Simplex (4373) Q2 2025 earnings summary

Executive summary

• H1 FY3/25 revenue rose 11.9% YoY to ¥21,876 million, driven by strong System Integration, Operation Service, and new Strategy/DX Consulting contracts.

• Operating profit declined 2.1% YoY to ¥3,915 million, impacted by the cancellation of an insurance system integration project, which reduced both revenue and profit by ¥0.6bn in H1.

• Gross profit increased 1.8% to ¥8,661 million, but gross margin fell to 39.6% from 43.5% due to higher costs and the canceled project.

• SG&A and R&D expenses rose due to office expansion, recruitment, and resource reallocation from the canceled project.

• Strong demand for DX and IT solutions led to an upward revision of full-year revenue forecast.

Financial highlights

• H1 FY3/25 revenue: ¥21,876mn (+11.9% YoY); gross profit: ¥8,661mn (+1.8% YoY); operating profit: ¥3,915mn (-2.1% YoY); net profit: ¥2,594mn (-2.6% YoY).

• H1 gross profit margin declined to 39.6% from 43.5% YoY; operating profit margin fell to 17.9% from 20.5%.

• Basic EPS: ¥44.52 (down from ¥46.41 YoY).

• Total assets: ¥76,397mn; total equity: ¥47,444mn; equity ratio: 62.1%.

• Cash and cash equivalents: ¥12,476mn (down ¥225mn YoY).

Outlook and guidance

• Full-year FY3/25 revenue forecast revised up to ¥46,800mn (+15.0% YoY); operating profit forecast at ¥10,600mn (+19.8% YoY).

• Profit attributable to owners of parent forecast at ¥7,280mn (+17.5% YoY); basic EPS projected at ¥123.97.

• R&D expense forecast reduced by ¥0.5bn to ¥1.5bn; gross profit margin forecast lowered to 41.2%.

• Dividend forecast unchanged at ¥50 per share for the fiscal year.

• Over 80% of forecast revenue already secured via H1 actuals and outstanding project orders.