Intelligent Wave Inc. · TSE:4847
Intelligent Wave — Q1 FY06/24 Earnings Presentation
27 slides from Intelligent Wave's earnings presentation, Nov 6, 2023
Slide 1: Financial Results for Q1 FY06/24
Financial Results for Q1 FY06/24 (July 1 to September 30, 2023) [Non-Consolidated] Intelligent Wave Inc. Announced on November 6, 2023 Copyright © 2023, INTELLIGENT WAVE INC. All rights reserved.
Slide 2: Financial Results for Q1 FY06/24
Financial Results for Q1 FY06/24 Forecast for FY06/24 Key initiatives in FY06/24 Reference Copyright © 2023, INTELLIGENT WAVE INC. All rights reserved. 2
Slide 3: Overview
Overview Both sales and profits declined from the previous fiscal year due to large-scale hardware upgrade in the previous fiscal year. Excluding the impact of this upgrade, however, both sales and profits were up year on year. The amount of orders increased 36.0% year on year, and orders on hand in
Slide 4: Sales by Category
Sales by Category System development and cloud services grew significantly YoY. Third-party products and services fell sharply YoY due to large-scale hardware sales in the previous fiscal year. Security increased YoY due to efficient sales activities focused on core products. Million yen Q1 FY06/23
Slide 5: Sales by Business Domain
Sales by Business Domain Payment systems, etc., grew YoY due to large-scale projects for credit card companies. FEP sales fell sharply YoY due to large-scale hardware upgrade in the previous fiscal year. Cloud services grew YoY. Security increased YoY due to efficient sales activities focused on cor
Slide 6: Top Three Clients by Sales
Top Three Clients by Sales System integrator increased YoY due to large-scale project for credit card company. Credit card company increased YoY due to an expanded scale of system development in multiple areas. As for DNP, security- related sales are expected to increase from Q2 onward. Million yen
Slide 7: Sales by Type (Recurring and Spot)
Sales by Type (Recurring and Spot) Recurring revenue is increasing steadily due to higher sales of cloud services and maintenance. ■…Spot ■…Recurring 4,000 Million yen 120.0% 3,500 100.0% 3,000 1,681 80.0% 2,500 2,216 2,175 1,350 1,517 1,442 2,000 1,634 60.0% 1,382 1,055 1,500 40.0% 1,000 1,796 1,80
Slide 8: Operating income
Operating income Gross profit decreased YoY due to high-margin large-scale hardware upgrade in the previous fiscal year, but gross profit on system development and cloud services increased YoY due to higher sales and improved profit margins. SG&A expenses increased from the second half of the previo
Slide 9: Cloud Service Business
Cloud Service Business Net sales increased YoY due to an increase in the number of users (nine companies in total), mainly due to IFINDS, a fraud detection service. Profit is improving due to changes in the service composition ratio and stabilization of the operation system. Million yen FY06/23 FY06
Slide 10: Amount of orders
Amount of orders ■…Payment & Finance (System Development) ■…Payment & Finance (Maintenance, Hardware, etc.) Million yen ■…Cloud Services ■…Security 5,421 286 4,500 4,257 4,686 4,000 228 4,252 4,257 807 3,500 299 3,954 3,130 273 339 2,794 807 610 1,876 3,329 3,000 2,829 322 311 3,130 132 2,904 86 2,8
Slide 11: Orders on Hand
Orders on Hand ■…Payment & Finance (System Development) ■…Payment & Finance (Maintenance, Hardware, etc.) Million yen ■…Cloud Services ■…Security 12,073 11,548 10,974 1,071 605 582 14,000 9,563 9,268 9,047 9,233 12,073 666 12,000 660 606 1,071 7,963 749 639 6,913 6,717 10,000 9,047 4,141 6,695 749 5
Slide 12: Forecast for FY06/24
Financial Results for Q1 FY06/24 Forecast for FY06/24 Key Initiatives in FY06/24 Reference Copyright © 2023, INTELLIGENT WAVE INC. All rights reserved. 12
Slide 13: FY06/24 Full-year Forecasts
FY06/24 Full-year Forecasts Million yen FY06/23 FY06/24 Change actual forecast (full year) 1H 2H Full year 1H 2H Full year Net sales 6,789 6,585 13,374 7,000 8,000 15,000 ＋12.2% Payment and finance 5,393 5,015 10,408 5,160 5,840 11,000 ＋5.7% Cloud services 881 985 1,867 1,190 1,310 2,500 ＋33.9% Secu
Slide 14: FY06/24 Forecasts
FY06/24 Forecasts Sales progressed steadily against the 1H forecast. In Q2, we expect even higher profit, as systems development and maintenance pushes up the gross profit margin. We anticipate sales of in-house products and hardware in Q2, raising gross profit overall. Million yen FY06/23(actual) F
Slide 15: Key Initiatives in FY06/24
Financial Results Q1 FY06/24 Forecast for FY06/24 Key Initiatives in FY06/24 Reference Copyright © 2023, INTELLIGENT WAVE INC. All rights reserved. 15
Slide 16: Status of Strategies by Business Domain
Status of Strategies by Business Domain • Received orders for large-scale infrastructure construction and operation Payment and • Expanding scale of system development in multiple areas at a major credit card finance company • Started collaboration with Cacco Inc. on measures against card fraud • St
Slide 17: Expansion in the Security Business/Synergy with DNP
Expansion in the Security Business/Synergy with DNP We are promoting sales of our in-house products, the internal information leakage prevention solutions, CWAT and CWAT Cloud. We are also strengthening synergies with DNP. Introduction of CWAT Cloud to DNP In October 2023, DNP introduced CWAT Cloud
Slide 18: Card Fraud Detection Service/Cutting-Edge Initiatives
Card Fraud Detection Service/Cutting-Edge Initiatives We have been rolling out new services following the announcement of our next-generation fraud prevention project, “FARIS.” We aim to establish a cross-industry fraud prevention scheme that encompasses merchants and payment service providers. Coll
Slide 19: Contributing to Innovation Promotion and Regional Revitalization
Contributing to Innovation Promotion and Regional Revitalization We aim to create a safe and prosperous future society through innovation, one of our material issues. We offer state-of-the-art IT and security-related technologies to the public, nurture future-creating human resources, and contribute
Slide 20: Reference
Financial Results Q1 for FY06/24 Forecast for FY06/24 Key initiatives in FY06/24 Reference Copyright © 2023, INTELLIGENT WAVE INC. All rights reserved. 20
Slide 21: Cost of manufacturing
Cost of manufacturing Million yen FY06/23 FY06/24 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Materials cost 21 6 13 9 10 Labor cost 731 737 696 721 745 Expenses 486 517 512 519 569 Subcontracting cost 892 911 929 1,047 1,085 Total manufacturing 2,132 2,173 2,152 2,298 2,411 cost Work in progress 257 317 262 276 216 (b
Slide 22: SG&A expenses
SG&A expenses Million yen FY06/23 FY06/24 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Salaries 384 388 372 417 387 Training and 14 22 18 23 24 recruiting Equipment and 120 118 125 133 127 maintenance, etc. Advertising 9 13 20 17 14 Others 124 124 132 139 140 Total 651 665 667 728 691 Q1 FY06/23 Q1 FY06/24 Change SG&A 6
Slide 23: Cash Flows
Cash Flows ＋973 Million yen (439) (525) Income before taxes ＋259 Purchase of PP&E (278) D&A ＋243 Purchase of (82) A/R decrease ＋717 intangible assets A/P decrease (44) Purchase of (101) Inventory increase (89) investment securities Dividends 4,704 4,694 Income taxes paid (278) (525) JPY 9mil increas
Slide 24: Historical performance
Historical performance ■… Net sales ■ … Operating income 13,374 Million yen 11,493 11,187 10,603 10,920 10,443 8,469 7,137 7,205 6,695 6,558 6,367 6,160 5,891 5,870 5,505 5,527 5,257 5,241 4,844 5,174 4,956 4,762 1,854 1,528 1,482 1,519 1,556 1,177 1,036 1,130 731 702 921 678 484 547 371 389 417 228
Slide 25: Company overview
Company overview As of June 30,2023 Established December 27, 1984 Location Kayabacho Tower, 1-21-2 Shinkawa, Chuo-ku, Tokyo Employees 476 Parent company Dai Nippon Printing Co., Ltd. (50.73%) Capital stock JPY843.75k Shares 26,340,000 Shareholders 9,406 outstanding Ownership (%) % of shareholders In
Slide 26: Reference) Our Cloud Services
Reference) Our Cloud Services ・SaaS product for providing operation system and supporting customers to launch acquiring business ・ Offer 24/7 system operation ・Point management system that grants points at the time of payment, etc. ・Provides 24/7 non-stop switching operation for payment network tran
Slide 27: Intelligent Wave Inc.
These materials were produced to provide information concerning the company and its businesses. They are not intended as a solicitation for investment in securities issued by Intelligent Wave Inc. The opinions, forecasts, and other forward-looking statements in these materials are based on the compa