Medley (4480) Q2 2024 earnings summary

Executive summary

• Q2 FY2024 sales increased 40% year-over-year, in line with the revised earnings forecast.

• Net sales for H1 FY2024 rose 37.3% YoY to ¥14,706 million, with EBITDA up 6.1% to ¥2,923 million and net profit attributable to owners up 6.6% to ¥2,008 million.

• Consolidation of GUPPY's Inc. contributed to growth, adding 22k customer contracts and a significant increase in goodwill and intangible assets.

• EBITDA margin for Q2 was 28%, down YoY due to proactive investments and business expansion costs.

• HR PF and Medical PF businesses both achieved sales growth, supported by increased customer offices, registered workers, and medical institution users.

Financial highlights

• Q2 FY2024 sales: JPY 8,760 million (+40% YoY); gross profit: JPY 6,161 million (+37% YoY).

• Q2 EBITDA: JPY 2,467 million (+JPY 257 million YoY); operating profit: JPY 2,015 million (-JPY 25 million YoY).

• Ordinary profit: JPY 2,444 million (+JPY 167 million YoY); net profit attributable to owners: JPY 1,541 million (+JPY 16 million YoY).

• Total assets increased to ¥42,165 million as of June 30, 2024, up from ¥25,430 million at the end of 2023.

• Gross profit margin for H1 FY2024 was 65.8%, down from 68.3% in H1 FY2023.

Outlook and guidance

• Full-year FY2024 forecast: net sales ¥29,400 million (+43.2% YoY), EBITDA ¥4,640 million (+36.7%), operating profit ¥2,950 million (+10.8%), net profit attributable to owners ¥3,000 million (+16.9%), EPS ¥92.72.

• EBITDA margin in H2 expected to match FY2023 levels; ordinary and net profit likely to surpass revised forecast.

• No change to full-year guidance; potential M&A not included in forecast.

• No dividend is planned for FY2024.

• The company notes that actual results may differ from forecasts due to variable factors.