥495 million, with per-share dividends of ¥77 and ¥47 during the period.

Outlook and guidance

• Full-year revenue forecast is ¥11,800 million (+19.4% YoY), with operating profit projected at ¥1,020 million (+22.0% YoY) and net profit at ¥768 million (+24.7% YoY).

• Medium-term plan revised upward, targeting ¥20 billion revenue and 10% ordinary profit margin by FY2026, with strategic M&A considered.

• No changes to previously announced guidance as of the report date.