Net One Systems (7518) Q4 2024 earnings summary

Executive summary

• FY2024 net sales and operating profit declined YoY, while gross profit increased; revenue and operating profit exceeded the revised plan, but bookings fell short despite a record-high Q4.

• FY2025 guidance projects growth in bookings, sales and profits, supported by Public-sector demand and service profitability improvements.

Financial highlights

• FY2024 bookings were ¥201.4bn, down 8.4% YoY; net sales were ¥205.127bn, down 2.2%; operating profit was ¥19.533bn, down 5.3%.

• Gross profit rose to ¥52.555bn from ¥50.367bn, while SG&A increased to ¥33.022bn from ¥29.731bn.

• Profit attributable to owners of parent was ¥13.720bn, down 5.1%; EPS was ¥169.82 versus ¥175.95.

• Revenue exceeded the revised plan by ¥4.1bn and operating profit by ¥3.0bn; attributable profit was ¥13.7bn versus ¥10.9bn planned.

• Q4 bookings rose 13.1% YoY to a record ¥73.1bn; revenue fell 11.2% to ¥62.1bn and operating profit declined 2.4% to ¥7.4bn.

Outlook and guidance

• FY2025 forecasts: bookings ¥225.0bn (+11.7%), net sales ¥220.0bn (+7.3%), operating profit ¥21.0bn (+7.5%), and attributable profit ¥14.4bn (+5.0%).

• FY2025 gross margin is forecast at 25.7%, up 0.1pts YoY; SG&A is forecast to rise ¥2.6bn to ¥35.6bn, including higher personnel and equipment costs.

• Public bookings are forecast to rise ¥15.3bn, driven by government-system cloud connectivity and large projects; Public revenue is forecast to grow 8.6%.

• H1 FY2025 forecast: net sales ¥91.2bn, down 2.1%; operating profit ¥5.8bn, down 8.6%; attributable profit ¥4.1bn, down 6.5%.

• FY2025 annual dividend is forecast at ¥86 per share, comprising ¥43 interim and ¥43 year-end.