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Uzabase 3966

ユーザベース
Recent Updates
2022-05-16
Q1 FY02/12 Flash update
2022-03-24
Full-year FY12/21 report update
2022-02-10
Full-year FY12/21 flash update
Get in touch
Mitsubishi Building, 2-5-2 Marunouchi, Chiyoda-ku Tokyo, 100-0005, Japan
https://www.uzabase.com/jp/
03-4533-1999
Summary
Uzabase, Inc. was founded by two former investment bankers and current co-CEO Yusuke Inagaki in 2008. It operates SPEEDA, an online business intelligence platform geared toward corporate customers that facilitates company and industry analysis, and NewsPicks, a business news media service that also functions as a social media platform.
Software
Key dates
2021-12-10
Coverage initiation
Full Report
2022-05-16
Q1 FY02/12 Flash update
2022-05-16
Full-year FY12/21 flash update
2022-02-10
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Executive summary

Business overview

Uzabase, Inc. was founded by two former investment bankers and current co-CEO Yusuke Inagaki in 2008. It operates SPEEDA, an online business intelligence platform geared toward corporate customers that facilitates company and industry analysis, and NewsPicks, a business news media service that also functions as a social media platform. The company operates in two segments: SaaS (62.1% of total revenue and 76.2% of operating profit before adjustments in FY12/21) and NewsPicks (37.9%, 29.6%). The company plans and develops services that combine data (corporate financial and economic statistics), technologies (data processing and programming technologies), and expert knowledge, while continually improving the functionality and appeal of its services. Using this approach, Uzabase has driven business growth by expanding the scope and number of its customers and the average revenue per account (ARPA) in each segment.

The SaaS segment includes SPEEDA business (68.4% of segment revenue and 137% of segment EBITDA in FY12/21), FORCAS business (14.9%; EBITDA of -JPY180mn) and AlphaDrive/NewsPicks (AD/NP) business (11.6%; EBITDA of -JPY271mn) among other businesses.

SPEEDA is a Software as a Service (SaaS) information platform that facilitates company and industry analysis. It provides one-stop access to financial and stock data for more than 7.4mn listed and unlisted companies in over 200 countries, information on just under 2.0mn M&A deals from around the world, economic data (including global economic statistics), patent trends, and other data. The platform allows users to rapidly get up to speed with various industries, markets, and competitive environments through region-specific analytic reports for more than 560 industries written by dedicated analysts. It was developed by two founding members of Uzabase who had previously worked at an investment bank, where they had experienced firsthand the inefficiencies in the process of aggregating financial data and materials. To resolve these issues, they developed a user-centric service that supports efficient data retrieval, aggregation, analysis, and processing. The company says SPEEDA stands out by virtue of its intuitive operation, which allows users to easily search data on companies and industries around the world.

Revenue in the SPEEDA segment is calculated as the number of contract IDs x monthly subscription fees + optional fees. It can also be derived by multiplying the number of customer companies by the ARPA. In FY12/21, the number of customer companies was 1,901 (+14.4% YoY), the churn rate (12-month average monthly churn rate) 1.0%, the ARPA JPY345,000 per month (+15.4% YoY), and the number of contract IDs per customer 2–3. The service launched in May 2009 with a monthly subscription fee of JPY70,000, but the company has since revised the price in tandem with functional upgrades. The monthly subscription fee stood at roughly JPY200,000 as of February 2022. Financial institutions accounted for 45% of the user base and general businesses for 55% as of June 2021. Uzabase says the service is used by the corporate planning divisions of general businesses to research external environments, M&A activity among competitors, financial results, and new target industries.

The cost of revenue in the SPEEDA segment mainly comprises labor and outsourcing expenses, and data usage fees, and the segment GPM is roughly 70%. Salaries for engineers and analysts represent the bulk of labor costs. Data usage fees—a fixed cost for the company—are paid to financial data and news suppliers such as Nomura Research Institute, Jiji Press, Morningstar, and Tokyo Shoko Research.

When it was launched in 2009, SPEEDA was mainly geared toward investors and therefore competed with financial data platforms offered by Bloomberg, Quick, S&P Global (the provider of Capital IQ), and FactSet Research Systems (the provider of FactSet). From around 2015, however, SPEEDA evolved into a more unique service as non-financial companies became its primary customers.

FORCAS is a marketing platform that supports the execution of account-based marketing (ABM) for B2B service providers. It integrates customer data accumulated by service users with various corporate information (affiliated industries, qualitative and quantitative characteristics of companies such as the scale of their workforce), and automatically analyzes the attributes of existing customers of service users. In this way, it helps users to identify leads with a high potential closing rate, and also supports the formulation of marketing strategies informed by data analysis.

AD/NP comprises the NewsPicks Enterprise service and the Incubation Suite service. NewsPicks Enterprise is a version of NewsPicks customized for corporate customers, and serves as a human resources development and organizational revitalization tool. Incubation Suite helps companies build their own in-house incubation platform. 

NewsPicks is a business news media service that curates global business, financial, and economic news. It provides one-stop access to news content distributed by over 100 Japanese and overseas media. The articles featured on the service are accompanied by comments from public figures or experts referred to as “professional pickers,” which are intended to help readers cultivate a deeper understanding of the subject materials. NewsPicks also provides original content which is covered and edited by its own editorial team.

In the NewsPicks segment, the company mainly generates revenue from monthly subscription fees received from paid subscribers (the number of paid subscribers multiplied by average monthly subscription fees; 38.3% of segment revenue in FY12/21), and from ad revenue received from advertisers for ads posted on the platform (47.7%). Paid subscribers can browse original content and articles from overseas paid media for a monthly fee of JPY1,500 (JPY1,250 under the annual discount plan, JPY500 under the student discount plan). As of September 2021, NewsPicks had a total of 6.6mn subscribers, of which 177,000 (+5.4% YoY) were paid subscribers. Subscribers in their 20s and 30s each accounted for some 30% of the total, company executives for about 50%, and people with over JPY6mn in annual income for over 50%. The service attracts a large number of young readers, and a high ratio of its user base appears to have the potential to move into leadership positions in the future.

NewsPicks competes with financial news websites such as Nikkei Business Online and Toyo Keizai Online, as well as with news curation websites such as Yahoo Japan News, SmartNews, Gunosy, and antenna. Shared Research understands that NewsPicks stands out from its rivals because it provides free access not only to business news articles from several media sources but also to related comments posted by public figures or experts.

The cost of revenue in the NewsPicks segment mainly consists of article provision fees paid to news suppliers, and costs for the in-house editorial team responsible for original content creation. The segment GPM is around 65%.

Earnings trends

In FY12/21, Uzabase reported revenue of JPY16.1bn (+16.3% YoY), EBITDA of JPY1.9bn (+107.6% YoY), operating profit of JPY1.5bn (14x YoY), recurring profit of JPY1.6bn (loss of JPY281mn in FY12/20), and net profit attributable to owners of the parent of JPY589mn (net loss of JPY6.5bn in FY12/20). 

For FY12/22, the company forecasts revenue of JPY19.5–20.0bn, EBITDA of JPY1.0–1.5bn (versus JPY1.9bn in FY12/21), operating profit of JPY400–900mn (JPY1.5bn), and recurring profit of JPY400–900mn (JPY1.6bn). The company has adopted the Accounting Standard for Revenue Recognition from FY12/22. Uzabase expects a 26.0–30.0% YoY revenue growth versus its FY12/21 revenue adjusted for the new standard (JPY15.4bn). It aims to invest for growth in fast-growing services in the SaaS business to combine sustained revenue growth at over 30% and stable profits. In the NewsPicks business, the company plans to invest in marketing in stages while monitoring its effectiveness, with the goal of raising the profile of the service.

Uzabase restructured its segments in Q4 FY12/21 (October—December 2021).
・B2B businesses were previously disclosed as two segments (SPEEDA segment and Other B2B Businesses segment), but these will be disclosed as a single segment (SaaS segment).
・Services for enterprises, NewsPicks Enterprise and NewsPicks Learning (enterprise edition) provided by consolidated subsidiaries AlphaDrive, AlphaDrive Kochi, and NewsPicks, Inc. were previously disclosed as the NewPicks segment. These businesses will be integrated as "AlphaDrive/NewsPicks" and become part of the SaaS segment.
・SPEEDA Edge, which was previously part of Other business (a segment not included in reportable segments), will be included in the SaaS segment.

In December 2021, the company unveiled a long-term management strategy, which calls for revenue of JPY45.0bn and an EBITDA margin of 15% in FY12/25. It sees revenue growth at a CAGR of 30% from its FY12/21 revenue forecast of JPY15.9bn, and an increase in EBITDA margin from its FY12/21 forecast of 11.6%. It plans to mainly concentrate its investments in three businesses: SPEEDA Expert Research, FORCAS, and AlphaDrive/NewsPicks. It also aims to create new businesses to facilitate sustainable growth and profit expansion in its SaaS operations.

Strengths and weaknesses

Shared Research regards Uzabase’s strengths as: (1) the ease of use and convenience of its SPEEDA platform that stem from the fusion of expert contributions and programming technologies; (2) the unique business news curation service NewsPicks that stands out by virtue of its expert comment function, and the expertise accumulated from its operation; and (3) the company’s ability to create new services and businesses through the integration of data, technologies, and expert knowledge.

We see its weaknesses as: (1) SPEEDA’s low subscription fee due to shortage of real-time data and low share of contract IDs compared with rival offerings; (2) SPEEDA’s insufficient overseas information, support, and sales organization, which lag behind global financial information vendors, and (3) NewsPicks’ low number of reporters and the resulting shortage of original content relative to competitors, which have kept the share of paid subscribers for the service at a low level. (For details, see the Strengths & weaknesses section).

Key financial data

Income statementFY12/13FY12/14FY12/15FY12/16FY12/17FY12/18FY12/19FY12/20FY12/21FY12/22
(JPYmn)Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Est.
Revenue7181,1231,9153,0824,5669,34012,52113,80916,06319,500~20,000
YoY56.7%56.5%70.5%60.9%48.2%104.6%34.1%10.3%16.3%-
Gross profit3127111,7042,4745,7727,2007,5929,780
YoY-128.0%139.7%45.2%133.3%24.7%5.4%28.8%
Gross profit margin27.7%37.1%55.3%54.2%61.8%57.5%55.0%60.9%
Operating profit-396-333251546830-1,2361041,460400~900
YoY---117.5%52.1%--1,303.8%-
Operating profit margin-35.3%-17.4%8.1%12.0%8.9%-9.9%0.8%9.1%2.1%~4.5%
Recurring profit-108-396-339225518533-1,429-2811,576400~900
YoY----130.0%2.9%----
Recurring profit margin-15.1%-35.3%-17.7%7.3%11.4%5.7%-11.4%-2.0%9.8%2.1%~4.5%
Net income-113-397111267438611-1,620-6,472589TBD
YoY---141.5%63.8%39.5%----
Net margin-15.7%-35.4%5.8%8.7%9.6%6.5%-12.9%-46.9%3.7%-
Per-share data (JPY)
Shares issued (year-end; '000)--1,6287,20329,30030,89232,95036,53436,750
EPS--4.2710.0415.1320.42-51.35-186.5816.07TBD
EPS (fully diluted)---9.1613.8419.07--15.39
Dividend per share----------
Book value per share--11.1884.6661.86170.33178.20158.01176.79
Balance sheet (JPYmn)
Cash and cash equivalents-4081,2693,0963,2175,7267,9547,58410,613
Total current assets-4951,5003,4453,7338,62010,2249,22612,337
Tangible fixed assets-54565451426344554271
Investments and other assets-1751311124984761,3884,8316,206
Intangible assets-9471279,2929,0011,2141,418
Total assets-7341,6903,6184,40918,81420,95815,91520,286
Accounts receivable-537489184284319370484
Short-term debt-371031042036951,2258631,320
Total current liabilities-4357089591,5333,5675,1315,2227,464
Long-term debt-813212171,0548,8808,6543,4442,694
Total fixed liabilities-823252201,0568,9318,6953,5732,852
Total liabilities-5181,0341,1792,58912,49813,8268,79610,316
Total net assets-2166562,4391,8196,3167,1317,1189,970
Total interest-bearing debt-1184243211,2579,5749,8794,3074,014
Cash flow statement (JPYmn)
Cash flows from operating activities--221-218474818146601,0262,696
Cash flows from investing activities--141-2-41-548-6,592-851-2,028-1,066
Cash flows from financing activities-5431,0821,396-1528,9683,2826131,404
Financial ratios
ROA (RP-based)--54.0%-27.9%8.5%12.9%4.6%-7.2%-1.5%0.0%
ROE--367.8%26.2%17.6%20.7%17.3%-29.1%-111.1%0.0%
Equity ratio-29.5%37.2%66.6%41.1%28.0%28.0%36.3%32.0%
Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
Among per-share data, earnings per share (EPS), diluted EPS, dividend per share (DPS), and book value per share (BPS) are adjusted for stock splits and reverse stock splits.  
* We did not provide YoY changes for FY12/22 in the above table, because the company is adopting the Accounting Standard for Revenue Recognition from FY12/22.

Trends and outlook

Quarterly trends and results

Quarterly results
Earnings (cumulative)FY12/21FY12/22FY12/22
(JPYmn)Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4FY Est.
Revenue3,8777,64811,42915,7244,30519,500~20,000
YoY23.2%22.1%16.3%15.2%11.0%
Cost of revenue1,3982,7864,2875,9751,400
YoY-9.3%-9.2%-5.6%-1.7%0.1%
Cost-to-revenue ratio36.1%36.4%37.5%38.0%32.5%
Gross profit2,4794,8617,1409,7472,904
YoY54.4%52.1%35.1%28.8%17.1%
Gross profit margin63.9%63.6%62.5%62.0%67.5%
SG&A expenses1,7523,6675,7268,3182,386
YoY-7.1%-2.9%1.9%11.1%36.2%
SG&A ratio45.2%47.9%50.1%52.9%55.4%
Operating profit7261,1931,4131,428517400~900
YoY-----28.8%-
Operating profit margin18.7%15.6%12.4%9.1%12.0%-
Recurring profit6651,1041,2871,543700400~900
YoY----5.3%-
Recurring profit margin17.2%29.3%34.0%35.9%16.3%-
Net income472720475570418-
YoY-----11.4%-
Net income margin12.2%9.4%4.2%3.6%9.7%-
Quarterly resultsFY12/21FY12/22
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4
Revenue3,8773,7713,7814,2954,305
YoY23.2%20.9%6.2%12.3%11.0%
Cost of revenue1,3981,3881,5011,6881,400
YoY-9.3%-9.2%2.0%9.5%0.1%
Cost-to-revenue ratio36.1%36.8%39.7%39.3%32.5%
Gross profit2,4792,3822,2792,6072,904
YoY54.4%49.8%9.1%14.2%17.1%
Gross profit margin63.9%63.2%60.3%60.7%67.5%
SG&A expenses1,7521,9152,0592,5922,386
YoY-7.1%1.2%12.0%38.6%36.2%
SG&A ratio45.2%50.8%54.5%60.3%55.4%
Operating profit72646722015517
YoY---11.3%-96.4%-28.8%
Operating profit margin18.7%12.4%5.8%0.3%12.0%
Recurring profit665439183256700
YoY--0.0%23.7%5.3%
Recurring profit margin17.2%11.6%4.8%6.0%16.3%
Net income472248-24595418
YoY-----11.4%
Net income margin12.2%6.6%-2.2%9.7%
Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
The company applied the “Accounting Standard for Revenue Recognition” from the start of Q1 FY12/22. This standard has been retroactively applied to figures from Q1 FY12/21 onward. Cumulative quarterly results for FY12/21 are the sum of quarterly (three-month) results.
Quarterly results (cumulative) by segment
Earnings (cumulative)FY12/21FY12/22
(JPYmn)Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4
Revenue3,8777,64811,42915,7244,305
YoY23.2%22.1%16.3%15.2%11.0%
SaaS2,2964,6567,1699,9822,904
YoY29.9%32.5%31.7%32.0%26.5%
SPEEDA1,5793,2194,9296,8091,944
YoY24.3%23.3%22.9%24.3%23.1%
FORCAS3186681,0481,458454
YoY38.3%42.1%45.6%44.4%42.8%
AD/NP2835238031,153328
YoY76.9%127.4%95.9%74.7%15.9%
INITIAL113243383533163
YoY25.6%35.0%41.9%44.1%44.2%
NewsPicks1,5893,0114,2845,7961,400
YoY45.8%36.1%20.4%12.5%-11.9%
Operating profit7261,1931,4131,428517
YoY---1,663.0%-28.8%
Operating profit margin18.7%15.6%12.4%9.1%12.0%
SaaS455397
YoY--12.7%
Operating profit margin19.8%13.7%
NewsPicks279140
YoY--49.8%
Operating profit margin17.6%10.0%
EBITDA8251,3961,7321,870658
YoY--361.9%108.9%-20.2%
EBITDA margin21.3%18.3%15.2%11.9%15.3%
SaaS5099521,3061,534499
YoY-3.0%-2.1%-11.8%-16.5%-2.0%
EBITDA margin22.2%20.4%18.2%15.4%17.2%
SPEEDA5301,0901,6002,110620
YoY8.2%7.9%5.3%7.1%17.0%
EBITDA margin33.6%33.9%32.5%31.0%31.9%
FORCAS-30-80-130-200-10
YoY-----
EBITDA margin-----
AD/NP10-30-100-250-80
YoY-66.7%----
EBITDA margin3.5%-5.7%-12.5%-21.7%-24.4%
INITIAL10408010040
YoY-50.0%300.0%
EBITDA margin8.8%24.5%
NewsPicks323463509499178
YoY258.9%313.4%26.0%-14.0%-44.9%
EBITDA margin20.3%15.4%11.9%8.6%12.7%
Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
The company restructured its segments in Q4 FY12/21 (October—December 2021). FY12/20 results are based on the new segment breakdown.
The company applied the “Accounting Standard for Revenue Recognition” from the start of Q1 FY12/22. This standard has been retroactively applied to figures from Q1 FY12/21 onward. Cumulative quarterly results for FY12/21 are the sum of quarterly (three-month) results.
Quarterly results by segment
Quarterly resultsFY12/21FY12/22
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4
Revenue3,8773,7713,7814,2954,305
YoY23.2%20.9%6.2%12.3%11.0%
SaaS2,2962,3602,5132,8132,905
YoY29.9%35.2%30.3%32.9%26.5%
SPEEDA1,5791,6401,7101,8801,944
YoY24.3%22.4%22.1%27.9%23.1%
FORCAS318350380410454
YoY38.3%45.8%52.0%41.4%42.8%
AD/NP283240280350328
YoY76.9%242.9%55.6%40.0%15.9%
INITIAL113130140150163
YoY25.6%44.4%55.6%50.0%44.2%
NewsPicks1,5891,4221,2731,5121,409
YoY45.8%26.6%-5.4%-5.1%-11.3%
Operating profit72646722015517
YoY---11.3%-96.4%-28.8%
Operating profit margin18.7%12.4%5.8%0.3%12.0%
EBITDA825571336138658
YoY---33.6%-73.5%-20.2%
EBITDA margin21.3%15.1%8.9%3.2%15.3%
SaaS509443354228499
YoY-3.0%-0.9%-30.5%-36.1%-2.0%
EBITDA margin22.2%18.8%14.1%8.1%17.2%
SPEEDA530560510510620
YoY8.2%7.7%0.0%13.3%17.0%
EBITDA margin33.6%34.1%29.8%27.1%31.9%
FORCAS-30-50-50-70-10
YoY-----
EBITDA margin-----
AD/NP10-40-70-150-80
YoY-66.7%----
EBITDA margin3.5%----
INITIAL1030402040
YoY-50.0%50.0%300.0%0.0%300.0%
EBITDA margin8.8%23.1%28.6%13.3%24.5%
NewsPicks32314046-10178
YoY258.9%536.4%-84.2%--44.9%
EBITDA margin20.3%9.8%3.6%-12.6%
Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
The company restructured its segments in Q4 FY12/21 (October—December 2021). FY12/20 results are based on the new segment breakdown.
The company applied the “Accounting Standard for Revenue Recognition” from the start of Q1 FY12/22. This standard has been retroactively applied to figures from Q1 FY12/21 onward.
ARR by segment
Quarterly trendsFY12/21FY12/22
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4
SaaS ARR8,0638,6479,1339,82810,324
YoY24.4%28.6%28.3%29.5%28.0%
QoQ6.2%7.2%5.6%7.6%5.0%
SPEEDA5,8306,1496,4086,7007,000
YoY15.3%17.8%19.1%20.5%20.1%
QoQ4.9%5.5%4.2%4.6%4.5%
FORCAS1,2841,4311,5601,7121,830
YoY32.9%42.5%42.9%41.6%42.5%
QoQ6.2%11.4%9.0%9.7%6.9%
AD/NP495549580755740
YoY277.9%268.5%109.4%87.3%49.5%
QoQ22.8%10.9%5.6%30.2%-2.0%
INITIAL448500554615670
YoY38.0%43.3%50.1%47.1%38.0%
QoQ7.2%11.6%10.8%11.0%8.9%
NewsPicksARR2,5642,4832,5682,5832,668
YoY23.3%-4.8%1.3%2.6%4.1%
QoQ1.8%-3.2%3.4%0.6%3.3%
Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
Annual recurring revenue (ARR) refers to the revenue earned from subscriptions in the following year.
SPEEDA business: Key indicators
FY12/21FY12/22
Q1Q2Q3Q4Q1Q2Q3Q4
Number of customer companies1,7171,7641,8171,9011,946
YoY10.1%8.6%11.7%14.4%13.3%
QoQ3.3%2.7%3.0%4.6%2.4%
YoY net change158139190239229
QoQ net change5547538445
Churn rate1.3%1.3%1.2%1.0%0.9%
ARPA (JPY'000)328320320345359
YoY17.6%13.9%11.9%15.4%9.5%
QoQ9.7%-2.4%0.0%7.8%4.1%
ARR (JPYmn)5,8306,1496,4086,7007,000
YoY15.3%17.8%19.1%20.5%20.1%
QoQ4.9%5.5%4.2%4.6%4.5%
Revenue (JPYmn)1,5791,6401,7101,8801,944
YoY-22.4%22.1%27.9%23.1%
QoQ-3.9%4.3%9.9%3.4%
EBITDA (JPYmn)530560510510620
YoY8.2%7.7%0.0%13.3%17.0%
QoQ17.8%5.7%-8.9%0.0%21.6%
EBITDA margin33.6%34.1%29.8%27.1%31.9%
Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
The churn rate reflects the average monthly churn rate for the last 12 months.
Annual recurring revenue (ARR) refers to revenue earned from subscriptions in the following year.
Revenue refers to revenue generated from external customers, and does not include intersegment sales and transfers.
Expenses
Earnings (cumulative)FY12/21FY12/22
(JPYmn)Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4
Expenses3,1506,45310,01314,2933,786
YoY-8.1%-5.8%-1.4%5.3%20.2%
Purchase of goods196386565787224
YoY16.7%15.9%9.1%11.2%14.3%
Labor and outsourcing expenses1,0662,1343,3644,7441,250
YoY-22.0%-21.9%-16.6%-11.3%17.3%
Advertising expenses2805408211,316362
YoY52.2%33.7%53.5%53.4%29.3%
Personnel expenses7431,5422,4223,4141,044
YoY-12.1%-6.1%0.4%8.3%40.5%
Commission expenses230478665929271
YoY0.9%4.4%-4.3%-1.7%17.8%
Depreciation and amortization98203319442140
YoY-55.7%-54.6%-54.6%-45.5%42.9%
Other expenses5351,1661,8512,651492
YoY30.5%41.5%47.8%52.9%-8.0%
Quarterly resultsFY12/21FY12/22
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4
Expenses3,1503,3033,5604,2803,786
YoY-8.1%-3.4%7.6%25.5%20.2%
QoQ-7.7%4.9%7.8%20.2%-11.5%
Purchase of goods196190179222224
YoY16.7%15.2%-3.2%16.8%14.3%
QoQ3.2%-3.1%-5.8%24.0%0.9%
Labor and outsourcing expenses1,0661,0681,2301,3801,250
YoY-22.0%-21.8%-5.4%5.0%17.3%
QoQ-18.9%0.2%15.2%12.2%-9.4%
Advertising expenses280260281495362
YoY52.2%18.2%114.5%53.3%29.3%
QoQ-13.3%-7.1%8.1%76.2%-26.9%
Personnel expenses7437998809921,044
YoY-12.1%0.3%14.1%34.1%40.5%
QoQ0.4%7.5%10.1%12.7%5.2%
Commission expenses230248187264271
YoY0.9%7.8%-21.1%5.6%17.8%
QoQ-8.0%7.8%-24.6%41.2%2.7%
Depreciation and amortization98105116123140
YoY-55.7%-53.5%-54.7%13.9%42.9%
QoQ-9.3%7.1%10.5%6.0%13.8%
Other expenses535631685800492
YoY30.5%52.4%60.0%66.0%-8.0%
QoQ11.0%17.9%8.6%16.8%-38.5%
Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
Expenses correspond to the total of cost of revenue and SG&A expenses.
The company applied the “Accounting Standard for Revenue Recognition” from the start of Q1 FY12/22. This standard has been retroactively applied to figures from Q1 FY12/21 onward. Cumulative quarterly results for FY12/21 are the sum of quarterly (three-month) results.

Q1 FY12/22 results

  • Revenue: JPY4.3bn (+11.0% YoY)
  • EBITDA: JPY658mn (-20.2% YoY)
  • Operating profit: JPY517mn (-28.8% YoY)
  • Recurring profit: JPY700mn (+5.3% YoY)
  • Net income attributable to owners of the parent: JPY418mn (-11.4% YoY)

Results by segment

Earnings by segment were as follows.
The company restructured its segments in Q4 FY12/21 (October—December 2021). YoY changes are based on year-ago results restated under the new segment breakdown.

Uzabase restructured its segments in Q4 FY12/21 (October—December 2021).
・B2B businesses were previously disclosed as two segments (SPEEDA segment and Other B2B Businesses segment), but these will be disclosed as a single segment (SaaS segment).
・Services for enterprises NewsPicks Enterprise and NewsPicks Learning (enterprise edition) provided by consolidated subsidiaries AlphaDrive, AlphaDrive Kochi, and NewsPicks, Inc. were previously disclosed as the NewPicks segment. These businesses will be integrated as "AlphaDrive/NewsPicks" and become part of the SaaS segment.
・SPEEDA Edge, which was previously part of Other business (a segment not included in reportable segments), will be included in the SaaS segment.

In the SaaS segment, profit fell despite higher revenue, owing to a rise in costs. In the NewsPicks segment, revenue and profit both decreased.

SaaS
  • Segment revenue: JPY2.9bn (+26.5% YoY)
  • Segment EBITDA: JPY499mn (-2.0% YoY) 
  • Segment profit: JPY397mn (-12.7% YoY)
  • ARR: JPY10.3bn (+28.0% YoY)

ARR: Annual recurring revenue, which is revenue earned from subscriptions in the following year. ARR is calculated as monthly recurring revenue (MRR) x 12.

The SaaS segment delivers NewsPicks Enterprise and Incubation Suite businesses, which include services such as SPEEDA, INITIAL, SPEEDA Edge, FORCAS, FORCAS Sales, and AlphaDrive/NewsPicks.

The mainstay service SPEEDA gained new orders by strengthening its sales organization, including a domestic customer success team formed in FY12/21, as well as making progress in up-selling to existing customers. The company also attracted new customers in Asia (mainly China), where the impact of COVID-19 has started to diminish. The 12-month average churn rate improved 0.1pp from end-FY12/21 to 0.9%.

In addition to consulting firms, the company made progress on getting general businesses to use SPEEDA Expert Research. Flash Opinion, a feature that allows users to ask questions to experts on SPEEDA and receive text responses from five or more people within 24 hours, also contributed to the increase in revenue.

More enterprises adopted FORCAS, which supports customer strategies. The company also made progress on introducing FORCAS Sales to FORCAS customers.

In AD/NP (which supports organizational strategies), the company made progress in cultivating new customers for NewsPicks Enterprise (a product for HR development and organizational revitalization) and Incubation Suite (an integrated support product that specializes in new business development).

Segment revenue increased, but segment profit declined. Core service SPEEDA has been highly profitable, and INITIAL also contributed to profit. Others, such as FORCAS, FORCAS Sales, and AD/NP, however, produced losses. These losses are due to investments made to achieve strong growth rates of these services.

NewsPicks
  • Segment revenue: JPY1.4bn (-11.9% YoY)
  • Segment EBITDA: JPY178mn (-44.9% YoY)
  • Segment profit: JPY140mn (-49.8% YoY)
  • ARR: JPY2.7bn (+4.1% YoY)

The growth rate of paid subscribers slowed in Q2 FY12/21 (April–June 2021) in reaction to an increase in paid subscribers with annual discount contracts in Q2 FY12/20 (April–June 2020). The number of paid subscribers turned to a net increase again from Q3 FY12/21 (July–September 2021). The increase in paid subscribers pushed up subscription revenue to JPY611mn (+4.8% YoY).

The rate of growth in advertising revenue slowed, partly due to changes in the team structure. Revenue in the advertising business came to JPY702mn (-3.7% YoY).

Revenue in other businesses came to JPY86 million (-67.9% YoY). Revenue declined due to the closure of NewsPicks GINZA, and revenue from books published under the NewsPicks label decreased.

For details on previous quarterly and annual results, please refer to the Historical financial statements section.

FY12/22 company forecast 

FY12/22 forecast
FY12/21FY12/22
(JPYmn)1H Act.2H Act.FY Act.FY Est.
Revenue7,8638,20016,06319,500~20,000
YoY23.7%10.0%16.3%-
Cost of revenue2,9643,3196,283
Gross profit4,8994,8819,780
Gross profit margin62.3%59.5%60.9%
SG&A expenses3,6674,6528,319
SG&A ratio46.6%56.7%51.8%
EBITDA1,4344701,9041,000~1,500
YoY--54.0%107.6%-
EBITDA margin18.2%5.7%11.9%5.1%~7.5%
Operating profit1,2312291,460400~900
YoY--65.0%--
Operating profit margin15.7%2.8%9.1%2.1%~4.5%
Recurring profit1,1414351,576400~900
YoY-13.3%--
Recurring profit margin14.5%5.3%9.8%2.1%~4.5%
Net income743-154589
YoY---
Net margin9.4%-3.7%
Source: Shared Research, based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
* We did not provide YoY changes for FY12/22 in the above table, because the company is adopting the Accounting Standard for Revenue Recognition from FY12/22.

For FY12/22, the company forecasts revenue of JPY19.5–20.0bn, EBITDA of JPY1.0–1.5bn (JPY1.9bn in FY12/21), operating profit of JPY400–900mn (JPY1.5bn), and recurring profit of JPY400–900mn (JPY1.6bn). The company has adopted the Accounting Standard for Revenue Recognition from FY12/22. It expects a 26.0–30.0% YoY revenue growth in FY12/22 versus its FY12/21 revenue adjusted for the new standard (JPY15.4bn).  

The EBITDA from FY12/22 and beyond represents adjusted EBITDA (EBITDA = operating profit + depreciation + goodwill amortization + stock compensation expenses)
* The breakdown of EBITDA in the FY12/22 company forecast included operating profit of JPY400–900mn, depreciation of JPY280mn, goodwill amortization of JPY90mn, and stock compensation expenses of JPY190mn.
* The company plans to annually issue new shares for the amount of 1% of the total (on average) for the purpose of covering stock compensation, including stock options.

Uzabase aims to invest for growth in fast-growing services in the SaaS segment and achieve both sustained revenue growth (at over 30%) and stable profits. In the NewsPicks segment, it will seek to raise the service profile by making marketing investments in stages while monitoring effectiveness.  

The company adopted the new Accounting Standard for Revenue Recognition from FY12/22.
* In the SaaS segment, the company historically booked revenue from initial fees in lump sum at the start of new contracts. From FY12/22, initial fees are equally divided and booked over the term of contracts. This change reduces revenue and profit by roughly JPY30mn each.
* In the NewsPicks segment, advertising revenue was historically represented on a gross-basis. From FY12/22, presentation of advertising revenue has changed from gross to net for transactions in which the company's role is that of an agent. This change reduces revenue and cost of revenue by JPY310mn each, but there is no impact on profit.

Business policies for FY12/22

The company has outlined five key policies for FY12/22.

Continued investment in high-growth SaaS businesses; SPEEDA Expert Research, FORCAS, and AD/NP

Enhanced investment in data shared across SaaS

Phased investment to market NewsPicks and aim for the reacceleration of business growth

Synergy between SaaS and NewsPicks: Advance effort to consolidate user IDs (shared user IDs; see the "Medium- to long-term outlook" section)

Synergy between SaaS and NewsPicks: Establish NewsPicks as a marketing channel for the SaaS businesses (see the "Medium- to long-term outlook" section) 

SaaS segment

In FY12/22, the company expects segment revenue of roughly JPY13.0bn (a 30.0–33.0% YoY increase from FY12/21 segment revenue of JPY99.8bn adjusted to the new revenue recognition standard). It targets YoY revenue growth in the SPEEDA, FORCAS, AlphaDrive/NewsPicks (AD/NP), and INITIAL businesses.

Revenue from SPEEDA finished at JPY6.8bn in FY12/21, up 24.3% YoY. The number of customer companies and ARPA increased. Shared Research understands that the company will continue to seek YoY revenue growth by over 20% in this business. Revenue from the SPEEDA Expert Research business added JPY479mn (+274.2% YoY) to the SPEEDA revenue in FY12/21, and the company expects continued revenue growth in this business in FY12/22.

In the FORCAS business, revenue was up 42.9% YoY to JPY1.5bn in FY12/21. We understand the company aims for a YoY increase by over 40% in FY12/22. The number of customer companies is projected to increase, in part due to the bundled usage of FORCAS and the sales research platform FORCAS Sales, which the company introduced in Q4 FY12/20.

In AD/NP, revenue was JPY1.2bn (+71.8% YoY). Since this business is in a high-growth stage, we think the company will seek continued YoY revenue growth by over 50% in FY12/22.

Revenue from the INITIAL business was JPY551mn (+39.8% YoY). In this business, we understand the company aims for a YoY revenue increase by roughly 40% in FY12/22.

On the profit front, the company targets EBITDA of JPY1.9–2.2bn in FY12/22, versus EBITDA of JPY1.6bn in FY12/21 (Note: Shared Research calculation based on company materials) 

Revenue increases described above are projected to lift EBITDA by JPY1.0–1.3bn.

Meanwhile, the company expects an expense increase of JPY2.0bn to exert downward pressure on EBITDA. This figure includes a JPY490mn increase in marketing expenses, a JPY460mn increase in personnel expenses for engineers, and a JPY1.0bn increase in other personnel expenses (mainly related to the sales force).

Of the increase in other companywide expenses (estimated at JPY1.05bn), the allocation of indirect expenses in proportion to segment revenue will reduce EBITDA in SaaS by JPY700mn (based on calculation by Shared Research). 

NewsPicks segment

The company expects segment revenue of roughly JPY6.5bn (18.0–21.0% YoY increase from FY12/21 segment revenue of JPY5.5bn adjusted for the new revenue recognition standard and deducting the downward impact from closing NewsPicks GINZA). The company projects YoY revenue growth in both the advertising business and the paid subscription business.

In the advertising business, revenue was JPY2.3bn in FY12/21 (+18.0% YoY). Shared Research understands that revenue will increase by roughly 20% YoY in FY12/22, driven mainly by ads in video content. 

In the paid subscription business, revenue stood at JPY2.3bn in FY12/21 (+6.3% YoY), and Shared Research expects YoY revenue growth by roughly 20% in FY12/22. Uzabase expects the number of paid subscribers to increase in tandem with the enhancement of video content. The company says the ratio of new paid subscribers acquired through the video channel (thanks to improved video content and distribution to platforms such as YouTube) has been on the rise, surpassing 30% by Q3 FY12/21. It expects this ratio to exceed 50% in the medium term.  

In FY12/21, other businesses logged a revenue of JPY852mn, up 39.9% YoY. In FY12/22, the company expects revenue in the NewSchool business to decline by JPY300mn YoY due to the closure of NewsPicks GINZA. 

On the profit front, the company forecasts segment EBITDA of minus JPY800mn to minus JPY600mn versus segment EBITDA of JPY488mn in FY12/21 (Note: Shared Research calculation based on company materials)

Revenue increases described above are expected to raise EBITDA by JPY400–500mn.

Meanwhile, expense increase of JPY1.3bn is expected to add downward pressure on EBITDA. This figure breaks down to a JPY730mn rise in marketing expenses, a JPY170mn increase in personnel expenses for engineers, and another JPY370mn increase in other personnel expenses (mostly for editors and reporters). The company plans to increase spending on marketing activities to ensure future growth of NewsPicks; it plans to invest in stages while assessing marketing effectiveness.    

Of the increase in other companywide expenses (estimated at JPY1.05bn), the allocation of indirect expenses commensurate to segment revenue will reduce EBITDA in NewsPicks by JPY350mn (based on calculation by Shared Research). 

Companywide expenses

In FY12/21, company expenses stood at JPY1.3bn. In FY12/22, the company expects this figure to increase by JPY1.05bn, divided into JPY320mn from investment in in-house systems and JPY720mn in other expenses. The latter includes a one-off expenditure associated with office relocation. 

Medium- to long-term outlook

Announcement of long-term management strategy

In December 2021, Uzabase unveiled a long-term management strategy, the details of which are outlined below.

The company targets revenue of JPY45.0bn and an EBITDA margin of 15% in FY12/25. It sees revenue growing at a CAGR of 30% based on its revenue forecast of JPY15.9bn for FY12/21, and its EBITDA margin increasing from its forecast of 11.6% for FY12/21.

From FY12/22 to FY12/25, the company plans to mainly concentrate its investments in three businesses: SPEEDA Expert Research, FORCAS, and AlphaDrive/NewsPicks. It also aims to create new businesses to support sustainable growth and profit expansion in its Software as a Service (SaaS) operations. 

It plans to push ahead with the integration of its SaaS platforms and NewsPicks, and produce a cycle whereby NewsPicks users are either converted into SaaS subscribers or brought on as experts. It also intends to link its SaaS platforms marketing with NewsPicks.

It will target a combined revenue growth rate and EBITDA margin of 40% or more across all its SaaS businesses, and create new businesses (upsell products). 

In the NewsPicks segment, it plans to expand paid subscribers through video-centric marketing in FY12/22 and beyond.

Each year, it will appoint group executive officers (with a one-year tenure) from among its existing executive officers (including those overseeing individual businesses) based on the priority management issues facing the group at the time. From FY12/22, it will pay a certain portion of the compensation to executive officers in stock (50% for group CEOs and 30% on average for other group executive officers). 

Changes to segment structure:
・Through FY12/21, Uzabase had classified its B2B operations into the SPEEDA segment and the Other B2B Businesses segment, and reported results accordingly. From FY12/22, it will consolidate both segments and report their results under the new SaaS segment.
・Through FY12/21, the company had reported results for its consolidated subsidiaries Alphadrive Co., Ltd., Alphadrive Kochi Co., Ltd., and the NewsPicks Enterprise and NewsPicks Learning (corporate version) services under the NewsPicks segment. From FY12/22, it will report results for these subsidiaries and businesses under the AlphaDrive/NewsPicks (AD/NP) business in the SaaS segment.

Overview of AD/NP services
NewsPicks Enterprise: A customized version of NewsPicks for corporate customers that functions as a tool for human resources development and organizational revitalization. In addition to the services provided to individual paid subscribers, the NewsPicks Enterprise service adds features specific to customer companies such as news curation by employees of such companies, posting of internal articles, and streaming of videos of internal events. Noteworthy news articles can be picked and shared by employees, and internal management policies and other topics can be distributed in a form that resembles an internal newsletter. Employees can learn from each other’s contributions, and collectively build a common language and knowledge base. This in turn helps foster an organizational culture that is conducive to bottom-up reform.

Incubation Suite: A comprehensive support tool for the development of new businesses that consolidates all the necessary support for new business development into a single platform. It features a range of functions from management functions to support administrative staff who manage new business systems, to content that accelerates the learning of staff who make new proposals.  

Integration of SaaS services and NewsPicks

Target users of SaaS platforms and NewsPicks

Uzabase’s services can be broadly divided into its SaaS platforms and its NewsPicks business media service, and the company thinks both essentially target the same user base—namely, individuals involved in corporate management. For this reason, it plans to integrate its SaaS platforms and NewsPicks over the medium term, and aims to generate the synergies described below.

The company’s SaaS platforms provide corporate business strategy services (SPEEDA and INITIAL), corporate customer strategy services (FORCAS), and corporate organizational and business strategy services (AD/NP). In other words, all of its platforms offer services to individuals involved in corporate management.

NewsPicks is Japan’s largest business news media service. While it provides value to a wider user base than Uzabase’s SaaS platforms, including all business professionals and some students, it mainly targets individuals involved in corporate management.

Existing integration of SaaS platforms and NewsPicks 

As discussed later, the corporate and industry databases of Uzabase’s SaaS platforms, NewsPicks, and NewsPicks Expert all utilize the same business data.

The company provides original NewsPicks articles to SPEEDA users as a type of content. From FY12/21, it also made such articles available to INITIAL and FORCAS Sales users.

Mimir, Inc., acquired by Uzabase in April 2020, operates the NewsPicks Expert database that stores data on experts from a broad range of fields, including top management, business professionals, and academics. From among this pool of registered experts of NewsPicks Expert, some became “professional pickers” for the company’s business news media service, NewsPicks. In May 2020, Mimir launched the SPEEDA Expert Research services, which combine NewsPicks Expert and SPEEDA functions to provide expert insights, experience, and knowledge to SPEEDA users in the form of interviews, report creation, and advisory services.

In the AlphaDrive/NewsPicks business, the company operates the NewsPicks Enterprise service, which is a customized version of NewsPicks for corporate customers that functions as a tool for human resources development and organizational revitalization.  

New integration of SaaS platforms and NewsPicks envisioned through FY12/25

Through FY12/25, Uzabase will continue to integrate its SaaS platforms and NewsPicks in accordance with the timeline below. Specifically, it will consolidate the user IDs for its SaaS platforms and NewsPicks business media service, and organize online events for its SaaS platforms in collaboration with NewsPicks. In FY12/24, the company expects NewsPicks to become the largest marketing channel for all its SaaS platforms.

Timeline for integration of SaaS platforms and NewsPicks
YearTarget
FY12/21Utilizes NewsPicks for FORCAS Sales. Integrate user IDs (completed)
Integrate editorial departments of INITIAL and NewsPicks (completed)
Utilizes NewsPicks for INITIAL. Integrate user IDs (completed)
FY12/22 (Planned) Develop SaaS online events in collaboration with NewsPicks
Complete user ID integration for FORCAS and NewsPicks
FY12/23 (Planned) Complete user ID integration for SPEEDA and NewsPicks (Completion of all SaaS ID integration)
FY12/24 (Planned) NewsPicks to be the largest marketing channel for all SaaS platforms
Synergies from integration of SaaS platforms and NewsPicks
Securing SaaS users and experts from NewsPicks’ user base

Uzabase aims to grow its NewsPicks user base, expanding the number of individuals who can be converted into SaaS users.

It also plans to find experts within the NewsPicks user base, and have them register with its NewsPicks Expert service. In this way, it aims to create a structure that accumulates human insight and business data. Its objective is to ensure that SaaS users who struggle with management challenges can easily gain access to the insights they need, by matching them to a diverse range of experts who specialize in various fields.

Marketing SaaS businesses through NewsPicks

To grow its SaaS businesses, Uzabase will need to step up its marketing spending. However, it thinks it can improve its marketing efficiency by partially utilizing ads on NewsPicks. The company thinks this is a feasible strategy because its SaaS and NewsPicks services target the same customer base (namely, individuals involved in corporate management), as explained above.  

In the past, Uzabase organized offline events to market its SaaS businesses and secure leads (prospective customers). However, it was forced to suspend offline events due to the COVID-19 outbreak. In the absence of such events, the company has created and provided online business video content to promote its SaaS businesses. It says it has been able to secure leads through these efforts, mainly among business professionals involved in corporate management. From FY12/22, it hopes to create and provide further online business video content through NewsPicks, essentially transforming NewsPicks into a funnel structure that drives NewsPicks users to its SaaS platforms over the long term.

Growth strategy for SaaS platforms

Growth potential and profitability in SaaS businesses 

SaaS providers that achieve a combined revenue growth rate and EBITDA margin of over 40% are regarded as successful (Rule of 40), according to the company. From Q4 FY12/17 to Q3 FY12/21, the combined revenue growth rate and EBITDA margin for all the company’s SaaS businesses exceeded 50%.

From FY12/22 to FY12/25, Uzabase aims to keep this metric above 40% for all its SaaS businesses.  

As of September 2021, Uzabase’s annual recurring revenue (ARR) of JPY9.2bn amounted to only 8% of its serviceable obtainable market (SOM) of JPY112.5bn, leaving ample room for growth.

The company has expanded its SOM by creating new businesses and products since its founding, and it plans to further expand its potential target market over the medium term.

As its past acquisitions of SaaS businesses have all been successful, Uzabase plans to further explore M&A deals to secure growth over the medium term.

Low SaaS revenue versus potential target market implies ample room for growth 
Potential target market for SaaS businesses 

The company’s SaaS platforms provide corporate business strategy services (SPEEDA and INITIAL), corporate customer strategy services (FORCAS), and corporate organizational and business strategy services (AD/NP). The total addressable market (TAM) for these services in the management consulting fields is worth JPY1.2tn domestically and JPY20tn globally. However, as of December 2021, the company estimated its SOM at JPY112.5bn. 

As of September 2021, the company’s ARR of its SaaS businesses stood at JPY9.2bn. Its SOM was more than 10x that figure, while its TAM was more than 10x its SOM. 

・The total addressable market (TAM) is the scale of the potential market for Uzabase’s SaaS businesses. The size of the domestic TAM is based on the domestic consulting services market projections included in “Announcement of Domestic Consulting Services Market Projections” released by IDC Japan Ltd. in July 2021. The global TAM is derived from “Management Consulting Services: Global Market Trajectory & Analysis” released by Global Industry Analysts Inc. (GIA).
・The serviceable obtainable market (SOM) is an estimate by Uzabase obtained by calculating the number of target companies for each SaaS platform using FORCAS, and tallying the expected average revenue per account (ARPA) for each platform.  

Expanding the SOM for SaaS platforms

Uzabase says the SOM for its SaaS businesses could expand as it adds new features and develops new products. When it released SPEEDA in May 2009, its main target customers were securities companies and consulting firms, and its SOM stood at JPY12.0bn at the time. Thereafter, it continued to add new features to expand its target customer base to companies other than securities companies and consulting firms. After the launches of INITIAL and FORCAS, its SOM grew to JPY41.5bn as of 2017. The company later added AD/NP, SPEEDA Expert Research, FORCAS Sales, and SPEEDA R&D, and its SOM accordingly reached JPY112.5bn as of December 2021.  

In this way, Uzabase has continued to draw on its business data to create new SaaS platforms. Based on a strong track record in developing new products, it has accumulated the expertise to create services that are needed by its customers. It plans to further utilize this expertise to develop new products over the medium term.

Track record in new SaaS products 

Amid the expansion in its potential target market, the company says it has achieved high growth across all its SaaS products. Notable examples of this are FORCAS, which achieved ARR of JPY1.5bn in roughly four years after its release, and AD/NP, which achieved ARR of JPY600mn in its first 18 months of operation.  

Track record in SaaS business
Launch yearARR (JPYmn)YoYSOM (JPYmn)
SPEEDA20096,41019%50,000
INITIAL201755050%5,000
FORCAS20171,56043%420
AD/NP2019610123%15,500
Total9,17029%112,500
Source: Shared Research based on company data
Note: Figures are as of end-September 2021.  
Successful acquisitions in the SaaS business 

The company says all its previous acquisitions in the SaaS business have been successful, as shown below. It regards M&A deals as part of its growth strategy, and plans to continue investing in acquisitions going forward.

INITIAL was consolidated by Uzabase in January 2017, and its revenue had increased roughly 13x by FY12/21. INITIAL shares its development and marketing structure with Uzabase. 

Mimir was consolidated by Uzabase in May 2020, and its revenue had more or less tripled by FY12/21. It developed the SPEEDA Expert Research services, and released the Flash Opinion service. 

Alphadrive was consolidated by Uzabase in November 2019, and its revenue had roughly quadrupled by FY12/21. It developed the NewsPicks Enterprise service, and released the Incubation Suite.

Growth strategy for NewsPicks

In the NewsPicks segment, Uzabase plans to conduct video-centric marketing from FY12/22 to increase its paid subscriber base. It has decided to take this approach based on survey results pointing to a low brand recognition of NewsPicks and a high video usage by smartphone users, as well as due to a growth trend in NewsPicks paid subscribers acquired through videos.

Low brand recognition of NewsPicks and high video usage by smartphone users
NewsPicks’ brand recognition is low compared with rival business media services, leaving room for growth

According to a survey on business media brand recognition conducted in January 2020, NewsPicks had a brand recognition of 39% compared with average rates of 91% for the three major Japanese newspapers (including their online editions), and 75% for three business magazines (including their online editions). While NewsPicks’ brand recognition is only at around half the level of that of rival business media, Uzabase views the survey results as a sign that the brand recognition of NewsPicks has room to expand.

Video viewing by smartphone users is roughly twice the level of news reading

In a survey that gauged major trends in smartphone-based Internet usage (prepared by Uzabase based on the results of a TIMES & SPACE questionnaire), 66.1% of the respondents indicated they used their device to watch videos online, while 37.1% said they used their device to read the news online. In other words, videos viewing by smartphone users was roughly twice the level of news reading.

Production and provision of video content on NewsPicks, and video-driven acquisition of paid subscribers

The company has produced and provided original video content on NewsPicks from around 2017. It explains that it has gained insights into the type of content that appeals to users and contributes to the acquisition of paid subscribers through its previous experience in this area and related data analysis, and that it is now able to produce content that will effectively bring in paid subscribers.

The company has expanded its business-related video content, and provides these on platforms such as YouTube. These efforts have already driven growth in video-mediated acquisitions of paid subscribers of NewsPicks, which exceeded 30% of the total paid subscriber acquisition in Q3 FY12/21. The company aims to drive up that ratio to over 50% over the medium term. 

Targets for FY12/25 

Financial targets for FY12/25
Financial targets for FY12/25
FY12/20FY12/21FY12/22FY12/25
(JPYmn)Act.Est.ProjectionTargetsCAGR
Revenue13,80915,900-45,00030%
EBITDA9171,8501,000–1,5006,75038%
EBITDA margin6.6%11.6%-15.0%-
Source: Shared Research based on company data
Notes: The EBITDA target for FY12/25 is calculated based on the revenue target and an EBITDA margin target of 15%.
The EBITDA for FY12/22 and beyond represents adjusted EBITDA (Operating profit + Depreciation + Goodwill amortization + Stock compensation expenses). 

Uzabase targets revenue of JPY45.0bn in FY12/25, corresponding to a CAGR of 30% based on its FY12/21 revenue forecast of JPY15.9bn.

The company looks for EBITDA of JPY1.0–1.5bn in FY12/22 (forecast of JPY1.9bn in FY12/21). It expects a decline in EBITDA due to investments (higher cost burden) in personnel expansion in its SaaS businesses, and in marketing for NewsPicks. As noted below, the company shows its EBITDA target as a range (JPY1.0–1.5bn) to reflect fluctuations in its marketing budget for the NewsPicks segment. Thereafter, it plans to gradually increase its profitability, and achieve an EBITDA margin of 15% in FY12/25 (forecast of 11.6% in FY12/21).

Investment strategy by segment

From FY12/22 to FY12/25, Uzabase plans to pursue the following investment strategies.

The company will target a combined revenue growth rate and EBITDA margin of 40% or more across all its SaaS businesses. 

In the NewsPicks segment, the company plans to gradually invest in marketing. It will steadily increase its marketing spending if the lifetime value (LTV) of paid subscribers acquired through its marketing efforts clearly exceeds their acquisition cost.

If it can efficiently market its SaaS platforms on NewsPicks, the company says it will tolerate a loss (negative EBITDA) in the NewsPicks segment in FY12/22 with the aim of bringing the segment back into the black in FY12/23, and gradually improving profitability thereafter. 

For new businesses launched in FY12/22 or beyond, the company aims to achieve monthly profitability within the first three years of operation.

Visions for each segment in FY12/25, and major investment areas 

From FY12/22 to FY12/25, the company plans to mainly concentrate investments in three businesses: SPEEDA Expert Research, FORCAS, and AD/NP. It also aims to create new businesses to support sustainable growth and profit expansion in its SaaS businesses. The following table outlines the visions for each business in FY12/25, and major investment areas.

Visions for each segment in FY12/25, and major investment areas
BusinessVision for end-2025Main investment areas
SaaSSPEEDACreate up-selling products following SPEEDA Expert Research and SPEEDA R&D, and continue to expand customer value and increase ARPA・SPEEDA Expert Research
・Development of up-selling products
FORCASDiffuse the use of FORCAS in the fields of sales, customer success, product development, and management strategy on top of marketing use・FORCAS Sales
・Company analysis by using AI/ML
AD/NPIncrease autonomous employees (who set their own rules and act according to those rules) at companies・Development of up-selling products
NewsPicksIncrease brand recognition of NewsPicks to over 80%, or 2x the current level・Increase the brand recognition
・Video
GlobalSPEEDA SPEEDA EdgeEstablish the growth model of SPEEDA China and develop the model in other regions including the US・SPEEDA China
・SPEEDA Edge
Source: Shared Research based on company materials
Note: AI/ML stands for artificial intelligence (AI) and machine learning (ML). 

Business

Business overview

Uzabase provides services such as SPEEDA, an online business intelligence platform geared toward corporate customers that facilitates company and industry analysis, and NewsPicks, a business news media service that also functions as a social media platform. It operates in two segments: SaaS and NewsPicks.

Segment overview, % of revenue, and operating profit
Segment% of revenue% of operating profit% of EBITDADescription
SaaS62.1%76.2%83.0%SPEEDA (Online business intelligence platform providing company and industry analyses to corporate customers)
FORCAS (B2B marketing platform)
AD/NP (Services associated with organizational and business strategies of companies)
INITIAL (Database on startups)
SPEEDA Edge (Service for business people who wish to collect information on trends regarding cutting-edge technology)
NewsPicks37.9%29.6%25.6%News media service that curates financial, economic, and business news content distributed by various domestic and overseas news media

Uzabase restructured its segments in Q4 FY12/21 (October—December 2021).
・B2B businesses were previously disclosed as two segments (SPEEDA segment and Other B2B Businesses segment), but these will be disclosed as a single segment (SaaS segment).
・Services for enterprises, NewsPicks Enterprise and NewsPicks Learning (enterprise edition) provided by consolidated subsidiaries AlphaDrive, AlphaDrive Kochi, and NewsPicks, Inc. were previously included in the NewPicks segment. These businesses will be integrated as "AlphaDrive/NewsPicks" and become part of the SaaS segment.
・SPEEDA Edge, which was previously part of Other business (a segment not included in reportable segments), will be included in the SaaS segment.

Earnings by segment
FY12/19FY12/20FY12/21
(JPYmn)
Revenue12,52113,80916,063
YoY10.3%16.3%
SaaS5,6327,58510,012
YoY34.7%32.0%
NewsPicks4,0245,2886,106
YoY-31.4%15.5%
Quartz2,943972-
Adjustments--37-55
Operating profit-1,2361041,460
YoY---
Operating profit margin-0.8%9.1%
SaaS-2,1952,178
YoY---0.8%
Operating profit margin-28.9%21.8%
NewsPicks-807846
YoY--4.8%
Operating profit margin-77.9%29.6%
Quartz-2,693-1,961-
Adjustments--932-1,400
Direct EBITDA-4119171,904
YoY--323.1%107.6%
% of revenue-6.6%11.9%
SaaS-2,3392,388
YoY--2.1%
% of revenue-30.8%23.9%
NewsPicks-907980
YoY--8.0%
% of revenue-17.2%16.0%
Quartz-2,024-1,466-
Adjustments-566-858-1,300
EBITDA-4119171,904
YoY--323.1%107.6%
% of revenue-6.6%11.9%
SaaS1,4201,8661,580
YoY-31.4%-15.3%
% of revenue25.2%24.6%15.8%
NewsPicks327578488
YoY-76.8%-15.6%
% of revenue8.1%10.9%8.0%
Quartz-2,160-1,527-
Adjustments133-
Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
Direct EBITDA in each segment reflects segment profit/loss to which depreciation and goodwill amortization have been added.
In FY12/19, Uzabase changed its allocation method for groupwide expenses. As a result, compared with the allocation standard used in FY12/18, operating profit in FY12/19 was up JPY490mn in the SPEEDA segment, up JPY87mn in the NewsPicks segment, up JPY28mn in the Quartz business, and up JPY24mn in other businesses, while adjustments were down JPY629mn.

SaaS segment (FY12/21: 62.1% of total revenue, 76.2% of operating profit before adjustments)

The SaaS segment comprises the former SPEEDA segment, the former Other B2B Businesses segment, AlphaDrive/NewsPicks (AD/NP), and SPEEDA Edge. By service, SPEEDA, FORCAS, INITIAL, AD/NP, and SPEEDA Edge fall under the SaaS segment.

SaaS segment: Revenue, EBITDA, and description by service
__% of  revenueEBITDA (JPYmn)Description
SPEEDA68.4%2,165Online business intelligence platform that provides company and industry analyses to corporate customers
FORCAS14.9%-180B2B marketing platform
AD/NP11.6%-271Services associated with organizational and business strategies of companies
INITIAL 5.5%125Database on startups
SPEEDA Edge0.2%-259Service for business people who wish to collect information on trends regarding cutting-edge technology
Note: % of revenue refers to the % of segment revenue in SaaS.
SaaS segment: Revenue and EBITDA by service
FY12/19FY12/20FY12/21
(JPYmn)
SaaS5,6327,58510,012
YoY34.7%32.0%
SPEEDA4,5435,5096,845
YoY21.3%24.3%
FORCAS6211,0411,488
YoY42.9%
AD/NP2316771,163
YoY193.1%71.8%
INITIAL262394551
YoY50.4%39.8%
SPEEDAEdge--16
YoY---
EBITDA1,4201,8661,580
YoY-31.4%-15.3%
% of revenue25.2%24.6%15.8%
SPEEDA1,5972,0012,165
YoY-25.3%8.2%
% of revenue35.2%36.3%31.6%
FORCAS-170-103-180
YoY---
% of revenue---
AD/NP-45-75-271
YoY---
% of revenue---
INITIAL1391125
YoY-600.0%37.4%
% of revenue5.0%23.1%22.7%
SPEEDAEdge--46-259
YoY---
% of revenue---
Adjustments25-10
Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.

SPEEDA (FY12/21: 42.5% of total revenue, EBITDA of JPY165mn)

SPEEDA is an online business intelligence platform geared toward corporate customers that facilitates company and industry analysis. It is offered as a Software as a Service (SaaS). Contracted users can connect to the service from any location via the Internet. The service provides one-stop access to financial and stock data for more than 7.4mn listed and unlisted companies in over 200 countries, information on just under 2mn M&A deals from around the world, economic data such as global economic statistics, patent trends, and other data.

Through the service, users can rapidly get up to speed with various industries, markets, and competitive environments through region-specific analytic reports for over 560 industries written by the company’s professional analysts. They also have access to SPEEDA Trends, a service that provides original content in the form of reports by in-house analysts covering topics such as the latest technology trends and transformations in business models.

SPEEDA was developed by two founding members of Uzabase who had previously worked at an investment bank, and had experienced firsthand the inefficiencies in the process of aggregating data and materials. To overcome these issues, they developed a user-centric service that supports efficient data retrieval, aggregation, analysis, and processing. Uzabase says SPEEDA stands out by virtue of its intuitive operation, allowing users to easily search data on companies and industries around the world without having to consult a manual. The service also facilitates online editing and processing of the data, which can be downloaded in a range of file formats (such as Microsoft Excel/PowerPoint, PDF) at the click of a button. It does not require any software to be installed locally, and contracted users can start taking advantage of roughly half of its features from day one.

The primary customers for SPEEDA are financial institutions, consulting firms, accounting firms, and other general businesses. As of June 2021, financial institutions accounted for 45% of the customer base and general businesses for 55%. Uzabase offers an English-language version of SPEEDA in Asia, mainly in China. The company has customers for the service in Japan and 15 other countries in the world (chiefly in Asia). 

Characteristics of SPEEDA service

According to the company, the three distinguishing features of SPEEDA are (1) its coverage of a diverse range of business information, (2) its broad accessibility, and (3) the extensive support it offers with support desk.

To give a concrete example of how the service works, when a user wishes to retrieve information for a specific company, SPEEDA looks through data for listed companies from around the world. By entering a company name and clicking the “Auto-generate” button, users can download industry data and company information in a range of file formats that include Microsoft Word, Excel, and PowerPoint, as well as PDF. In a few simple steps, users also can automatically generate an information file that contains a corporate profile, financial statements, graphical earnings data, and other information. This process only takes about 30 seconds. For overseas information, the service has a support desk staffed by overseas employees who search information on behalf of users.

In other words, SPEEDA automates the first half of the business process, which consists of gauging conditions (aggregating, processing, analyzing, and organizing information), assessing situations, making plans, and implementing these. This ensures users can devote more time to planning and implementation in the second half of the business process, and concentrate on tasks that create value-added.

Data available on SPEEDA

SPEEDA allows users to retrieve the information and access the features outlined below.

Data available on SPEEDA
CategoriesCoverageData
CompaniesJapanListed3,800 companiesCorporate profiles, financial statements, market data (share prices, etc.), valuation multiples, disclosure materials, IR data, news/HR data
Unlisted1.4mn companiesCorporate profiles, basic financial statements (only for some companies), paid credit research reports (Tokyo Shoko Research)
GlobalListed60,000 companies (over 99% of all listed companies)Corporate profiles, financial statements, market data (share prices, etc.), valuation multiples, disclosure materials, IR data, news/HR data
Unlisted6.9mn companies (mainly in Asia)Corporate profiles, basic financial statements (only for some companies), paid credit research reports
Industries560 industries・Over 3,000 industry reports (global: 200, Japan: 500, China: 300, Malaysia: 300, Indonesia: 300, US: 300, India: 300, Thailand: 250, Singapore: 250) ・Roughly 2,500 free industry and product reports
TrendsOver 90 reportsNext-generation batteries, hydrogen energy, inbound, electric vertical take-off and landing (eVTOL) aircraft, smart factories, virtual reality (VR)/mixed reality (MR)/augmented reality (AR), subscriptions, 5G, EdTech, etc.
NewsOver 160 media (Japan)Business media, industry-specific and specialized media, overseas information, HR data, etc.
Over 2,000 media (overseas)
MacroOver 200 countries・Basic macroeconomic data for different countries (UN, world bank, IMF) ・Detailed macroeconomic data for Japan and China
M&A dealsJust under 2.0mnDeal summaries (format, the first observation date, announcement date), parties (targets, buyers, sellers), acquisition price, advisers and investors
Registered experts7,000 (Japan)Active managers, consultants, engineers, analysts, and researchers
1,000 (overseas)
Source: Company materials
Company information

SPEEDA provides access to data on companies in more than 200 countries. It contains corporate profiles, financial data, segment information, director information, shareholder data, stock data, disclosed materials, and other information for over 99% of the listed companies around the world. For unlisted companies, the service stores corporate profiles, major financial data (partially as ranges) for some 1.4mn Japanese companies, and corporate profiles, major financial data, director information, shareholder data, and other information for roughly 6.9mn overseas companies mainly in Asia. The data available on the platform include both proprietary data compiled by the company and data sourced from paid external financial data services.

Industry information

The service provides access to the company’s original industry reports for over 560 industries in various countries with a particular focus on countries in Asia such as Japan, China, Malaysia, Indonesia, Thailand, and Singapore. 

The original industry reports are written by in-house analysts, and only made available on SPEEDA. They allow readers to rapidly gather qualitative information such as key characteristics of various industries, quantitative information such as market growth trends, and data on important industry players. In addition to the original reports, readers can obtain industry reports from external services affiliated with Uzabase. Some of these are offered for free, while others require additional fees.

M&A information

The service stores data on just under 2.0mn M&A deals from around the world going back to 2000. It provides information such as deal summaries, valuations, advisors, and capital providers.

News

SPEEDA provides news articles from over 160 Japanese-language media and over 2,100 English-language media. Users can create news alerts for key words or company names, and are subsequently notified by email when a relevant news article is posted.  

Analysis and search features

Users can compare and analyze financial information of several companies, analyze stock prices, compare or conduct time-series analyses of historical valuation multiples (trends of a company’s financial figures and share multiples), conduct full-text searches on securities reports and other disclosed materials, as well as search news articles, reports, company IR materials, and statistical data published by various countries.

Other optional features

In addition to the aforementioned standard data and features, users can subscribe to optional data and features. A major optional feature is the Excel Plug-in, which allows users to directly download SPEEDA data into Microsoft Excel. 

Support desk

SPEEDA users can interact with in-house consultants and analysts through a support desk. The extent to which they can consult with the support desk is determined by their contract fees. The support desk provides guidance on how to use the service, and also offers support for user requests related to data creation and research.

Other optional features and service plans of SPEEDA
Patent Trend Search feature 

In November 2019, Uzabase launched the new Patent Trend Search feature for SPEEDA, supplementing the company and industry data—that had hitherto been the platform’s forte—with patent data (technical information). According to the company, this new feature not only enables customers to get a comprehensive overview of business structures and economic trends, but also allows them to devise strategic proposals and generate future business opportunities, including new businesses. 

By having access to technical information such as the number of patents and the frequency of patent citations for various companies, and how these numbers have changed over the years, users can discover potential technology partners or competitors, or identify future customer bases. Users can also cross-analyze financial and patent data, and analyze correlations between industries and technologies.  

Research Literature Search feature

In October 2021, Uzabase partnered with JDream III, Japan’s largest science and technology research literature information service, and launched the new Research Literature Search feature for SPEEDA. The feature allows users to search data supplied by JDream III from within the roughly 500 technology categories built into SPEEDA (advanced technology fields that can be easily linked to economic data).

The fusion of SPEEDA’s business data and JDream III’s research literature information allows users, such as intellectual property (IP) and research and development (R&D) divisions of companies, to gather information on trends in research literature data that may prove useful from a management or business standpoint. This in turn can shed light on mutual links, or contribute to an expansion in partnership opportunities.

JDream III: A database of Japanese and overseas scientific, medical, and pharmaceutical research literature that can be searched in Japanese. It contains over 80mn literature ranging from Japanese and overseas academic papers to academic journals, conference records (minutes, paper collections, and proceedings), technical reports released by companies, and public documents. The data is provided by the Japan Science and Technology Agency (JST), and the database has been developed and is operated by G-Search Limited.

SPEEDA Expert Research services

The SPEEDA Expert Research services supply information, experience, and expertise of distinguished experts in each industry and field to users in the form of interviews, report creation, and advisory support. This service was built by integrating the Expert Research business of Mimir, Inc., which was added to the Uzabase group as a subsidiary in May 2020, into the SPEEDA platform. They allow users to supplement the information and data of SPEEDA with information, experience, and insights from various experts, and thus enhance the precision of their decision-making.

A key service of the SPEEDA Expert Research of Mimir is FLASH Opinion, which allows SPEEDA users to submit inquiries to experts and receive a response within 24 hours.

Mimir has developed a domestic network of roughly 17,000 experts (referred to as its expert network), and provides the opinions of such experts to corporate planning divisions and managers that head up new businesses in an effort to support their decision-making. In August 2020, Mimir entered into a business alliance with US-based GlobalWonks, Inc. (currently, Enquire AI, Inc.), a company that maintains a network of roughly 14,000 experts across more than 180 countries. In December 2021, it forged a business alliance with Arches Pte. Ltd., which has a network of about 50,000 experts in five global cities primarily in Southeast Asia. As of February 2022, the company has the capability to interview over 80,000 overseas experts. 

The Expert Research services are provided under a ticket-based system. Users purchase several tickets in advance, and use a ticket every time they use one of the services. The company books the purchase value of the tickets as advances received, and recognizes and records the amounts as revenue once an Expert Research service is used.    

A company that operates a similar service is VisasQ Inc. (TSE Mothers: 4490). VisasQ provides data sourced from over 400,000 industry experts to institutional investors and companies in the form of interviews (VisasQ interviews) and online surveys (VisasQ expert surveys). VisasQ had 735 corporate client accounts in FY02/21 (+51.5% YoY), and reported transaction value of JPY2.0bn (+61.8% YoY) for ad-hoc consulting (VisasQ interviews).

According to Uzabase, the SPEEDA Expert Research services have an advantage over VisasQ’s services because they offer users a combination of SPEEDA data, expert knowledge, and first-hand information, which can complement existing information and analyses. Another advantage the company has over VisasQ is that it can promote SPEEDA Expert Research as optional services to existing SPEEDA customers. 

SPEEDA: Customers, sales approach, structure, and major subsidiaries
Customers

In FY12/21, the SPEEDA service had 1,901 customer companies (+14.4% YoY). As of June 2021, financial institutions accounted for 45% of the total customers, and general businesses for 55%.

Financial institutions, including institutional investors, mainly use the service for research purposes such as analyzing the financials of investment or research targets, and comparing competitors, share prices, and valuations. Among other companies, the service is mostly used by corporate planning, business development, and other divisions to research external environments, announcements of financial results by competitors, M&A activities, and new industries to expand into in the future as well as the prevailing players in such industries.  

SPEEDA customers include Panasonic Corporation, Nippon Telegraph and Telephone East Corporation, NEC Corporation, Asahi Kasei Corporation, MUFG Bank, Ltd., Seiko Epson Corporation, Sony Corporation, and SoftBank Corp.

Uzabase launched SPEEDA in May 2009. At the time, the service mainly targeted institutional investors, private equity funds, and M&A boutique firms, and accordingly competed with financial data vendors such as Bloomberg and Quick. SPEEDA was offered at a monthly subscription fee of JPY70,000, making it more affordable than rival offerings. The service initially only incorporated data of Japanese listed companies, but Uzabase added data of overseas listed companies in 2010. It similarly introduced global industry reports to expand beyond the original focus on Japanese industry reports. As a result of these data and feature upgrades, the service gained traction among major banks and securities companies. However, from around 2015, the company shifted its primary customer target to non-financial companies. According to the company, the service essentially ceased to compete with financial data vendors such as Bloomberg and Quick from that time onward.

Sales approach

Uzabase predominantly sells its SPEEDA service directly, with its outbound sales activities being the primary driver of such sales. As of February 2022, the majority of the financial institutions in Japan subscribed to SPEEDA, and the company makes efforts to upsell additional user IDs to such existing customers. To secure non-financial companies as customers, it identifies prospective customers via webinars and advertising, directs its internal sales team to reach out to such customers via telephone and confirm demand, and entrusts the closure of contracts to its field sales team. 

Structure

In FY12/20, Uzabase had 257 employees in the SPEEDA segment. Sales and marketing staff (including customer success team), engineers and designers, and analysts and data managers each accounted for roughly one quarter of the workforce, while sales operations and corporate division staff made up the remainder. Between FY12/16 and FY12/20, it doubled the staff in the SPEEDA segment, with each staff category increasing by roughly the same proportion.

Main subsidiaries

The SPEEDA business is operated by Uzabase (parent company), Uzabase China Limited, and Mimir, Inc.

Shanghai Uzabase Information Technology is based in China, where it engages in overseas market development, agency sales, and writing of industry reports for SPEEDA.

Uzabase invested in Mimir in April 2017, and made Mimir a wholly owned subsidiary in April 2020. As noted above, Mimir develops and operates the corporate service SPEEDA Expert Research and the expert database NewsPicks Expert.

SPEEDA business model
SPEEDA: Earnings and indicators
FY12/14FY12/15FY12/16FY12/17FY12/18FY12/19FY12/20FY12/21
(JPYmn)
No. of IDs9381,1831,5722,0492,5713,129--
YoY34.6%26.1%32.9%30.3%25.5%21.7%--
Number of customer companies1,5051,6621,901
YoY------10.4%14.4%
ARPA (JPY'000)279299345
YoY------7.2%15.4%
Churn rate0.8%1.3%1.0%
Revenue1,1011,5552,1432,9053,6154,5435,5096,845
YoY-41.3%37.8%35.5%24.5%25.7%21.3%24.3%
EXPERT RESEARCH------128479
Operating profit-181-82314155651,7852,282-
YoY---79.8%36.1%-27.8%-
Operating profit margin-16.4%-0.5%10.8%14.3%15.6%39.3%41.4%-
Direct EBITDA-----1,8072,343-
YoY------29.7%-
% of revenue-----39.8%42.5%-
EBITDA-----1,5972,0002,163
YoY------25.2%8.1%
% of revenue35.2%36.3%31.6%
Depreciation24333132722134-
Number of employees126154199214257-
Revenue per employee21202223-
Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
Direct EBITDA: Segment profit/loss to which depreciation and goodwill amortization are added
EBITDA: Direct EBITDA to which companywide expenses are allocated
SPEEDA: Revenue

SPEEDA contracts are structured around contract IDs. The service mainly generates revenue from monthly subscription fees that are received from contracted users, and these fees are determined by the number of contract IDs issued. Other sources of revenue are monthly fees for optional features supplied under optional service contracts, and fees for purchases of credit reports and industry reports provided by third parties.

Revenue in this business is calculated as the number of contract IDs x monthly subscription fees + optional fees. It can also be derived by multiplying the number of customer companies by the average revenue per account (ARPA).

The monthly subscription fee per contract ID is roughly JPY200,000, and is discounted for users with multiple contract IDs. Uzabase had disclosed the number of contract IDs through FY12/19, but it altered its disclosure policy from FY12/20, and has since released data on the number of customer companies and ARPA. In FY12/21, the number of customer companies was 1,901 (+14.4% YoY), the churn rate (12-month average) 1.0% (versus 1.3% in FY12/20), the ARPA JPY345,000 per month (+15.4% YoY), and the number of contract IDs per customer 2–3.

The company says that it launched the service in May 2009 with a monthly subscription fee of JPY70,000, and subsequently revised the price in tandem with functional upgrades. As of February 2022, the monthly subscription fee was about JPY200,000. In FY12/21, ARPA grew YoY thanks to a rise in optional fees from increased use of SPEEDA Expert Research and other services.

SPEEDA: Cost of revenue

Cost of revenue in the SPEEDA business mainly comprises labor costs, outsourcing expenses, and data usage fees. The segment GPM is roughly 70%.

Labor costs correspond to salaries and bonuses for engineers, designers, analysts, and other staff. The company employs around 60 analysts, and operates bases in Japan, Shanghai, and Sri Lanka. 

Outsourcing expenses are payments for outsourced tasks such as writing industry reports and developing systems.

Data usage fees are paid to data vendors. Uzabase purchases financial, statistical, and other data from data providers such as Nomura Research Institute, Jiji Press, Morningstar, Tokyo Shoko Research, and Euromonitor International. It has entered into contracts with some 70 data providers, and the data fees it pays to such companies are in principle set to a fixed rate.

Breakdown of costs (parent company) 
FY12/14FY12/15FY12/16FY12/17FY12/18FY12/19FY12/20
(JPYmn)ParentParentParentParentParentParentParent
Cost of revenue8219319471,3601,5191,5181,739
% of revenue73.1%58.8%44.2%48.1%42.0%33.5%32.7%
Labor costs335372407555566711822
% of revenue29.8%23.5%19.0%19.6%15.6%15.7%15.5%
% of cost of revenue40.8%39.9%43.0%40.8%37.3%46.8%47.3%
Various costs4865595408069538101,018
% of revenue43.3%35.3%25.2%28.5%26.4%17.9%19.1%
% of cost of revenue59.2%60.1%57.0%59.2%62.7%53.4%58.5%
Outsourcing expenses204268170278322387457
Data usage fee257284367526630421536
Transfer to other accounts------3-101
Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods. 

We provide the breakdown of costs at the parent company in the table above as a reference to understand the cost of revenue structure in the SPEEDA business. Through FY12/19, the parent company mainly operated SPEEDA, and earnings in this business therefore largely corresponded to earnings at the parent company. In May 2020, Uzabase consolidated Mimir, Inc. to jointly handle the SPEEDA business. Consequently, the earnings of the SPEEDA business and the earnings of the parent company diverged from that point onward. In FY12/21, the parent company absorbed the subsidiaries FORCAS, Inc. and INITIAL, Inc., and the gap in earnings between the SPEEDA business and the parent company has expanded further as a result. 

SPEEDA: SG&A expenses

SG&A expenses in the segment mainly consist of personnel expenses, advertising expenses, and rents.

Personnel expenses recorded under SG&A expenses mainly include salaries and bonuses for staff working in sales-related, sales and marketing, and corporate functions (companywide expenses).

Advertising expenses are mainly costs for online search ads aimed at driving up new customer acquisitions. 

SG&A expenses (parent)
FY12/14FY12/15FY12/16FY12/17FY12/18FY12/19FY12/20
(JPYmn)ParentParentParentParentParentParentParent
SG&A expenses6407141,0361,1651,6322,3002,481
% of revenue57.0%45.1%48.3%41.2%45.1%50.8%46.7%
Advertising expenses114185130234246
% of revenue10.1%11.7%3.6%5.2%4.6%
% of SG&A expenses17.8%25.9%8.0%10.2%9.9%
Outsourcing expenses41105121248
% of revenue2.6%4.9%2.7%4.7%
% of SG&A expenses5.7%10.2%5.3%10.0%
Salaries and allowances114185211247334478718
% of revenue10.1%11.7%9.8%8.7%9.2%10.6%13.5%
% of SG&A expenses17.8%25.9%20.3%21.2%20.5%20.8%28.9%
Rents114231237235
% of revenue4.0%6.4%5.2%4.4%
% of SG&A expenses9.8%14.2%10.3%9.5%
Depreciation17266990101
% of revenue1.6%1.7%1.9%2.0%1.9%
% of SG&A expenses2.7%3.7%4.2%3.9%4.1%
Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods. 
SPEEDA: Contribution margin and EBITDA margin 

According to the company, fixed costs account for a large share of the expenses (including cost of revenue) recorded in the SPEEDA segment, and the contribution margin stands at roughly 70%. The company says it can control the EBITDA margin of the segment by adjusting its personnel recruiting policy and various expenditures. The segment has a high contribution margin, and the EBITDA margin can rise to 40–45% when the company holds down costs. However, its policy is to invest in future growth while keeping the EBITDA margin in the 30–35% range. In FY12/21, the EBITDA margin was 31.6%.

FORCAS (FY12/21: 9.2% of total revenue, EBITDA of -JPY180mn)

The FORCAS business includes the marketing platform FORCAS as well as FORCAS Sales, which is a research platform for sales people.

FORCAS

In May 2017, Uzabase launched FORCAS as a marketing platform designed to support the execution of account-based marketing (ABM) for B2B service providers. It offers the service at a fixed monthly rate to corporate customers.

FORCAS integrates customer data accumulated by service users with information on company attributes (industries, qualitative and quantitative attributes of companies such as workforce size), and automatically analyzes the characteristics of the existing customers of service users with the help of machine learning. Based on such analysis, the service identifies leads with a high potential closing rate, and also supports the formulation of marketing strategies informed by data analytics. The data on company attributes is sourced from the company’s SPEEDA platform.

Characteristics of FORCAS 
Prediction of leads with a high potential closing rate 

By importing their own data on existing customers into FORCAS, users can automatically analyze the industries, various scenarios*, regions, revenue, and workforces of their existing customers, and identify leads with a high potential closing rate. The service can also automatically generate a list of potential target customers from its own database of over 1.5mn companies, which have been assigned a score using the service’s own unique assessment model. This list can be downloaded in Microsoft Excel format.  

*Scenarios refer to changes in or policies regarding the companies’ finances, businesses, or recruiting, including sales growth, overseas expansion, personnel increases, new business development, and sales representative recruitment.

Many parameters to identify target customers 

The aforementioned list of potential target companies can be generated based on a diverse range of parameters such as the industry they operate in, their activities, the challenges they face, and external services they have adopted. Uzabase aggregates information on external services used by various companies through the tags (bits of website code) used in their official websites, and has collected data on over 1,100 types of such services, including marketing automation, e-commerce tools, and online advertising. FORCAS users can employ this data to formulate various hypotheses, and identify potential target companies.         

Integration of massive amounts of customer data 

FORCAS uses its own company data and name recognition engine to consolidate customer information of service users that is scattered across their customer management system, lists of potential sales targets, invoice data, and business cards. This helps consolidate customer data and reduces the burden of sorting customer data by name.

In addition, when FORCAS is used beyond the initial data aggregation phase, the service updates assigned scores based on sales results, utilizing its machine learning aspect.

FORCAS Sales

FORCAS Sales was launched in July 2020 as a service for sales representatives. It functions as a sales research platform that allows users to gather information and formulate hypotheses more efficiently in their sales activities, helping to improve the quality of proposal-based sales activities and sales productivity. It is also useful to visualize sales-related tasks that tend to depend on specific individuals, to analyze and share the practices of top sales representatives, and to standardize these within a company’s sales force. FORCAS Sales is a separate service—not an optional service of FORCAS. It is offered to corporate customers for a fixed monthly fee. 

As noted above, FORCAS allows users to identify leads with a high potential closing rate, and accordingly supports efficient sales and marketing activities. In contrast, FORCAS Sales helps users research target companies they try to make sales to, deepen their understanding of such companies and the industries in which they operate, identify the challenges faced by these companies and build related hypotheses.

Characteristics of FORCAS Sales
Facilitates collection of data on sales targets and industry information

FORCAS Sales consolidates information such as company profiles, business segments, competitors, news articles, financial results, director information, organizational structures, and industry knowledge into a standardized format that is easy to browse. It gives users instant access to all essential data for sales activities sourced from various company websites, shortening the research time before approaching a potential customer by telephone or email, and resulting in greater efficiency.   

One-stop access to industry and competitor data necessary to create proposal materials 

FORCAS Sales employs its own industry classification of 560 industries, and users can obtain reports that describe these industries, their market environments, and competitive conditions. These reports help to build an understanding of the structure of a newly targeted industry, as well as of the challenges a user may face if it decides to expand into that industry.  

Access to the latest information on customer companies

Users can search for and browse articles about their customer companies sourced from NewsPicks.   

Visualize research practices of top sales representatives. Supporting development of standardized sales processes 

FORCAS Sales standardizes the method of collecting information on customer companies and industries, without depending on sales representatives’ individual research skills, and thus eliminating gaps in information among sales representatives. Further, the service also keeps a log of research actions performed, allowing the practices of top sales representatives to be analyzed and shared. It supports the development of a standardized model for research in the sales forces that contributes to sales results by allowing users to analyze, share, and standardize the practices of top sales representatives as reflected in the log data, and thus improve the information gathering and hypothesis formulation capabilities.

Earnings in the FORCAS business 

Earnings in the FORCAS business
FY12/19FY12/20FY12/21
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
FORCAS ARR (JPYmn) 4646047219079661,0041,0921,2091,2841,4311,5601,712
YoY----108.2%66.2%51.5%33.3%32.9%42.5%42.9%41.6%
QoQ-30.2%19.4%25.8%6.5%3.9%8.8%10.7%6.2%11.4%9.0%9.7%
FORCAS revenue (JPYmn) 109140167203236245263296322361385418
YoY----116.5%75.0%57.5%45.8%36.4%47.3%46.4%41.2%
QoQ-28.4%19.3%21.6%16.3%3.8%7.3%12.5%8.8%12.1%6.6%8.6%
FORCASのEBITDA(JPYmn ) -27-27-27-88-15-20-26-41-6-46-54-72
YoY------------
QoQ------------
EBITDA margin------------
Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
Annual recurring revenue (ARR) refers to the revenue earned from subscriptions in the following year.
EBITDA: The amount obtained from adding depreciation and goodwill amortization to segment profit/loss (after allocating companywide expenses)

The only financial metric Uzabase has disclosed for the FORCAS business is annual recurring revenue (ARR; revenue that can be earned from subscriptions in the following year). The company has not disclosed data on the number of customers and average revenue per account (ARPA). However, Shared Research understands that as of October 2021, the number of contract IDs for FORCAS stood at around 60.  

The revenue for FORCAS is calculated by multiplying the number of contract IDs by usage fees per ID. FORCAS, SPEEDA, and INITIAL all share the functions of development, design, marketing, and data, and therefore costs are allocated to each service in proportion to their usage.

INITIAL (FY12/21: 3.4% of total revenue, EBITDA of JPY125mn)

INITIAL is an online data service that allows users to search for information regarding Japanese startups, their fundraising situations, related news, and comparable companies. Like SPEEDA, Uzabase provides the service to financial institutions, consulting firms, accounting firms, and other general businesses for a fixed monthly fee. 

The service aggregates data from a broad range of publicly available sources such as various types of news, official websites and press releases of startups and venture capital firms, company registers, and official gazettes. 

In November 2019, Uzabase integrated a startup database, entrepedia operated by the former Japan Venture Research Inc., which became a subsidiary of the company in January 2017, and the ami social media platform that allowed entrepreneurs to assemble like-minded people. It subsequently rebranded the service INITIAL and renamed Japan Venture Research Inc. to INITIAL Inc. In April 2021, the Uzabase absorbed INITIAL Inc.

Characteristics of INITIAL 
Comprehensive startup-related data 

INITIAL contains data on over 17,200 Japanese startups, their businesses, fundraising situations, and partners, as well as related news. It also provides data on over 15,200 investors to these startups, over 98,000 investment rounds, and over 2,630 funds.   

Unique search categories 

The service facilitates search and analysis of startups using various categories such as industry, technology, and series (funding rounds).

Based on its fundraising data, the service classifies startups by their growth phase using the unique “INITIAL Series” category. It also uses its own scoring system that can be used to automatically generate lists of similar startups and compare them. 

Provision of original content

The service also provides original content in the form of analysis articles and reports on fundraising and IPOs based on coverage and data of the company, as well as interview articles with entrepreneurs and investors. In this way, it goes beyond the provision of analytical data, and also provides realistic information on startups. 

Earnings in the INITIAL business 

Earnings in the INITIAL business
FY12/19FY12/20FY12/21
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
INITIAL ARR (JPYmn) 204226258291325349369418448500554615
YoY----59.3%54.4%43.0%43.6%37.8%43.3%50.1%47.1%
QoQ-10.8%14.2%12.8%11.7%7.4%5.7%13.3%7.2%11.6%10.8%11.0%
INITIAL revenue (JPYmn) 57607074969295109121131141157
YoY----68.4%53.3%35.7%47.3%26.0%42.4%48.4%44.0%
QoQ-5.3%16.7%5.7%29.7%-4.2%3.3%14.7%11.0%8.3%7.6%11.3%
INITIAL EBITDA (JPYm ) 03452126162719364127
YoY-----766.7%300.0%440.0%-9.5%38.5%156.3%0.0%
QoQ-650.0%33.3%25.0%320.0%23.8%-38.5%68.8%-29.6%89.5%13.9%-34.1%
EBITDA margin0.7%5.0%5.7%6.8%21.9%28.3%16.8%24.8%15.7%27.5%29.1%17.2%
Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
Annual recurring revenue (ARR) refers to the revenue earned from subscriptions in the following year.
EBITDA: The amount obtained from adding depreciation and goodwill amortization to segment profit/loss (after allocating companywide expenses)

The only financial metric Uzabase has disclosed for the INITIAL business is annual recurring revenue (ARR; the revenue that can be earned from subscriptions in the following year). The company has not disclosed data on the number of customers and average revenue per account (ARPA) of this business. However, Shared Research understands that as of October 2021, the number of contract IDs for INITIAL stood at around 20.  

The revenue in the INITIAL business is calculated by multiplying the number of contract IDs by usage fees per ID. INITIAL, SPEEDA, and FORCAS all share the functions of development, design, marketing, and data, and therefore costs are allocated to each business in proportion to their usage.

AD/NP (FY12/21: 7.2% of total revenue, EBITDA of -JPY271mn)

The AlphaDrive/NewsPicks (AD/NP) business divides into the NewsPicks Enterprise service and the Incubation Suite service.

NewsPicks Enterprise

NewsPicks Enterprise is a customized version of NewsPicks for corporate customers that functions as a tool for human resources development and organizational revitalization. In addition to the services provided to individual paid subscribers, the NewsPicks Enterprise service adds features specific to customer companies such as news curation by employees of such companies, posting of internal articles, and streaming of videos of internal events. Noteworthy news articles can be picked and shared by employees, and internal management policies and other topics can be distributed in a form that resembles an internal newsletter. Employees can learn from each other’s contributions, and collectively build a common language and knowledge base. This in turn helps foster an organizational culture that is conducive to bottom-up reform.

NewsPicks Enterprise customers include Tokio Marine & Nichido Fire Insurance Co., Ltd., Japan Tobacco Inc., Mitsubishi Heavy Industries, Ltd., Dentsu Inc., and Itoki Corporation.

Incubation Suite

Incubation Suite is a comprehensive support tool for new business development. With all the necessary support consolidated in a single platform, it features a range of functions from one that helps administrative staff manage programs for business incubation, to content that accelerates the learning of staff who make new proposals. More specifically, the company handles in-house contests aimed at new business development (from contest design to implementation), mentors the teams proposing business ideas, holds award ceremonies for these contests, and even helps customers decide on whether to pursue the winning idea as a real business. In exchange, the company receives consulting fees of tens of millions of yen per project.     

NewsPicks segment (FY12/21: 37.9% of total revenue, 29.6% of operating profit before adjustments) 

NewsPicks is a news media service that curates financial, economic, and business news content distributed by various domestic and overseas news media. It is available as a smartphone app and PC website. 

The platform provides one-stop access to news content distributed by over 100 Japanese and overseas media. News articles on NewsPicks are accompanied by comments from “professional pickers” (i.e., public figures or experts), which are intended to help readers cultivate a deeper understanding of the subject material. NewsPicks also has its own editorial department, which covers, edits, and publishes original content (available only to paid subscribers). In addition, the comment section of the platform serves as a place where users can interact with each other or companies, and accordingly helps build a sense of community. 

There are two types of curation websites. The first are websites that use artificial intelligence (AI) to programmatically aggregate information. The second are websites that provide extracts from external websites and information posted or organized manually by website operators or users. NewsPicks falls in the first category.

The home page of NewsPicks was same for all users through 2020. From 2021, the site started using machine learning to recommend articles based on users’ browsing history, resulting in a personalized home page for each user.

Uzabase launched NewsPicks in July 2013. Prior to that, it had mainly concentrated on the SPEEDA platform, which was geared toward corporate users. The company created NewsPicks with a broader scope, aiming to deliver a service that could be useful in the day-to-day information gathering by business professionals in general. It thought business persons read financial, economic, and business news content: (1) to discover content on topics of interest, and (2) to deepen their understanding of the subject matter. NewsPicks fulfills both purposes as it allows users to select news by themselves (not by editorial staff), and provides comments from experts and responses from other users that can be read alongside the news articles.

NewsPicks’ features 

NewsPicks offers the following key features.

Pick and Comment features

Users can “pick” news articles on NewsPicks. This essentially saves the articles as personalized bookmarks that can be rapidly retrieved at any time. Users can also add comments to picked articles, and such posts are published on the platform.

By reading the comments of “professional pickers” (i.e., public figures or experts) alongside news articles, NewsPicks users can gain a diverse perspective on the content and get new ideas. As of February 2022, NewsPicks had over 200 professional pickers from a broad range of fields, including company executives, university professors, novelists and authors, and researchers.

Source: NewsPicks
Follow feature 

NewsPicks allows users to follow each other, and it provides a timeline page that shows news picks of followed users. With this feature, users can populate their timeline with news articles picked by followed experts, public figures, friends, or acquaintances, and ensure that news articles of interest are sent to them.   

NewsPicks Academia is a service that supports the organization of events where users can interact with each other in a physical location, such as lectures by public figures from various industries or events that bring together pickers. 

Article Post feature 

Users are also able to post news articles they select to NewsPicks. They can share such articles with other users on the platform by simply entering the URL of an online news article in their posts. 

Search feature 

Users can search news articles, user comments, and user names on NewsPicks. This facilitates the retrieval of old news articles, keyword searches on comments, and searches for posts by other users. The website version of the service is integrated with the SPEEDA platform, which means users can search for financial, statistical, and other business data that is stored in SPEEDA directly from the NewsPicks website.

NewsPicks: Customers, subscriber acquisition, structure, and major subsidiaries 

Customers

As of September 2021, NewsPicks had total 6.6mn subscribers, of which 177,000 were paid subscribers (+5.4% YoY). Subscribers in their 20s and 30s each accounted for some 30% of the total, executives made up about 50%, and people with over JPY6mn in annual income over 50%. In other words, the website attracts many young readers, and a high ratio of its user base appears to have the potential to move into leadership positions in the future.

Subscriber acquisition

NewsPicks tries to attract new subscribers through online search ads and social media ads. The latter make use of algorithms that send ads to friends and acquaintances of existing NewsPicks users, and the company explains that this creates a bias in the type of users it attracts. Uzabase thinks mass media advertising is an effective way to reach a wider range of potential subscribers.

Structure

In FY12/20, the company had 202 employees in the NewsPicks segment. Original content creators accounted for one fifth of the total; developers, ad creators, and video creators each made up one quarter; and corporate planning and advertising operation staff constituted the remainder.

Between FY12/16 and FY12/20, the staff in the NewsPicks segment increased to roughly 5x, reflecting headcount increases in tandem with business growth, and an increase in video content creators accompanying the establishment of NewsPicks Studios Inc. in June 2018. 

Major subsidiaries

The NewsPicks segment is operated by the NewsPicks, Inc. and NewsPicks Studios, Inc.

NewsPicks Inc. develops and operates the NewsPicks platform.

NewsPicks Studios, Inc. engages in video content creation and sales.

NewsPicks business model

NewsPicks segment: Earnings and indicators
FY12/14FY12/15FY12/16FY12/17FY12/18FY12/19FY12/20FY12/21
(JPYmn)
No. of subscribers ('000)2531,0502,0042,9093,8014,682--
YoY--90.8%45.1%30.7%23.2%--
No. of paid subscribers ('000)211325695147--
YoY--187.4%75.5%69.7%54.5%--
% of paid subscribers0.7%1.1%1.6%1.9%2.5%3.1%--
Theoretical revenue from paid subscription1153887931,3632,182--
Revenue223609391,6612,9624,0245,2886,106
YoY--160.8%77.0%78.3%35.9%31.4%15.5%
Advertising----1,4151,7642,4772,914
YoY-----24.7%40.4%17.6%
% of total----47.8%43.8%46.8%47.7%
Paid subscription----1,2621,7052,2012,339
YoY--