Soracom (147A) Q1 2025 earnings summary

Executive summary

• Sales reached 1.89 billion yen, up 33.6% year-over-year, with non-GAAP operating profit at 109 million yen (+31.0% YoY) and GAAP operating profit at 94 million yen (+12.8% YoY).

• Both sales and profits are progressing above plan, outperforming performance forecasts.

• Over 2,000 attended SORACOM Discovery 2024, with new generative AI services, satellite communication plan NT1, and SOC2 Type1 certification enhancing the platform.

• Growth strategy focuses on global expansion (global sales +42.2% YoY), securing large projects, and strategic alliances, including investment in Cariot for connected car solutions.

• Profit attributable to owners of parent was 2.8 million yen for the quarter.

Financial highlights

• Recurring revenue was 1.54 billion yen (+23.8% YoY), accounting for 81.5% of total sales.

• Gross profit increased to 1.12 billion yen (+25.9% YoY), with a margin of 59.2% (down 3.6pt YoY due to higher device sales).

• SG&A expenses rose 27.3% YoY to 1.03 billion yen, representing 54.2% of sales.

• Cash and deposits at quarter-end totaled 9.23 billion yen, up from 7.70 billion yen at the previous year-end.

• Comprehensive income totaled 107.9 million yen, mainly from foreign currency translation adjustments.

Outlook and guidance

• Full-year sales forecast at 9.91 billion yen (+25.0% YoY), with recurring revenue expected to reach 6.87 billion yen (+27.7% YoY).

• Operating profit forecasted at 930 million yen (+27.2% YoY), with a non-GAAP margin target of 10.4%.

• Projected earnings per share for the year is 15.87 yen; no dividend is planned.

• Seasonality expected, with incremental revenue and operating profit weighted toward the second half due to client fiscal year-ends.

• Long-term target is a non-GAAP operating margin of 30%+, driven by gross profit margin improvement and operating leverage.