Heroz, Inc. · TSE:4382
Heroz — Q1 FY04/2025 Earnings Presentation
37 slides from Heroz's earnings presentation, Sep 13, 2024
Slide 1: Presentation Material for FY04/2025 Q1 Financial Results
Presentation Material for FY04/2025 Q1 Financial Results September 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 Japanes
Slide 2: Contents
Contents 1. Financial Highlights 2. FY04/2025 First Quarter Performance (Consolidated) 3. N e w M & A : T h e t r a n s f e r o f t h e s a l e s o u t s o u r c i n g b u s i n e s s 4 . Initiatives in each business segment 5 . Frequently Asked Questions and Answers © 2024 HEROZ, Inc. 2
Slide 3: Financial Highlights
01 Financial Highlights © 2024 HEROZ, Inc. 3
Slide 4: FY04/2025 1st Quarter Performance Summary
※Starting from the third quarter of the fiscal year ending April 2023, we have been disclosing consolidated financial statements. Please note that for the fiscal year ending April 2023, the Financial Highlights subsidiary’s profit and loss have been included for only six months. ◼ Net sales were 1,4
Slide 5: FY04/2025 First Quarter Performance (Consolidated)
02 FY04/2025 First Quarter Performance (Consolidated) © 2024 HEROZ, Inc. 5
Slide 6: EBITDA: Our Key Performance Indicator
Our Key Performance Indicator ◼ We have set EBITDA, a measure of cash generation, as a key performance indicator and aim to sustainably increase corporate and share value through EBITDA growth. ◼ Formula: Operating profit + amortization and other non-cash expenses (amortization of goodwill, security
Slide 7: Performance Summary (May 2024-July 2024)
Performance Summary (May 2024-July 2024) HEROZ Group Consolidated Net Sales EBITDA Operating Profit 1,403 mil yen 166 mil yen 74 mil yen YoY＋25.5% YoY -2.1% YoY +1.4% AI SaaS KPI AI Security ARR Recurring Revenue Ratio Recurring churn rate 3,655 mil yen 66.4% 0.8% YoY ＋26.1% YoY ＋1.5pt YoY ±0pt * Re
Slide 8: Performance Overview (May 2023-July 2024)
Performance Overview (May 2023-July 2024) ◼ Revenue continues to grow, driven by the organic BtoB and BtoC businesses, as well as the contribution from Tifana.com , which was integrated into the group in March 2024. ◼ EBITDA and operating profit remained at almost the same level as the previous year
Slide 9: Full-year performance progress: operating profit on a real basis is 138 mil yen
Full-year performance progress: On a real basis, operating profit is 138 mil yen ■ For the 1st Quarter, the actual operating profit was 74 million yen (YoY +1.4%), and on a real basis, the operating profit was 138 million yen. ■ While actively investing in new products through personnel recruitment,
Slide 10: Key Performance KPIs (by Quarter)
Key Performance KPIs (by Quarter) Net Sales EBITDA (Units: JPY Millions) (Units: JPY Millions) 1,500 300 1,403 279 281 1,296 258 256 1,217 1,209 250 ※Investments made to 1,200 1,114 1,100 1,118 launch SaaS products 200 900 170 170 166 150 600 100 300 50 0 0 3Q 4Q 1Q 2Q 3Q 4Q 1Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
Slide 11: The total ARR is approximately 3.65 billion yen
The total ARR is approximately 3.65 billion yen(YoY +26.1%) ARR (Units: JPY Millions) ARR has achieved significant growth YoY 4,000 +26.1％ 3,655 26.1% YoY + 3,500 3,328 3,357 The Group toal ARR: 3,655 mil yen 2,872 2,958 ◼ Recurring revenue includes subscription 3,000 2,898 2,827 sales in the BtoC a
Slide 12: Recurring revenue is continuously increasing
Recurring revenue is continuously increasing, surpassing 900 million yen ◼ In the previous fiscal year’s 4th quarter, recurring revenue was affected by changes in the fiscal year-end of group company. However, in the 1st quarter of the current fiscal year, recurring revenue significantly increased d
Slide 13: Recurring Revenue: Significantly increased with new SaaS offerings and M&A
Recurring Revenue: Significantly increased as the new SaaS offerings and M&A Recurring revenue breakdown (by quarter) Details of revenues Future Outlook Steady accumulation of The revenue from AI Sakura-san installation Numbers (Units: JPY Millions) YoY 1000 +28.4% Recording the usage fee revenue fr
Slide 14: Breakdown of SG&A expenses (Consolidated)
Breakdown of SG&A expenses (Consolidated) ■ Policy to control SG&A expenses through cost control. ■ In Q1, excluding the impact of the companies newly integrated into the group in the previous fiscal year, there was a slight decrease of 4.0% YoY. While we actively continued investments in SaaS-relat
Slide 15: Cost of Sales Breakdown (Consolidated)
Cost of Sales Breakdown (Consolidated) ■ To drive revenue growth, we will continue to actively recruit, primarily for engineering and business positions, and steadily increase our workforce. ■ While achieving significant growth across the entire group, we have appropriately controlled costs, resulti
Slide 16: Segment Performance: First Quarter of the Fiscal Year Ending April 2025
Segment Performance: First Quarter of the Fiscal Year Ending April 2025 ■ AI/DX business continues to achieve revenue and profit growth through M&A and organic growth, while proceeding with investments in new SaaS. From the 1st quarter of this fiscal year, Tifana.Com has been added to the AI/DX busi
Slide 17: AI/DX Business
AI/DX Business ◼ This segment includes BtoC centered on Shogi Wars, BtoB for providing AI solutions to customers, SaaS implementation and SaaS Integration Platform business developed by StrategIT, services in the contact center area developed by AI2, and AI services by Tifana.com. ◼ Starting from th
Slide 18: AI/DX Business: BtoB steady growth, YoY +11.7%
AI/DX Business HEROZ's BtoB business continued to maintain steady growth, YoY +11.7%. BtoB Number of Active Projects BtoB Average Number of HEROZ BtoB Sales by Quarter Personnel per Quarter ・In this Q1, growth of +11.7% YoY was achieved ・The number of active projects by quarter ・We continue to activ
Slide 19: AI/DX Business: BtoC steady growth through network externalities
AI/DX Business BtoC achieved steady growth by leveraging network externalities and conducting collaborations BtoC business continues to grow steadily, leveraging overwhelming network externalities from services like Shogi Wars. Additionally, the increased attention to shogi following Takumi Ito's ca
Slide 20: AI Security Business
AI Security Business ◼ This segment involves implementing the AI developed by the HEROZ Group into the security business operated by Vario secure Inc. ◼ The recurring revenue ratio is very high at 87.3%, enabling us to develop a business that can secure stable revenue Recurring sales ratio is high a
Slide 21: AI Security Business: Managed Security with low cancellation rate
AI Security Business Managed Security maintains a stable revenue base with a low cancellation rate Managed Security Service Managed Security Service Churn Rate End User Count Trends The quarterly churn rate has consistently remained • The long-term trend below 1% remains steadily increasing • Contri
Slide 22: Balance Sheet (As of the end of July 2024)
Balance Sheet（As of the end of July 2024） ◼ The cash and deposits currently held by the company are planned to be sequentially allocated to investments aimed at realizing our medium- to long-term growth strategy ◼ As a result of M&A prior to last year, we have goodwill remaining in intangible fixed
Slide 23: New M&A: The transfer of the sales outsourcing business
03 New M&A:The transfer of the sales outsourcing business © 2024 HEROZ, Inc. 23
Slide 24: Regarding the Business Acquisition of VOIQ Inc.
Regarding the Business Acquisition of VOIQ Inc. In August 2024, our group company VOIQ Inc. acquired the Sales Support Business operated by bizy Inc. 【Overview of the Counterparty】 Name ：bizy Inc. Date of Establishment ：April 2016 Business ：Sales Support Business Recent Fiscal Year's Performance Sal
Slide 25: VOIQ and HEROZ Group Synergies
Promoting AIX in the sales and call center domains and strengthening the overall sales capabilities of the group ◼ The inside sales and call center domains have many analog aspects, offering significant potential for AI replacement and AIX opportunities ◼ By combining VOIQ's expertise with our group
Slide 26: Initiatives in each business segment
04 Initiatives in each business segment © 2024 HEROZ, Inc. 26
Slide 27: After releasing 'HEROZ ASK,' accelerating additional development and expansion
After releasing 'HEROZ ASK,' accelerating additional development and expansion activities ◼ Regarding the AI assistant SaaS 'HEROZ ASK' utilizing Generative AI, it was officially released in May 2024, and we are currently implementing feature improvements and expansion activities ◼ Going forward, we
Slide 28: StrategIT accelerates various updates with 'JOINT iPaaS for SaaS'
StrategIT accelerates various updates with 'JOINT iPaaS for SaaS' ◼ StrategIT accelerates various updates with its new platform for SaaS vendors, 'JOINT iPaaS for SaaS,' including the introduction of CSV upload functionality, 'ChatGPT' connectors, and 'SmartHR' connectors ◼ Going forward, we aim to
Slide 29: Joint validation with MS&AD aimed at proprietary Generative AI model
Conducting joint validation with MS&AD Inc. aimed at building and operating a proprietary Generative AI model ◼ HEROZ, together with MS&AD Insurance Group Holdings, is conducting joint validation aimed at building and operating a proprietary Generative AI model ◼ We will continue joint validation ai
Slide 30: AI Sakura-san Provides Tourist Information at the Airport
AI Sakura-san Provides the Latest Tourist Information at the Airport for the First Time (Airport DX Pilot Project Launched) ◼ We have commenced a groundbreaking digital transformation (DX) pilot project utilizing AI Sakura-san at Nanki-Shirahama Airport ◼ This is the first initiative at an airport t
Slide 31: AI Sakura-san Wins Five Titles at BOXIL SaaS AWARD Autumn 2024
AI Sakura-san Wins Five Titles at the 'BOXIL SaaS AWARD Autumn 2024 ◼ AI Sakura-san Wins Five Titles in the Chatbot Category at the 'BOXIL SaaS AWARD Autumn 2024' ◼ This award follows the spring and summer recognitions, and we will continue to work on improving features and UI to further expand the
Slide 32: Shogi Wars First Collaboration with 'Me & Roboco'
Shogi Wars to Launch First Collaboration with 'Me & Roboco' Starting July 2024 ◼ Shogi Wars will hold its first collaboration event with the popular manga 'Me & Roboco,' currently serialized in Weekly Shonen Jump, from Monday, July 15, 2024, to Thursday, August 15, 2024 Campaign Details About 'Me &
Slide 33: Partnering with FESA for the first international Shogi Wars Kishin Battle
Partnering with FESA to host the first international Shogi Wars Kishin Battle! ◼ Partnering with FESA (Federation of European Shogi Associations), we hosted the Shogi Wars Kishin Battle European Tournament in Barcelona from July to August 2024! ◼ Utilizing Shogi Wars platform to promote the internat
Slide 34: Released 'Vario Ultimate ZERO,' a Zero Trust solution for SMEs
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 35: Topics for Q1 of the Fiscal Year Ending February 2025 (Marketing)
Topics for Q1 of the Fiscal Year Ending February 2025 (Marketing) ◼ Implemented Marketing Automation (MA) to strengthen content strategies ◼ Promote the acquisition and nurturing of leads to accelerate the conversion into opportunities © 2024 HEROZ, Inc. 35
Slide 36: Frequently Asked Questions and Answers
05 Frequently Asked Questions and Answers © 2024 HEROZ, Inc. 36
Slide 37: 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：There is a plan to invest in new SaaS products in the current fiscal year (ending April 2025). Is there likely to be any uneven distribu