Smaregi (4431) Q4 2024 earnings summary

Executive summary

• Net sales reached a record-high ¥8,385 million, up 41.8% year-over-year, driven by strong equipment demand and monthly usage fee growth.

• Operating profit nearly doubled to ¥1,735 million (+94.1% YoY), with ordinary profit at ¥1,696 million (+89.3% YoY) and net income at ¥1,212 million (+36.7% YoY).

• ARR reached ¥5.93 billion, exceeding plan by 6.1% and surpassing the initial target for the first year of the Second Medium-Term Management Plan.

• Number of employees increased 37.9% YoY to 322, supporting business expansion.

• 11th consecutive year of revenue growth and second consecutive year of record profits.

Financial highlights

• Net sales: ¥8,385 million (+41.8% YoY); Operating profit: ¥1,735 million (+94.1% YoY); Ordinary profit: ¥1,696 million (+89.3% YoY); Net profit: ¥1,212 million (+36.7% YoY).

• Gross profit increased to ¥5,203 million from ¥3,569 million YoY; gross profit margin improved to 62.0% (+4.2pt YoY for SaaS), despite a 4.7pt drop in initial cost gross margin due to special demand from new currency issuance.

• SG&A expenses rose 29.6% YoY, but efficiency improved, reducing SG&A-to-revenue ratio by 3.8pt YoY; increased SG&A from hiring, showrooms, and R&D, partially offset by cost optimization.

• Operating cash flow up 73.5% YoY to ¥1,711 million; free cash flow up 95.1% YoY to ¥1,318 million; cash and cash equivalents at year-end rose to ¥5,284 million, up ¥1,327 million YoY.

• Total assets increased to ¥7,953 million, net assets at ¥5,969 million, equity ratio stable at 75.1%, and net assets up 27.5% YoY.

Outlook and guidance

• FY2025 plan targets net sales of ¥10,688 million (+27.5% YoY), operating profit of ¥2,033 million (+17.2% YoY), ordinary profit of ¥2,033 million (+19.8% YoY), and net income of ¥1,414 million (+16.6% YoY).

• ARR target of ¥9.46 billion by FY2026, aiming for a CAGR over 30%.

• Strategic focus on expanding customer base, ARPU, and continued investment in sales, marketing, and recruitment.