Heroz, Inc. · TSE:4382
Heroz — Q2 FY04/2025 Earnings Presentation
34 slides from Heroz's earnings presentation, Dec 13, 2024
Slide 1: Presentation Material for FY04/2025 Q2 Financial Results
Presentation Material for FY04/2025 Q2 Financial Results December 13,2024 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
Slide 2: Contents
Contents 1. Financial Highlights 2. FY04/2025 2nd Quarter Performance (Consolidated) 3. Initiatives in each business segment 4 . Frequently Asked Questions and Answers © 2024 HEROZ, Inc. 2
Slide 3: Financial Highlights
01 Financial Highlights © 2024 HEROZ, Inc. 3
Slide 4: Financial highlights
Financial highlights ◼ The financial results for FY04/2025 Q2 were as follows: sales amounted to 2,826 million yen (+21% YoY), EBITDA was 291 million yen (△35% YoY), and operating profit was 88 million yen (△65% YoY). ◼ Recurring revenue has been steadily increasing, leading to a rise in total sales
Slide 5: FY04/2025 2nd Quarter Performance (Consolidated)
02 FY04/2025 2nd Quarter Performance (Consolidated) © 2024 HEROZ, Inc. 5
Slide 6: EBITDA: Our Key Performance Indicator
Our Key Performance Indicator ◼ EBITDA, a key performance indicator for generating cash, as an important metric, and aim to continuously enhance corporate value and shareholder value through the growth of EBITDA. ◼ The calculation:Operating Profit + 107 million yen (Depreciation) + 17 million yen (S
Slide 7: Performance Summary (May 2024-October 2024)
Performance Summary (May 2024-October 2024) HEROZ Group Consolidated Revenue EBITDA Operating profit 2,826million yen 291million yen 88million yen YoY＋21.0% YoY△35.2% YoY△64.8% AI SaaS KPI AI Security ARR Recurring Revenue Ratio Recurring Churn Rate 3,756million yen 66.5% 0.7% YoY＋27.0% YoY＋4.1pt Yo
Slide 8: FY04/2025 Q2 Performance Summary
FY04/2025 Q2 Performance Summary ◼ Revenue continues to grow, driven by double-digit growth primarily in the BtoC business, along with contributions to profit and loss from Tifana.com, which was integrated into the group in March 2024. ◼ On the other hand, delays in revenue recognition in the BtoB b
Slide 9: Full-Year Progress and Breakdown of Product Investment
Full-Year Progress: Landing at an operating profit of 240 million yen on an actual basis. ■ Actual operating profit was 88 million yen, with an actual basis operating profit landing at 240 million yen. ■ Investments in "HEROZ ASK" and "JOINT" progressed faster than budgeted due to early exhibitions
Slide 10: Trends in KPIs (Quarterly)
Trends in KPIs (Quarterly) Revenue Trends EBITDA Trends (Unit: Million Yen) (Unit: Million Yen) 1,500 300 1,403 1,423 279 281 1,296 258 256 1,217 1,209 250 *Delays in revenue 1,200 1,114 1,100 1,118 recognition in the BtoB business and upfront investments 200 for the launch of SaaS products. 900 170
Slide 11: Group total ARR 3,756 million yen
Our total ARR reached approximately 3.75 billion yen, achieving +27.0% YoY. ARR Trends (Unit: Million Yen) Significant growth of ARR 4,000 YoY YoY+ 27.0 % +27.0％ Growth 3,756 3,655 Group total ARR 3,756 millon yen 3,500 3,328 3,357 2,872 2,958 3,000 2,898 2,827 ◼ Recurring revenue includes BtoC and
Slide 12: Recurring Revenue Trends
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 ◼ Breakdown of recurring revenue is as follows: 1,000 ・ Shogi Wars-related Subscriptions ・ BtoB Continuous Contracts/Sub
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, we continue to actively hire, focusing on engineering and business roles in the BtoB sector. This has led to a steady increase in staff, resulting in an 18.2% increase in the total cost of sales for Q2 compared to the same period last ye
Slide 15: Performance by Segment: FY04/2025 Q2
Performance by Segment ：FY04/2025 Q2 ■ In the AI/DX business, while there were delays in revenue recognition in the BtoB sector, stable growth in the BtoC sector and the effects of new M&A led to continued revenue growth. Tifana.com joined the AI/DX business in Q1, and VOIQ from the sales support se
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 AI Square, and AI business of Tifana.com. ◼ From the second quarter, VOIQ has also been added to this se
Slide 17: AI/DX Segment: HEROZ BtoB expects further expansion in second half
AI/DX Segment: HEROZ's BtoB expects further expansion in the second half due to an increase in the number of projects and other factors. BtoB Number of BtoB Average Number of HEROZ BtoB Revenue Trends Active Projects Quarterly Personnel Quarterly ・Despite being below the same period last year due to
Slide 18: AI/DX Segment: BtoC double-digit growth
AI/DX Segment BtoC continues to achieve double-digit growth, supported by overwhelming network externalities. ◼ The BtoC boasts overwhelming network externalities in offerings like Shogi Wars, achieving double-digit growth again in the second quarter. ◼ In November 2024, a new service called "Season
Slide 19: AI Security Segment
AI Security Segment ◼ This segment involves implementing HEROZ Group's AI into the security business operated by Vario Secure. ◼ The recurring revenue ratio is very high at 86.3%, enabling the development of a business capable of generating stable revenue. FY04/2025 The recurring revenue ratio is ma
Slide 20: AI Security Segment: Managed security stable revenue base
AI Security Segment Managed security maintains a stable revenue base with a low cancellation rate. Managed Security Service Managed Security Service Cancellation Rate Trend End User Number Trend (end of each quarter) The quarterly cancellation rate consistently remains ・The number of end-user below
Slide 21: Balance Sheet (End of October 2024)
Balance Sheet (End of October 2024) ◼ 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 © 2024 HEROZ, Inc. 22
Slide 23: HEROZ ASK growth in revenue and customers
'HEROZ ASK' growth in both revenue and the number of customers （In October 2024, the number of contracted customers surpassed 100 ） ◼ 'HEROZ ASK' is continuing with feature improvements, UI enhancements, and expansion activities ◼ In October, the cumulative number of contracted customers surpassed 1
Slide 24: JOINT iPaaS for SaaS
StrategIT is expanding the number of supported SaaS with 'JOINT iPaaS for SaaS’ ◼ In 'JOINT,' various connector developments are underway, and the number of supported SaaS surpassed 50 in October ◼ The projected MRR is gradually expanding, and going forward, we aim to enhance functionality and expan
Slide 25: Exhibition participation and webinars expanded
During the second quarter, activities such as exhibition participation and webinars have also expanded ◼ During the second quarter, we participated in events such as the 'DX EXPO' and 'AI EXPO 2024,' and also conducted various webinars ◼ Both 'BtoB AI Solution' and 'HEROZ ASK' have acquired many lea
Slide 26: VOIQ PMI activities accelerating
Regarding VOIQ, PMI activities are accelerating, and the number of HEROZ’s business negotiations has significantly increased ◼ To strengthen inside sales within the group and aim for AIX in the same field, the business was transferred to VOIQ in August 2024 ◼ Focusing on 'HEROZ ASK' and AI solutions
Slide 27: Progress of the Next-Generation Contact Center Project
Announcement on the Progress of the 'Next-Generation Contact Center Project ◼ In the 'Next-Generation Contact Center' project, significant operational efficiency improvements were achieved in the first phase, focusing on 'Enhancing Operator Support for Productivity Improvement ◼ Moving forward, we w
Slide 28: 三國志 HEROES to launch on Apple Arcade
The new and exciting battle board game ‘三國志 HEROES' is set to launch on Apple Arcade! ◼ Regarding ‘三國志 HEROES,' currently in joint development with Koei Tecmo Games, it has been decided to release it on Apple Arcade ◼ he 2020 developed ‘三国志ヒーローズ' has been upgraded with gameplay improvements to enhan
Slide 29: Industry-academia collaboration agreement with Japan Kogakuin
HEROZ and Japan Kogakuin have signed an industry-academia collaboration agreement to promote AI utilization in educational settings! ◼ HEROZ and Japan Kogakuin have signed an industry-academia collaboration agreement to utilize AI in educational settings and develope AI talent ◼ We are providing tec
Slide 30: AI Sakura-san recurring revenue and contracts increasing
The recurring revenue and cumulative number of contracts for AI Sakura -san are steadily increasing ◼ AI Sakura-san is increasingly active in new areas and fields, such as pilot projects at My Number counters and Takarazuka Station ◼ The cumulative number of contracts for AI Sakura-san is also stead
Slide 31: 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 32: Topics for Q2 (Marketing)
Topics for Q2 of the Fiscal Year Ending February 2025 (Marketing) ◼ Began targeting industries such as 'manufacturing' and 'construction,' where the need for cybersecurity measures is increasing due to DX © 2024 HEROZ, Inc. 32
Slide 33: Frequently Asked Questions and Answers
04 Frequently Asked Questions and Answers © 2024 HEROZ, Inc. 33
Slide 34: 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 1st quarter and outlook for the current term A：Regarding HEROZ's BtoB business, a