Heroz, Inc. · TSE:4382
Heroz — Q3 FY04/2025 Earnings Presentation
32 slides from Heroz's earnings presentation, Mar 13, 2025
Slide 1: Presentation Material for FY04/2025 Q3 Financial Results
Presentation Material for FY04/2025 Q3 Financial Results March 13,2025 HEROZ, Inc. ｜4382｜ Notice This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese do
Slide 2: Contents
Contents 1. Financial Highlights 2. FY04/2025 3rd Quarter Performance (Consolidated) 3. Initiatives in each business segment 4 . Frequently Asked Questions and Answers © HEROZ, Inc. 2
Slide 3: Financial Highlights
01 Financial Highlights © HEROZ, Inc. 3
Slide 4: Financial highlights
Financial highlights ◼ The financial results for FY04/2025 Q3 were as follows: sales amounted to 4,346 million yen (+19.7% YoY), EBITDA was 492 million yen (△32.6% YoY), and operating profit was 158 million yen (△60.7% YoY). ◼ In the first half, expenses increased due to investments in new SaaS prod
Slide 5: FY04/2025 3rd Quarter Performance (Consolidated)
02 FY04/2025 3rd Quarter Performance (Consolidated) © HEROZ, Inc. 5
Slide 6: Our Key Performance Indicator EBITDA
Our Key Performance Indicator Performance Indicators for ◼ EBITDA, a key performance indicator for generating cash, as an important metric, and aim to continuously enhance Business Profitability corporate value and shareholder value through the growth of EBITDA. The calculation:Operating Profit + 17
Slide 7: Performance Summary (May 2024-January 2025)
Performance Summary (May 2024-January 2025) HEROZ Group Consolidated Revenue EBITDA * Operating profit 4,346million yen 492million yen 158million yen [YoY＋19.7%] [YoY△32.6%] [YoY△60.7%] AI SaaS KPI AI Security ARR Recurring Revenue Ratio** Recurring Churn Rate*** 4,105million yen 65.4% 0.6% [YoY＋23.
Slide 8: FY04/2025 Q3 Performance Summary
FY04/2025 Q3 Performance Summary ◼ Revenue rose 19.7%, boosted by HEROZ's business growth and contributions from Tifana and VOIQ. ◼ BtoB sales in Q4 are expected to benefit from increased projects and major AI Sakura orders, with full-year forecasts unchanged. FY04/2024 FY04/2025 Full-year Forecast
Slide 9: Cumulative Q3 operating profit on actual basis
Cumulative operating profit for Q3 reached 387 million yen based on actual performance ■ Cumulative Q3 operating profit was 158 million yen, with actual performance-based operating profit landing at 387 million yen. ■ "HEROZ ASK" and "JOINT" exceeded the budget pace for investments in the first half
Slide 10: Trends in KPIs (Quarterly)
Trends in KPIs (Quarterly) Revenue Trends EBITDA Trends (Unit: Million Yen) (Unit: Million Yen) 1,800 300 279 281 Delays in recognizing revenue from the 258 BtoB business and upfront investments 1,519 256 for launching SaaS products occurred 1,500 250 during 1Q–2Q, but a recovery trend is 1,403 1,42
Slide 11: Group total ARR 4,105 million yen
Our total ARR reached approximately 4.1 billion yen, achieving +23.2% YoY. ARR Trends (Unit: Million Yen) Significant growth of ARR YoY 4,500 +23.3% YoY+ 23.3 % 4,105 4,000 Group total ARR 4,105 millon yen 3,756 3,656 3,500 3,328 3,357 ◼ Recurring revenue includes BtoC and BtoB 2,898 2,958 3,000 2,8
Slide 12: AI/DX Recurring Revenue and AI Security Recurring Revenue
Recurring Revenue: Significantly increased due to new SaaS and M&A effects, aiming for further expansion in the future. Recurring Revenue Trends（Quarterly） AI/DX Recurring Revenue (Unit: Million Yen) 1000 ◼ Breakdown of recurring revenue is as follows: ・ Shogi Wars-related Subscriptions ・ BtoB Conti
Slide 13: SG&A Expenses Trends (Consolidated)
SG&A Expenses Trends (Consolidated) ■ Continue to focus on cost control for SG&A expenses . ■ While controlling corporate department costs, active investments in personnel and advertising expenses for SaaS-related areas like HEROZ ASK and JOINT led to an increase in these costs. As a result, the tot
Slide 14: Cost of Sales Trends (Consolidated)
Cost of Sales Trends (Consolidated) ■ To drive revenue growth, active hiring of engineers and business roles in the BtoB sector continues, leading to steady workforce expansion. Cumulative Q3 cost of sales rose 22.2% YoY. ■ Outsourcing costs continue to show a decreasing trend compared to last year.
Slide 15: Performance by Segment: FY04/2025 Q3
Performance by Segment ：FY04/2025 Q3 ■ In the AI/DX business, revenue grew by 40.5% driven by the increase in HEROZ BtoB projects, along with the expanded sales of the AI Sakura series and VOIQ. ■ Similarly, the AI Security business maintained strong profitability with an EBITDA margin of 38.7%. FY0
Slide 16: AI/DX Segment
AI/DX Segment ◼ This segment is responsible for BtoC focused on Shogi Wars, BtoB providing AI solutions to customers, JOINT-related business of StrategIT, services in the contact center domain by A.I. Squared, Inc., and AI business of Tifana.com. ◼ In Q3, revenue growth was driven by M&A effects and
Slide 17: AI/DX Segment: BtoB business steady growth
AI/DX Segment: HEROZ's BtoB business steadily initiated projects, achieving over 50% YoY growth. BtoB Number of BtoB Average Number of HEROZ BtoB Revenue Trends Active Projects Quarterly Personnel Quarterly ・In 3Q, gradual project starts and large-scale project ・The number of active projects per qua
Slide 18: AI/DX Segment: BtoC Business and New Releases
AI/DX Segment Performance of the BtoC Business and New Releases ◼ The BtoC boasts overwhelming network externalities in offerings like Shogi Wars, achieving continued growth in the third quarter. ◼ By late February 2025, the new "Sprint" mode will launch to celebrate 1 billion matches, boosting user
Slide 19: AI Security Segment: Performance Summary
AI Security Segment : Performance Summary ◼ This segment involves implementing HEROZ Group's AI into the security business operated by Vario Secure. ◼ The recurring revenue ratio is very high at 87.5%, enabling the development of a business capable of generating stable revenue. FY04/2025 The recurri
Slide 20: AI Security Segment: Churn Rate & End User Number Trend
AI Security Segment : Churn Rate & End User Number Trend ◼ Managed security maintains a stable revenue base while sustaining a low churn rate. Managed Security Service Managed Security Service Churn Rate Trend End User Number Trend (end of each quarter) The churn rate for 3Q of the February 2025 fis
Slide 21: Balance Sheet (End of January 2025)
Balance Sheet (End of January 2025) ◼ The cash and deposits we currently hold are planned to be gradually allocated to investments to realize our medium- to long-term growth strategy. ◼ Due to M&A activities, there is a goodwill balance of 1.9 billion yen in intangible fixed assets, which will be am
Slide 22: Initiatives in each business segment
03 Initiatives in each business segment © HEROZ, Inc. 22
Slide 23: Progress and Use Cases of HEROZ ASK
Progress and Use Cases of HEROZ ASK Newly released "Minutes AI," with revenue and contracted customers steadily growing. ◼ For "HEROZ ASK," officially launched in May, a new "Minutes AI" feature was released in January 2025. ◼ Revenue and customer numbers are steadily increasing, and moving forward,
Slide 24: JOINT iPaaS for SaaS revenue and executions growing
In "JOINT iPaaS for SaaS," both revenue and integration execution counts are growing. ◼ "JOINT," launched in May, is steadily growing, with more growth expected by year-end. ◼ Connector integrations are rising, aiming for growth and feature expansion as an Embedded iPaaS for SaaS. Further revenue gr
Slide 25: 三國志 HEROES now available on Apple Arcade
The turn-based battle board game ‘三國志 HEROES’ is now available on Apple Arcade! ◼ The turn-based battle board game ‘三國志 HEROES’ , jointly developed with Koei Tecmo Games, has launched exclusively on Apple Arcade. ◼ The 2020-developed ‘三国志ヒーローズ’ has been upgraded with gameplay improvements, enhancing
Slide 26: AI Suitcase voice interaction function selection
Selected for the open proposal process related to "Development of AI Suitcase Voice Interaction Function at the National Museum of Emerging Science and Innovation." ◼ Using LLM, a flexible and intuitive voice interaction system is being developed to enhance navigation experiences for visually impair
Slide 27: AI crane game at Japan College of Engineering exhibition
A crane game evolved with AI appeared at the "Japan College of Engineering Graduation Exhibition 2025"! ◼ Provided technical support for the "AI Hospitality Crane Game ‘Kanebako CREA'" exhibited at the "Japan College of Engineering Graduation Exhibition 2025," assisting in the realization of a new c
Slide 28: AI Sakura-san: Recurring revenue and contracted users increasing
AI Sakura-san: Recurring revenue and cumulative contracted users are steadily increasing. ◼ AI Sakura-san is expanding into new areas, such as inbound tourism support and model house tours, with an increasing number of success stories. ◼ AI Sakura-san's recurring revenue is steadily increasing, with
Slide 29: Released 'Vario Ultimate ZERO' Zero Trust solution
Released 'Vario Ultimate ZERO,' a Zero Trust solution for small and medium-sized enterprises ◼ Providing security services tailored to the scale of small and medium-sized enterprises, from cloud environments to office settings ◼ We released 'Vario Ultimate ZERO' at the end of July to ensure security
Slide 30: Topics for Q3 FY Feb 2025 (Marketing)
Topics for Q3 of the Fiscal Year Ending February 2025 (Marketing) ◼ Strengthening outreach to industries like "manufacturing," "construction," and "healthcare," where digital transformation (DX) increases the need for cybersecurity measures. Enhancing participation in industry-specific exhibitions O
Slide 31: Frequently Asked Questions and Answers
04 Frequently Asked Questions and Answers © HEROZ, Inc. 31
Slide 32: Frequently Asked Questions (FAQ)
Frequently Asked Questions (FAQ) ◼ In response to our recent financial results announcement, we have compiled and answered some of the frequently asked questions Q：Overview of HEROZ's BtoB business after the end of the second quarter and projections for the current term. A：In HEROZ's BtoB business,