WDB Holdings (2475) Q2 2025 earnings summary

Executive summary

• Revenue increased by 4.0% year-over-year to ¥256.3 billion in 2Q FY2025, driven by steady growth in the CRO segment and higher staffing unit prices.

• Operating profit declined by 2.5% year-over-year, mainly due to increased cost of sales from higher staff compensation.

• Net profit decreased by 10.7% year-over-year, impacted by higher personnel costs and temporary tax increases.

• The Human Resources segment saw modest revenue growth but a notable profit decline, while the CRO segment achieved double-digit growth in both revenue and profit.

Financial highlights

• 2Q FY2025 revenue: ¥256.3B (+4.0% YoY); gross profit: ¥59.0B (-0.5% YoY); ordinary profit: ¥26.1B (-2.5% YoY); net profit: ¥13.2B (-10.7% YoY).

• Gross profit margin fell to 23.0% (down 1.1pt YoY); ordinary profit margin at 10.2% (down 0.7pt YoY); net profit margin at 5.2% (down 0.8pt YoY).

• Cost of sales rose 5.4% YoY, mainly due to increased staff compensation.

• Operating margin was 10.2%, down from 10.8% in the prior year.

• Cash and equivalents at period-end were ¥20,378 million, up ¥589 million year-over-year.

Outlook and guidance

• Full-year FY2025 revenue forecast: ¥518.0B (+5.1% YoY); ordinary profit: ¥47.7B (-13.4% YoY); net profit: ¥29.7B (-16.3% YoY).

• Full-year revenue forecast remains at ¥51,800 million (+5.1% YoY), with operating income projected at ¥4,750 million (−13.1% YoY) and net income at ¥2,970 million (−16.3% YoY).

• Progress rates for revenue and profit are in line with historical trends, but net profit progress is lower due to temporary tax effects.

• Dividend payout ratio target remains at 40%, but dividend per share is expected to decrease temporarily due to lower earnings.

• No changes to previously announced earnings or dividend forecasts.