Smaregi (4431) Q2 2025 earnings summary

Executive summary

• Achieved record net sales of ¥5.152 billion (+30.5% YoY) and record operating profit of ¥1.195 billion (+43.1% YoY) for 2Q FY2025, driven by cross-selling, increased sales staff, and advertising campaigns.

• Net profit increased to ¥792 million (+41.9% YoY).

• Annual Recurring Revenue (ARR) reached a record ¥6.998 billion (+37.5% YoY), driven by growth in fee-paying stores and cashless payment services.

• Announced first-ever year-end dividend of ¥15 per share, targeting a payout ratio of approximately 20%.

• Acquired 100% of Netshop Supporters Co., Ltd., strengthening EC strategy and expanding SaaS subscription revenue.

Financial highlights

• Gross profit rose to ¥3.143 billion (+28.3% YoY); ordinary profit reached ¥1.184 billion (+41.9% YoY).

• Subscription sales grew +38.7% YoY, now comprising 65.9% of total sales.

• Cash and deposits totaled ¥6.033 billion (+29.5% YoY); equity ratio remained high at 74.0%.

• SG&A expenses increased due to hiring, new showrooms, and goodwill amortization, partially offset by cost efficiencies.

Outlook and guidance

• 2Q progress rates: 48.2% of full-year revenue and 58.8% of operating profit targets achieved.

• Full-year forecast for FY2025: net sales ¥10,688 million (+27.5% YoY), operating profit ¥2,033 million (+17.2% YoY), net income ¥1,414 million (+16.6% YoY), EPS ¥73.60.

• Strategic S&M investments planned to achieve mid-term ARR targets while monitoring margins.

• No changes to the previously announced forecast.

• Impact of Netshop Supporters acquisition on FY2025 consolidated performance under review.