Raksul (4384) Q3 2024 earnings summary

Executive summary

• Revenue grew 27.9% YoY to JPY 13,566MM in Q3, with gross profit up 45.5% and EBITDA (non-GAAP) up 60.5% to JPY 1,378MM, marking a record high for the third consecutive quarter.

• Net sales for the nine months ended April 30, 2024, rose 24.7% YoY to JPY 37,557MM, with gross profit up 38.4% to JPY 12,623MM.

• Operating profit increased 50.2% to JPY 2,189MM, and net profit attributable to owners of parent grew 47.7% to JPY 2,104MM.

• Growth was driven by both organic expansion and new consolidations, with all key financial figures exceeding Q2 guidance.

• The company continues to invest in growth, including M&A, and has revised its dividend forecast upward to JPY 1.7 per share.

Financial highlights

• Q3 gross margin improved to 34.7% (+4.2pt YoY), with group EBITDA margin exceeding 10% for the first time.

• Non-GAAP EBITDA surged 42.5% YoY to JPY 3,556MM for the nine months.

• Net income (non-GAAP) rose 60.5% YoY to JPY 644MM; EPS (non-GAAP) was JPY 11.1, up from JPY 6.9 YoY.

• Earnings per share were JPY 36.06 for the nine months, compared to JPY 24.51 last year.

• An extraordinary office-related loss of approx. JPY 140MM was recorded in Q3.

Outlook and guidance

• Q4 is expected to include a one-time investment of approx. JPY 300MM for M&A and advertising, with underlying EBITDA projected at JPY 1.1-1.3Bn excluding these costs.

• Full-year forecasts are on track or slightly ahead, with revenue expected at JPY 50.7Bn (+23.6% YoY), gross profit JPY 17.0Bn (+38.3% YoY), and EBITDA JPY 4.3Bn (+36.7% YoY).

• Operating profit is projected at JPY 2,300MM, and net profit attributable to owners of parent at JPY 2,100MM for FY ending July 31, 2024.

• Dividend forecast revised to JPY 1.7 per share for the year ending July 31, 2024.

• Medium-term targets for FY2027 are gross profit of JPY 30Bn and EBITDA of JPY 10Bn, with a focus on quality growth and capital allocation to M&A and shareholder returns.