E-seikatsu Co., Ltd.TSE: 3796

Consolidated Financial Results for the Six Months Ended September 30, 2024 (Japanese GAAP)

Nov 8, 2024 at 3:45 AM UTC · Issued by e-Seikatsu Co., Ltd.

Note: This document has been translated from Japanese original for reference purposes only. Some

sentences have been machine translated. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

November 7,2024

Consolidated Financial Results

for the Six Months Ended September 30, 2024

(Japanese GAAP)

Company name:	e-Seikatsu Co., Ltd.	Listing:	Standard, Tokyo Stock Exchange
Securities code:	3796	URL:	https://www.e-seikatsu.info/
Representative:	President and CEO	Zenichi Maeno
Inquiries:	Executive Vice President and CFO	Hiroyuki Shiokawa
TEL:	+81-03-5423-7820

Scheduled date to file semi-annual securities report	November 7,2024
Scheduled date to commence dividend payment:	-
Preparation of supplementary materials on quarterly financial results:	Yes
Holding of financial results briefing:	Yes	For institutional investors and analysts

(Yen amounts are rounded down to the nearest millions)

1.Consolidated financial results for the Six months ended September 30, 2024 (April 1, 2024 to September 30, 2024)

(1) Consolidated Operating Results (cumulative)

(Percentage indicate year-on-year changes.)

	Net sales		EBITDA		Operating profit	Ordinary profit	Profit attributable
			to owners of parent


Six months ended	Millions	%	Millions	%	Millions	%	Millions	%	Millions	%
of yen	of yen	of yen	of yen	of yen

September 30, 2024	1,447	8.2	232 △16.1	△27	‐	△30	‐	△25	‐

September 30, 2023

1,338

3.9

277

△9.7

△52.6

△18.5

△17.8

Note: Comprehensive Income	For the Six months ended September 30, 2024	△25Millions of yen	(‐%)
	For the Six months ended September 30, 2023	45Millions of yen	(△17.8%)

Note: EBITDA (operating profit+ depreciation expenses) is disclosed as a useful comparative indicator for our group's performance.

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	Basic earnings per share	Diluted earnings per share

Six months ended	Yen	Yen
September 30, 2024	△3.72	-
September 30, 2023	6.65	-

(2) Consolidated Financial Position

	Total assets	Net Assets	Equity-to-asset ratio	Net Assets per Share

	Millions of yen	Millions of yen	%	Yen
As of September 30, 2024	2,405	1,886	78.4	273.36
As of March 31, 2024	2,540	1,946	76.6	282.08

Reference: Equity	As of September 30, 2024	1,886	Millions of yen
	As of March 31, 2024	1,946	Millions of yen

2.Cash dividends

			Dividend per share

	First	Second	Third	Fiscal year-end	Total
	quarter-end	quarter-end	quarter-end


	Yen	Yen	Yen	Yen	Yen
Fiscal Year Ended March 31, 2024	-	0.00	-	5.00	5.00
Fiscal Year Ended March 31, 2025	-	0.00


Forecast for Fiscal Year Ended March 31, 2025			-	5.00	5.00

Note: Revisions to the forecast of cash dividends most recently announced: None.

3.Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2025 (April 1, 2024 to March 31, 2025)

(Percentage indicate year-on-year changes.)

								Profit attributable to	Basic earnings per
	Net sales		Operating profit	Ordinary profit	share attributable to
		owners of parent
								owners of the parent


	Millions of		%	Millions of	%	Millions of	%	Millions of	%	Yen
	yen			yen		yen		yen
Full year	3,119		11.1	100	△43.2	99	△52.4	67	△54.1	9.72

Reference: EBITDA 640 Millions of yen (YonY △2.8%)

Note: EBITDA (operating profit+ depreciation expenses) is disclosed as a useful comparative indicator for our group's performance.

Note: Revisions to the consolidated earnings forecasts most recently announced: None.

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Notes

Significant changes in the scope of consolidation during the period: None
Adoption of accounting treatment specific to the preparation of semi-annual consolidated financial statements: None
Changes in accounting policies, changes in accounting estimates, and restatement.
1. Changes in accounting policies due to revisions to accounting standards and other regulations: None
2. Changes in accounting policies due to other reasons: None
3. Changes in accounting estimates: None
4. Restatement: None
Number of Shares Issued (Common shares)

Total number of issued shares at the end of the period (including treasury shares)
Number of treasury shares at the end of the period
Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

As of September	7,280,700	Shares	As of March	7,280,700	Shares
30,2024			31,2024

As of September	379,323	Shares	As of March	379,299	Shares
30,2024			31,2024

Six months			Six months
ended	6,901,380	Shares	ended	6,901,401	Shares
September			September
30,2024			30,2023

Semi-annualfinancial results reports are exempt from review conducted by certified public accountants or an audit firm.
Proper use of earnings forecasts, and other special matters

Supplementary materials on semi-annual financial results will be disclosed by TDnet on November 7, 2024, and will be posted on our website on the same day

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Table of Contents of Attachments

Overview of Financial Results
1. Earnings
2. Financial position
3. Outlook
Semi-annualConsolidated Financial Statements and Major Notes
1. Semi-annualConsolidated Balance Sheets
2. Semi-annualConsolidated Statement of Income and Semi-annual Consolidated Statement of Comprehensive Income
  Semi-annual Consolidated statements of income Consolidated Year-to-Date
  Semi-annual Consolidated Statement of Comprehensive Income Consolidated Year-to-Date
3. Semi-annualConsolidated Statement of Cash Flows
4. Notes to Semi-annual Consolidated Financial Statements

Segment information, etc

Notes in Cases of Significant Changes in the Amount of Shareholders' Equity Notes to assumptions for ongoing concerns

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1. Overview of Financial Results

Earnings

In the cumulative business results for the semi-annual (April 1, 2024 to September 30, 2024), Net Sales was 1,447,653 thousand yen (a 8.2% increase YOY), EBITDA was 232,733 thousand yen (a 16.1% decrease YOY), operating loss was 27,644 thousand yen (operating profit 41,192 thousand yen in the same period of the previous year), ordinary loss was 30,673 thousand yen (ordinary profit 72,463 thousand yen in the same period of the previous year), and the loss attributable to owners of parent was 25,663 thousand yen (the profit attributable to owners of parent 45,921 thousand yen in the same period of the previous year).

	Six months ended	Six months ended	Year-on-year change
	September 30, 2023	September 30, 2024

Summary of Consolidated Results
		Difference	Rate of

	(thousand yen)	(thousand yen)	(thousand	change
			yen)	（％）

Net sales	1,338,502	1,447,653	109,151	8.2

EBITDA	277,284	232,733	△44,551	△16.1

Operating profit	41,192	△27,644	△68,836	-

Ordinary profit	72,463	△30,673	△103,137	-

Profit attributable to owners of parent	45,921	△25,663	△71,585	-

With the aim of realizing our mission of "Create many 'good life' for others with technology and heart.", we have established a vision of "Create society where comfortable life circulates.". Based on this vision, we develop systems and applications to resolve various issues in the real estate business and the real estate market, and offer these systems as SaaS(Software as a Service), a subscription based service. Through this, we are developing businesses that support digital transformation (DX) in the real estate business.

For the semi-annual of fiscal 2025 ended September 30, 2024, sales were 1,447,653 thousand yen (up 8.2% YOY), an increase of 109,151 thousand yen from the same period last year. This is because acquisition of new customers and up-selling/cross-selling to existing customers performed well.

Subscription sales continued to be strong due to the acquisition of new customers and upselling/cross-selling to existing customers. Subscription sales was 1,257,500 thousand yen (up 4.7% YOY), an increase of 56,317 thousand yen from the same period last year.

The number of subscription customers reached 1,517 as of the end of the semi-annual (1,493 in the same period of the previous year), and the ARPU (*1 & *2) in September was approximately 140,800 yen (134,700 yen in the same period of the previous year).

Solution sales increased to 190,152 thousand yen (up 38.5% YOY), an increase of 52,833 thousand yen from the same period last year, due to partial delivery and acceptance of projects in progress from the previous fiscal year.

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*1 : "the average revenue per user" Current month subscription sales is divided by the number of subscription customers for the current month, and the figures are rounded down to the nearest 100 yen.

*2 : Some sales based on ancillary transactions will be presented as "subscription sales" instead of "solution sales" from the fiscal year ending March 2025. In accordance with this change, sales figures for the fiscal year ending March 2024 have been reclassified based on the same policy.

The breakdown of net sales is as follows.

	Six months ended		Six months ended		Year-on-year change
	September 30, 2023	September 30, 2024

Item details
Sales (thousands	Percentage of	Sales (thousands	Percentage of	Difference	Percentage

	of yen)		total	of yen)		total	(thousand yen)	change (%)

Subscription (Note 1)	1,201,183		89.7	1,257,500		86.9	56,317	4.7

Solution (Note 2)	137,318		10.3	190,152		13.1	52,833	38.5

Total	1,338,502		100.0	1,447,653		100.0	109,151	8.2

(Note 1). Subscription: Revenue earned continuously on a monthly basis unless customers apply for cancellation, including monthly charges for SaaS service and Recurring sales based on the operation support contract after the introduction of SaaS . They are our Monthly Recurring Revenue (MRR).

(Note 2). Solutions : Revenue earned from other services, including fees for initial setting, system installation and operation support on spot , commissioned development of system, and sale or introduction of other companies' services as an agency.

(Note 3). Some sales based on ancillary transactions will be presented as "subscription sales" instead of "solution sales" from the fiscal year ending March 2025. In accordance with this change, sales figures for the fiscal year ending March 2024 have been reclassified based on the same policy.

Due to a significant increase in compensation across the Group and investment in human capital, such as active recruitment of new graduates, personnel expenses, recruitment-related expenses, training expenses, etc., related to development activities increased. In addition, transactions with vendors that provide IaaS (Infrastructure as a Service), the service infrastructure that operates our cloud and SaaS, are conducted in US dollars, and the recent depreciation of the yen has led to an increase in usage fees, etc. As a result of the above, cost of sales was 652,786 thousand yen (up 12.8% YOY).

In addition to the increase in personnel expenses and recruitment-related expenses for sales activities due to the expansion of human capital investment mentioned above, investments in marketing and inside sales to strengthen lead (prospective customer) acquisition, as well as investments in strengthening the functionality of internal systems such as customer management SaaS, resulted in selling, general and administrative expenses of 822,510 thousand yen (up 14.4% YOY).

As a result, EBITDA for the semi-annual was 232,733 thousand yen (down 16.1% YOY), a decrease of 44,551 thousand yen from the same period last year. Operating loss was 27,644 thousand yen (operating profit 41,192 thousand yen in the same period of the previous year), a decrease of 68,836 thousand yen.

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In addition, forward exchange contracts are used to reduce foreign exchange risks associated with transactions denominated in U.S. dollars, and the recent semi-annual yen appreciation resulted in foreign exchange loss related to these contracts as non-operating loss. As a result, ordinary loss was 30,673 thousand yen (ordinary profit 72,463 thousand yen in the same period of the previous year), a decrease of 103,137 thousand yen.

Overall, our company's cost structure is centered on fixed costs, so the break-even point rose as a result of increased personnel costs. However, we expect to exceed the break-even point by increasing SaaS subscriptions month after month, and In the closing accounting period (three months from 2024 July to the end of September), it turned into an operating profit.

In the current interim consolidated accounting period (6 months), there still be an operating loss, but with the increase in monthly subscription revenue from the second half onwards, the overall results for the fiscal year will be in line with the forecast.

Since the Group's reporting segment is the single segment of the "Cloud Solution Business," segment performance is omitted.

Financial Position
- Assets

The Assets as of the end of the semi-annual were 2,405,023 thousand yen, a decrease of 135,576 thousand yen from the end of the previous consolidated fiscal year.

The Current Assets balance was 690,499 thousand yen, a decrease of 247,524 thousand yen from the end of the previous consolidated fiscal year. This is attributable to a decrease in cash and deposits of 322,160 thousand yen, etc.

The balance of Non-Current Assets increased by 111,948 thousand yen from the end of the previous consolidated fiscal year to 1,714,523 thousand yen. The main factors behind this increase were an increase of 83,408 thousand yen in software, etc.

Liabilities

Total liabilities at the end of the semi-annual were 518,488 thousand yen, a decrease of 75,391 thousand yen from the end of the previous consolidated fiscal year.

The balance of current liabilities was 515,678 thousand yen, a decrease of 75,391 thousand yen from the end of the previous consolidated fiscal year. The main factors behind the decrease were a decrease of 36,649 thousand yen in income taxes payable, a decrease of 35,415 thousand yen in account payable, etc.

The balance of long-term liabilities was 2,809 thousand yen, unchanged from the end of the previous consolidated fiscal year.

Net assets

The balance of net assets at the end of the semi-annual were 1,886,534 thousand yen, a decrease of 60,184 thousand yen from the end of the previous consolidated fiscal year. This is attributable to a decrease in retained earnings of 34,507 thousand yen due to the implementation of dividends, and a decrease of 25,663 thousand yen due to the recording of loss attributable to owners of parent, etc.

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Cash Flow

The balance of cash and cash equivalents as of the end of the semi-annual of the current consolidated fiscal year was 417,211 thousand yen, a decrease of 322,160 thousand yen from the end of the previous consolidated fiscal year. Cash flows and their major factors are as follows.

(Cash flows from operating activities)

Cash flows from operating activities were 75,311 thousand yen (268,842 thousand yen in the same period of the previous year). The main sources of income are depreciation of 260,377 thousand yen.

The main expenditure factors were an increase in inventories of 59,022 thousand yen relating to an ongoing project to support the expansion development and implementation of our SaaS, a decrease in account payable of 36,564 thousand yen, other expenditures of 35,067 thousand yen relating to prepayments of internal system usage fees, loss before income taxes of 32,250 thousand yen, and income taxes paid of 23,929 thousand yen, etc.

(Cash flows from investing activities)

Net cash used in investing activities were 364,159 thousand yen, (342,571 thousand yen in the same period of the previous year). The expenditure were 330,094 thousand yen for acquisitions of intangible Non-Current Assets relating to the new development and functional expansion of SaaS.

(Cash flows from financing activities)

Net cash used in financing activities were 32,927 thousand yen, (34,443 thousand yen in the same period of the previous year). The source was Cash dividends paid amounted to 32,913 thousand yen.

(3) Outlook

Consolidated Forecast for the fiscal year ending March 31, 2025 has remained unchanged from the figures published on May 14, 2024.

The Group's consolidated business outlook for the fiscal year ending March 2025 is as follows.

Net Sales:	3,119 million yen (+11.1% YOY)
Operating profit:	100 million yen (	△	43.2% YOY)
Ordinary profit:	99 million yen (		52.4% YOY)
	△
Profit attributable to owners of parent:	67 million yen (△54.1% YOY)

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2. Semi-annual Consolidated Financial Statements and Major Notes

(1) Semi-annual Consolidated Balance Sheets

		(Thousands of yen)
	As of March 31, 2024	As of September 30, 2024

Assets
Current assets

Cash and deposits	739,371	417,211
Notes and accounts receivable - trade,	61,362	56,983
and contract assets

Work in process	59,132	118,155
Prepaid expenses	61,167	94,641

Other	18,544	5,719
Allowance for doubtful accounts	△1,554	△2,212

Total current assets	938,023	690,499
Non-current assets

Property, plant and equipment
Facilities attached to buildings	56,565	67,029

Accumulated depreciation	△45,745	△42,011
Facilities attached to buildings, net	10,820	25,017

Tools, furniture and fixtures	168,841	175,681
Accumulated depreciation	△142,223	△141,829

Tools, furniture and fixtures, net	26,618	33,851
Construction in progress	424	-

Total property, plant and equipment	37,862	58,869
Intangible assets

Trademark right	1,048	990
Software	1,230,431	1,313,840

Software in progress	158,003	157,496
Total intangible assets	1,389,483	1,472,327

Investments and other assets
Golf club membership	42,000	42,000

Leasehold and guarantee deposits	74,855	75,287
Long-term prepaid expenses	31,007	27,014

Deferred tax assets	27,365	39,025
Total investments and other assets	175,229	183,326

Total non-current assets	1,602,575	1,714,523
Total assets	2,540,599	2,405,023

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		(Thousands of yen)
	As of March 31, 2024	As of September 30, 2024

Liabilities
Current liabilities

Accounts payable - other	135,837	100,421
Income taxes payable	52,963	16,313

Advances received	301,298	284,684
Deposits received	13,418	15,569

Provision for bonuses	59,600	69,085
Forward exchange contracts	-	2,827

Other	27,952	26,776
Total current liabilities	591,069	515,678

Non-current liabilities
Guarantee Deposited	2,809	2,809

Total non-current liabilities	2,809	2,809
Total liabilities	593,879	518,488

Net assets
Shareholders' equity

Share capital	628,411	628,411
Capital surplus	718,179	718,179

Retained earnings	738,729	678,558
Treasury shares	△138,600	△138,614

Total shareholders' equity	1,946,719	1,886,534
Total net assets	1,946,719	1,886,534

Total liabilities and net assets	2,540,599	2,405,023

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