Smaregi (4431) Q1 2025 earnings summary

Executive summary

• Achieved record quarterly net sales of ¥2.531 billion, up 38.8% year-over-year, driven by increased paid store count, higher customer unit prices, and contributions from recent acquisitions.

• Operating profit increased 46.5% year-over-year to ¥601 million, with net income up 44.5% to ¥396 million.

• Annual recurring revenue (ARR) reached a record ¥6.607 billion, up 41.6% year-over-year.

• CEO succession completed, with Ryuhei Miyazaki appointed as the new CEO, aiming for POS market leadership by 2031.

• Growth supported by successful advertising, cross-selling, and the acquisition of Rece ONE Plus and TSUBAME DONUT businesses.

Financial highlights

• Net sales: ¥2.531 billion (+38.8% YoY); operating profit: ¥601 million (+46.5% YoY); net profit: ¥396 million (+44.5% YoY).

• Gross profit: ¥1.544 billion (+33.1% YoY); SG&A expenses: ¥943 million (+25.8% YoY).

• Subscription revenue grew 42.8% YoY, now 64.2% of total revenue.

• Cash and deposits: ¥5.219 billion (+24.4% YoY); equity ratio stable at 76.9%.

• Basic earnings per share increased to ¥20.61 from ¥14.33 year-over-year.

Outlook and guidance

• Revised long-term vision to target ¥30 billion ARR by 2031, shifting focus from store count to revenue.

• Full-year forecast for fiscal year ending April 2025: net sales of ¥10,688 million (+27.5% YoY), operating profit of ¥2,033 million (+17.2%), ordinary profit of ¥2,033 million (+19.8%), and net income of ¥1,414 million (+16.6%).

• 1Q progress: 23.7% of full-year net sales plan and 29.6% of operating profit plan achieved.

• Continued S&M investments planned to drive ARR growth while monitoring margins.

• No dividend is planned for the fiscal year.