WingArc1st (4432) Q1 2025 earnings summary

Executive summary

• Quarterly revenue rose 2.9% year-over-year to ¥7,120 million, driven by strong cloud service growth and large-scale projects with major corporations.

• EBITDA declined 4.2% to ¥2,761 million and net profit attributable to equity holders fell 4.8% to ¥1,748 million, impacted by increased labor, R&D, and infrastructure costs.

• Operating profit for the quarter was ¥2,413 million, down 6.4% year-over-year.

• Strategic moves included acquiring TRYSERVE Co., Ltd. to strengthen public sector business and forming a business alliance with SAKURA internet Inc.

Financial highlights

• Revenue reached ¥7,120 million (+2.9% YoY); EBITDA was ¥2,761 million (-4.2% YoY); net profit was ¥1,748 million (-4.8% YoY).

• Total assets as of May 31, 2024 were ¥66,675 million; equity attributable to equity holders was ¥38,908 million with an equity ratio of 58.4%.

• Cloud revenue surged 31.2% YoY, with invoiceAgent cloud revenue up 91.8%.

• Recurring revenue ratio was 59.6% and maintenance retention rate 91.1%.

• Cash and cash equivalents at quarter-end were ¥13,014 million.

Outlook and guidance

• Full-year forecast: revenue ¥27,600 million (+7.2% YoY), operating income ¥8,000 million (+9.5%), EBITDA ¥9,470 million (+10.1%), net profit ¥5,800 million (+7.2%).

• Q1 progress rates: revenue 25.8%, EBITDA 29.2%, net profit 30.1% of full-year targets.

• Annual dividend forecast is ¥84.00 per share.