Quarterly trends and results

Cumulative		FY12/21				FY12/22				FY12/23				FY12/23
(JPYmn)		Q1	Q1-Q2	Q1-Q3	Q1-Q4	Q1	Q1-Q2	Q1-Q3	Q1-Q4	Q1	Q1-Q2	Q1-Q3	Q1-Q4	% of forecast	FY forecast
Revenue		1,822	3,632	5,724	8,031	2,604	5,196	7,990	10,745	3,049				25.2%	12,087
	YoY	29.5%	34.7%	44.2%	49.6%	42.9%	43.0%	39.6%	33.8%	17.1%					12.5%
Gross profit		957	1,895	2,944	4,062	1,218	2,424	3,732	5,076	1,559
	YoY	29.2%	31.1%	39.5%	42.4%	27.3%	27.9%	26.7%	25.0%	28.0%
	Gross profit margin	52.5%	52.2%	51.4%	50.6%	46.8%	46.7%	46.7%	47.2%	51.1%
SG&A expenses		539	1,113	1,815	2,650	912	1,965	3,082	4,174	1,083
	YoY	22.4%	24.0%	28.1%	34.8%	69.1%	76.6%	69.8%	57.5%	18.7%
	SG&A ratio	29.6%	30.6%	31.7%	33.0%	35.0%	37.8%	38.6%	38.8%	35.5%
Operating profit		417	782	1,130	1,411	306	460	650	902	476				39.7%	1,200
	YoY	39.2%	42.6%	62.8%	59.2%	-26.7%	-41.3%	-42.5%	-36.1%	55.7%					33.0%
	Operating profit margin	22.9%	21.5%	19.7%	17.6%	11.7%	8.8%	8.1%	8.4%	15.6%					9.9%
Recurring profit		392	840	1,207	1,574	177	457	812	1,144	611				44.5%	1,372
	YoY	29.2%	48.8%	67.2%	69.8%	-54.7%	-45.5%	-32.7%	-27.3%	244.4%					19.9%
	Recurring profit margin	21.5%	23.1%	21.1%	19.6%	6.8%	8.8%	10.2%	10.7%	20.0%					11.4%
Net income		333	719	1,035	1,302	135	339	622	824	407				38.9%	1,047
	YoY	23.8%	43.5%	59.2%	61.8%	-59.5%	-52.8%	-39.9%	-36.7%	202.1%					27.1%
	Net margin	18.3%	19.8%	18.1%	16.2%	5.2%	6.5%	7.8%	7.7%	13.3%					8.7%
Quarterly		FY12/21				FY12/22				FY12/23
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Revenue		1,822	1,810	2,091	2,307	2,604	2,591	2,795	2,755	3,049
	YoY	29.5%	40.3%	64.5%	65.0%	42.9%	43.2%	33.6%	19.4%	17.1%
Gross profit		957	938	1,049	1,117	1,218	1,206	1,308	1,344	1,559
	YoY	29.2%	33.0%	57.9%	50.7%	27.3%	28.5%	24.6%	20.3%	28.0%
	Gross profit margin	52.5%	51.9%	50.2%	48.4%	46.8%	46.6%	46.8%	48.8%	51.1%
SG&A expenses		539	573	702	836	912	1,053	1,117	1,092	1,083
	YoY	22.4%	25.5%	35.2%	52.2%	69.1%	83.6%	59.2%	30.7%	18.7%
	SG&A ratio	29.6%	31.7%	33.6%	36.2%	35.0%	40.6%	40.0%	39.6%	35.5%
Operating profit		417	365	348	281	306	154	190	252	476
	YoY	39.2%	46.7%	138.9%	46.3%	-26.7%	-57.9%	-45.2%	-10.3%	55.7%
	Operating profit margin	22.9%	20.2%	16.6%	12.2%	11.7%	5.9%	6.8%	9.2%	15.6%
Recurring profit		392	448	367	368	177	280	355	332	611
	YoY	29.2%	71.5%	133.4%	79.1%	-54.7%	-37.5%	-3.3%	-9.6%	244.4%
	Recurring profit margin	21.5%	24.7%	17.5%	15.9%	6.8%	10.8%	12.7%	12.1%	20.0%
Net income		333	386	316	267	135	204	283	202	407
	YoY	23.8%	66.3%	112.0%	72.7%	-59.5%	-47.1%	-10.4%	-24.3%	202.1%
	Net margin	18.3%	21.3%	15.1%	11.6%	5.2%	7.9%	10.1%	7.3%	13.3%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

Revenue by service line

Cumulative			FY12/21				FY12/22				FY12/23
(JPYmn)			Q1	Q1-Q2	Q1-Q3	Q1-Q4	Q1	Q1-Q2	Q1-Q3	Q1-Q4	Q1	Q1-Q2	Q1-Q3	Q1-Q4
Revenue			1,822	3,632	5,724	8,031	2,604	5,196	7,990	10,745	3,049
		YoY	29.5%	34.7%	44.2%	49.6%	42.9%	43.0%	39.6%	33.8%	17.1%
	Creative & Engineering		1,525	3,032	4,827	6,833	2,316	4,512	6,908	9,275	2,611
		YoY	36.1%	41.2%	51.5%	57.9%	51.9%	48.8%	43.1%	35.7%	12.7%
		% of total	83.7%	83.5%	84.3%	85.1%	88.9%	86.8%	86.4%	86.3%	85.6%
	Talent Platform		298	600	897	1,198	288	684	1,083	1,470	437
		YoY	3.7%	9.0%	14.7%	15.3%	-3.1%	14.0%	20.7%	22.7%	51.6%
		% of total	16.3%	16.5%	15.7%	14.9%	11.1%	13.2%	13.6%	13.7%	14.3%
Quarterly			FY12/21				FY12/22				FY12/23
(JPYmn)			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Revenue			1,822	1,810	2,091	2,307	2,604	2,591	2,795	2,755	3,049
		YoY	29.5%	40.3%	64.5%	65.0%	42.9%	43.2%	33.6%	19.4%	17.1%
	Creative & Engineering		1,525	1,508	1,794	2,007	2,316	2,196	2,396	2,368	2,611
		YoY	36.1%	46.8%	72.6%	75.8%	51.9%	45.6%	33.5%	18.0%	12.7%
		% of total	83.7%	83.3%	85.8%	87.0%	88.9%	84.7%	85.7%	86.0%	85.6%
	Talent Platform		298	302	297	301	288	396	399	387	437
		YoY	3.7%	14.8%	28.1%	0.0%	-3.1%	30.8%	34.3%	0.0%	51.6%
		% of total	16.3%	16.7%	14.2%	13.0%	11.1%	15.3%	14.3%	14.0%	14.3%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

Number of recurring revenue customers

	FY12/21				FY12/22				FY12/23
	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Enterprise customers	25	26	26	26	26	26	29	33	37
SMB customers	63	66	66	69	72	79	78	77	77
Total	88	92	92	95	98	105	107	110	114

Source: Shared Research based on company data
*Enterprise: A listed company that is included in the Nikkei 225, the Nikkei 400, or the Nikkei 500, a group member of such a company, or a company with a market cap, revenue scale, and workforce equivalent to a listed company.
SMB: Small and medium-sized business (SMB) customers. Any company not defined by the company as an enterprise.

Monthly ARPU for recurring revenue customers

(JPY'000)		FY12/21				FY12/22				FY12/23
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Enterprise customers		6,760	7,290	8,490	8,670	8,670	7,170	6,940	6,540	6,830
	YoY	15.4%	-2.8%	13.4%	46.2%	28.3%	-1.6%	-18.3%	-24.6%	-21.2%
SMB customers		3,500	3,380	3,640	3,740	4,000	4,170	4,440	4,310	3,890
	YoY	30.6%	21.1%	23.0%	8.1%	14.3%	23.4%	22.0%	15.2%	-2.8%
ARPU		4,391	4,470	5,010	5,110	5,244	4,940	5,110	4,960	4,840
	YoY	27.3%	12.0%	25.3%	25.2%	19.4%	10.5%	2.0%	-2.9%	-7.7%

Source: Shared Research based on company data
*Enterprise: A listed company that is included in the Nikkei 225, the Nikkei 400, or the Nikkei 500, a group member of such a company, or a company with a market cap, revenue scale, and workforce equivalent to a listed company.
SMB: Small and medium-sized business (SMB) customers. Any company not defined by the company as an enterprise.

VND/JPY exchange rate

		FY12/21				FY12/22				FY12/23
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
VND/JPY		0.00460	0.00475	0.00481	0.00499	0.00511	0.00563	0.00590	0.00581	0.00562
	YoY	-1.8%	3.7%	5.1%	10.6%	11.1%	18.4%	22.5%	16.4%	9.9%

Source: Shared Research based on Bloomberg data
Note: Average figures for each quarter

Q1 FY12/23 results (out May 10, 2023)

Summary

Revenue: JPY3.0bn (+17.1% YoY)
Operating profit: JPY476mn (+55.7% YoY)
Recurring profit: JPY611mn (+244.4% YoY)
Net income attributable to owners of the parent: JPY407mn (+202.1% YoY)

Achievement rate

Q1 revenue reached 25.2% of the full-year company forecast (versus 24.2% a year ago against the FY12/22 result), operating profit 39.7% (33.9%), recurring profit 44.5% (15.5%), and net income attributable to owners of the parent 38.9% (16.4%).

Key performance indicators (KPIs), etc.

Number of recurring revenue customers: 114 companies (+16.3% YoY), of which 37 were enterprise customers (+42.3% YoY) and 77 were small and medium-sized business (SMB) customers (+6.9% YoY)

Monthly ARPU: JPY4,840,000 (-7.7% YoY), breaking down into JPY6,830,000 for enterprise customers (-21.2% YoY) and JPY3,890,000 for SMB customers (-2.8% YoY)

Key points

Revenue

Revenue for the Creative & Engineering service line was JPY2.6bn (+12.7% YoY) driven by ongoing and steady orders from existing customers and continued growth in new customers. At end-March 2023, the number of recurring revenue customers was 114 companies (+16.3% YoY). The number of new customers increased as the company systematically made progress with outbound sales. The monthly ARPU was JPY4,840,000 (-7.7% YoY). ARPU for enterprise customers declined 21.2% YoY to JPY6,830,000. ARPU for SMB customers also fell 2.8% YoY to JPY3,890,000 as some startup customers scaled back projects due to a deterioration in their financing and business environment. Revenue at Trys, Inc., which was made a consolidated subsidiary in September 2021, came to JPY390mn. Excluding the subsidiary's contribution, revenue was up 12.8% YoY.

Revenue in the Talent Platform service line was JPY437mn (+51.6% YoY). The increase was attributable to higher revenue from consolidated subsidiary Groove Gear.

Operating profit

Operating profit was JPY476mn (+JPY170mn or 55.7% YoY). Higher revenue and lower outsourcing expenses boosted operating profit by JPY445mn and JPY39mn, respectively. Meanwhile, a cost increase of JPY59mn, a JPY146mn increase in personnel costs under SG&A expenses, JPY83mn foreign exchange impact, and a JPY25mn increase in other expenses put downward pressure on profit. OPM rose 3.9pp YoY to 15.6%. Higher operating profit reflected improved utilization rates in the Creative & Engineering service line.

Sun* 4053