E-seikatsu Co., Ltd.TSE: 3796

Consolidated Financial Results for the Three Months Ended June 30, 2024 (Japanese GAAP)

Aug 7, 2024 at 10:00 PM 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.

August 8,2024

(Delayed)Consolidated Financial Results for the Three Months Ended June 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 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 Three months ended June 30, 2024 (April 1, 2024 to June 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


Three months	Millions	%	Millions	%	Millions	%	Millions	%	Millions	%
ended	of yen	of yen	of yen	of yen	of yen

June 30, 2024	711	4.6	92 △31.1	△34	‐	△30	‐	△23	‐

June 30, 2023

680

10.1

133

3.0

△11.2

98.8

26 138.8

Note: Comprehensive Income	For the Three months ended June 30, 2024	△23Millions of yen	(‐%)
	For the Three months ended June 30, 2023	26Millions of yen	(138.8%)

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

- 1 -

	Basic earnings per share	Diluted earnings per share

Three months ended	Yen	Yen
June 30, 2024	△3.43	-
June 30, 2023	3.86	-

(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 June 30, 2024	2,436	1,888	77.5	273.64
As of March 31, 2024	2,540	1,946	76.6	282.08

Reference: Equity	As of June 30, 2024	1,888	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	-


Forecast for Fiscal Year Ended March 31, 2025		0.00	-	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.

- 2 -

Notes

(1) Significant changes in the scope of consolidation during the period: None

(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial

statements: None
(3) 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
(4) Number of Shares Issued (Common shares)
1)	Total number of issued shares at
As of June		As of March
	the end of the period (including	7,280,700 Shares	7,280,700 Shares
	treasury shares)	30,2024		31,2024

2)	Number of treasury shares at the
As of June	379,323 Shares	As of March	379,299 Shares
	end of the period	30,2024		31,2024
3)	Average number of shares

	outstanding during the period	Three months	6,901,383 Shares	Three months	6,901,401 Shares
	ended June	ended June
	(cumulative from the beginning
	30,2024		30,2023
	of the fiscal year)

*Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: Yes (voluntary)

* Proper use of earnings forecasts, and other special matters

Supplementary materials on quarterly financial results will be disclosed by TDnet on August 8, 2024, and will be posted on our website on the same day

- 3 -

Table of Contents of Attachments

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

Segment information, etc

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

- 4 -

1. Qualitative Information on Current Quarterly Financial Results

Earnings

In the cumulative business results for the first quarter (April 1, 2024 to June 30, 2024), Net Sales was 711,683 thousand yen (a 4.6% increase in YOY), EBITDA was 92,348 thousand yen (a 31.1% decrease in YOY), operating loss was 34,435 thousand yen (operating profit 16,177 thousand yen in the same period of the previous year), ordinary loss was 30,148 thousand yen (ordinary profit 39,203 thousand yen in the same period of the previous year), and the loss attributable to owners of parent was 23,705 thousand yen (the profit attributable to owners of parent 26,621 thousand yen in the same period of the previous year).

	Three months ended	Three months ended	Year-on-year change
	June 30, 2023	June 30, 2024

Summary of Consolidated Results
		Difference	Rate of

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

Net sales	680,470	711,683	31,212	4.6

EBITDA	133,942	92,348	△41,593	△31.1

Operating profit	16,177	△34,435	△50,612	-

Ordinary profit	39,203	△30,148	△69,351	-

Profit attributable to owners of parent	26,621	△23,705	△50,327	-

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 first quarter of fiscal 2025 ended June 30, 2024, sales were 711,683 thousand yen (up 4.6% YOY), an increase of 31,212 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.

The number of subscription customers reached 1,512 as of the end of the first quarter (1,492 in the same period of the previous year), and the ARPU (*1 & *2) in June was approximately 139,700 yen (133,700 yen in the same period of the previous year).

*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.

- 5 -

The breakdown of net sales is as follows.

	Three months ended	Three months ended	Year-on-year change
	June 30, 2023		June 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)	599,143		88.0	623,750		87.6	24,606	4.1

Solution (Note 2)	81,327		12.0	87,932		12.4	6,605	8.1

Total	680,470		100.0	711,683		100.0	31,212	4.6

(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 322,080 thousand yen (up 7.9% 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 424,038 thousand yen (up 15.9% YOY).

As a result, EBITDA for the quarter was 92,348 thousand yen (down 31.1% YOY), a decrease of 41,593 thousand yen from the same period last year. Operating loss was 34,435 thousand yen (operating profit 16,177 thousand yen in the same period of the previous year), a decrease of 50,612 thousand yen.

In addition, forward exchange contracts are used to reduce foreign exchange risks associated with transactions denominated in U.S. dollars, and the recent depreciation of the yen resulted in foreign exchange gains related to these contracts as non-operating income. As a result, ordinary loss was 30,148 thousand yen (ordinary profit 39,203 thousand yen in the same period of the previous year), a decrease of 69,351 thousand yen.

- 6 -

Overall, sales of both SaaS subscription and solutions progressed roughly as expected. Human capital and related investments also progressed roughly as expected, resulting in an increase in cost of sales and selling, general and administrative expenses, primarily due to personnel expenses.

As a result, our break-even point has risen because our cost structure is centered on fixed costs, but our model is to accumulate SaaS subscriptions every month. Therefore, although the monthly increase in revenue has not yet covered the increase in expenses as of the end of the first quarter, we expect to exceed the break-even point as the quarter progresses due to the increase in subscription revenue.

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 first quarter were 2,436,271 thousand yen, a decrease of 104,327 thousand yen from the end of the previous consolidated fiscal year.

The Current Assets balance was 715,504 thousand yen, a decrease of 186,518 thousand yen from the end of the previous consolidated fiscal year. This is attributable to a decrease in cash and deposits of 266,237 thousand yen, an increase of 46,442 thousand ye in prepaid expenses for the use of internal systems such as customer management, an increase of 35,205 thousand yen in work in progress related to ongoing projects for expanding and supporting the implementation of our SaaS, etc.

The balance of Non-Current Assets increased by 82,190 thousand yen from the end of the previous consolidated fiscal year to 1,684,766 thousand yen. The main factors behind this increase were an increase of 29,000 thousand yen in software and an increase of 25,083 thousand yen in software in progress that related to additional investments in strengthening the functionality of our in-house developed cloud services, and an increase of 20,040 thousand yen in property, plant and equipment related to renovation of branch facilities, etc.

Liabilities

Total liabilities at the end of the first quarter were 547,778 thousand yen, a decrease of 46,101 thousand yen from the end of the previous consolidated fiscal year.

The balance of current liabilities was 544,968 thousand yen, a decrease of 46,101 thousand yen from the end of the previous consolidated fiscal year. The main factors behind the decrease were a decrease of 46,356 thousand yen decrease in income taxes 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 first quarter of were 1,888,492 thousand yen, a decrease of 58,226 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 23,705 thousand yen due to the recording of loss attributable to owners of parent, etc.

- 7 -

Cash Flow

The balance of cash and cash equivalents as of the end of the first quarter of the current consolidated fiscal year was 473,133 thousand yen, a decrease of 266,237 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 32,283 thousand yen (129,615 thousand yen in the same period of the previous year). The main sources of income are depreciation of 126,783 thousand yen. The main expenditure factors were a decrease in provision for bonuses due to bonus payments of 41,653 thousand yen, income taxes paid of 39,320 thousand yen, an increase in inventories of 35,205 thousand yen relating to an ongoing project to support the expansion development and implementation of our SaaS, loss before income taxes of 31,662 thousand yen, and other expenditures of 35,200 thousand yen relating to prepayments of internal system usage fees, etc.

(Cash flows from investing activities)

Net cash used in investing activities were 202,239 thousand yen, (172,215 thousand yen in the same period of the previous year). The main expenditure were 175,162 thousand yen for acquisitions of intangible Non-Current Assets relating to the new development and functional expansion of SaaS, and 25,900 thousand yen for the acquisition of tangible fixed assets for the renovation of branch facilities, etc.

(Cash flows from financing activities)

Net cash used in financing activities were 32,921 thousand yen, (32,309 thousand yen in the same period of the previous year). The main source was Cash dividends paid amounted to 32,907 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, as the results for the first quarter of the current consolidated fiscal year are generally in line with expectations.

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)

- 8 -

2. Quarterly Consolidated Financial Statements and Major Notes

(1) Quarterly Consolidated Balance Sheets

		(Thousands of yen)

	As of March 31, 2024	As of June 30, 2024

Assets
Current assets

Cash and deposits	739,371	473,133
Notes and accounts receivable - trade,	61,362	55,047
and contract assets

Work in process	59,132	94,337
Prepaid expenses	61,167	107,609

Forward exchange contracts	－	1,767
Other	18,544	22,481

Allowance for doubtful accounts	△1,554	△2,872
Total current assets	938,023	751,504

Non-current assets
Property, plant and equipment

Facilities attached to buildings	56,565	67,029
Accumulated depreciation	△45,745	△40,936

Facilities attached to buildings, net	10,820	26,093
Tools, furniture and fixtures	168,841	174,687

Accumulated depreciation	△142,223	△142,878
Tools, furniture and fixtures, net	26,618	31,809

Construction in progress	424	－
Total property, plant and equipment	37,862	57,903

Intangible assets
Trademark right	1,048	1,019

Software	1,230,431	1,259,432
Software in progress	158,003	183,086

Total intangible assets	1,389,483	1,443,538
Investments and other assets

Golf club membership	42,000	42,000
Leasehold and guarantee deposits	74,855	75,518

Long-term prepaid expenses	31,007	29,010
Deferred tax assets	27,365	36,794

Total investments and other assets	175,229	183,324
Total non-current assets	1,602,575	1,684,766

Total assets	2,540,599	2,436,271

- 9 -

			(Thousands of yen)

		As of March 31, 2024	As of June 30, 2024

Liabilities
Current liabilities

Accounts payable - other	135,837	158,485
Income taxes payable	52,963	6,606

Advances received	301,298	288,502
Deposits received	13,418	36,631

Provision for bonuses	59,600	17,947
Other	27,952	36,795

Total current liabilities	591,069	544,968
Non-current liabilities

Guarantee Deposited	2,809	2,809
Total non-current liabilities	2,809	2,809

Total liabilities	593,879	547,778
Net assets

Shareholders' equity
Share capital	628,411	628,411

Capital surplus	718,179	718,179
Retained earnings	738,729	680,516

Treasury shares	△138,600	△138,614
Total shareholders' equity	1,946,719	1,888,492

Total net assets	1,946,719	1,888,492
Total liabilities and net assets	2,540,599	2,436,271

- 10 -

Earlier from E-seikatsu

All E-seikatsu news releases