Quest Co (2332) Q4 2024 earnings summary

Executive summary

• FY2023 revenue, operating profit and ordinary profit reached record highs; revenue rose 0.2% YoY and operating profit 2.2%.

• Semiconductor-market weakness weighed on major-customer work, while shifting resources across eight customer industries helped sustain earnings and diversify demand.

Financial highlights

• Revenue was ¥14,224 million, operating profit ¥997 million, ordinary profit ¥1,061 million and net income ¥696 million in FY2023.

• Operating margin was 7.0%, ordinary profit margin 7.5%, and EBITDA ¥1,228 million, or 8.6% of revenue.

• Operating profit increased ¥21 million YoY: revenue growth and efficiency gains added ¥82 million; major-customer deterioration reduced profit by ¥56 million, with investment and cost increases offsetting gains.

• Revenue missed the initial FY2023 forecast, but all profit measures exceeded initial forecasts and all metrics surpassed the original medium-term plan targets.

Outlook and guidance

• FY2024 guidance: revenue ¥15,000 million (+5.4%), operating profit ¥1,050 million (+5.2%; 7.0% margin), ordinary profit ¥1,090 million (+2.7%) and net income ¥720 million (+3.1%).

• FY2024 forecast EBITDA is ¥1,262 million, 8.4% of revenue; EPS is ¥134.52 versus ¥130.06 in FY2023.

• FY2026 medium-term targets include revenue of ¥16,800 million and operating margin of 8%; the FY2030 vision targets revenue above ¥20 billion.

• Priorities include expanding solution services, strengthening engineering DX and data-related businesses, investing in people and technology, and improving the business portfolio and management base.