Intelligent Wave Inc.TSE: 4847

Financial Results for FY06/24, presentation

Aug 9, 2024 at 4:26 AM UTC · MarketScreener

Financial Results for FY06/24

(July 1, 2023 to June 30, 2024)

[Non-Consolidated]

Intelligent Wave Inc.

Announced on August 9, 2024

Financial Results for FY06/24

Forecast for FY06/25

Reference

Overview

Both sales and profits increased from the previous year, with growth in systems development, cloud services and security, and both sales and profits reached record highs. On the other hand, both sales and profits fell just short of the initial plan. Sales in existing fields exceeded the initial plan, but sales in new businesses did not grow as much as initially expected.

									Million yen

		FY06/23	FY06/24	Change
								Initial forecast
			Sales		Sales
				(YoY)
		Results	composition	Results	composition

			ratio		ratio

Net sales		13,374	-	14,518	-	+1,144	+8.6%	15,000
Gross profit		4,269	31.9%	4,707	32.4%	+438	+10.3%
		-
SG&A expenses		2,713	20.3%	2,677	18.4%	(36)	(1.3%)
		-
Operating income		1,556	11.6%	2,030	14.0%	+474	+30.5%
		2,250
Ordinary income		1,603	12.0%	2,072	14.3%	+469	+29.3%
		2,290
Net income		1,165	8.7%	1,420	9.8%	+255	+21.9%
		1,590


Amount of orders	14,785	-	20,128	-	+5,343	+36.1%
Orders on hand	10,974	-	16,584 ｃ	-	+5,610	+51.1%

Sales by Category

Sales in system development, cloud services, and security grew. Third-party products and services decreased YoY due to large-scale hardware sales for FEP* system renewal in the previous fiscal year.

				Million yen

	FY06/23	FY06/24	Change(YoY)

Net sales	13,374	14,518	+1,144	+8.6%

Payment and finance	10,408	10,455	+47	+0.5%

System development	6,015	7,009	+994	+16.5%

Maintenance	1,638	1,630	(8)	(0.5%)

In-house products and	505	386	(119)	(23.6%)
services


Third-party products and	2,249	1,428	(821)	(36.5%)
services (hardware, etc.)


Cloud services	1,867	2,504	+637	+34.1%

Security	1,098	1,558	+460	+41.9%

＊Front-end processor (FEP) system: Hardware and software with network connectivity, card usage authentication, and other functions required for credit card payment processing

Sales by Business Domain

Payment systems, etc., an area of expansion in the payment business domain, grew due to acquiring system for a major credit card company. FEP and fraud detection declined due to large-scale hardware sales in the previous year. Security grew in the current financial year due to contributions from sales of cryptographic key management solutions (HSM) and ID management solutions.

		Million yen

FY06/23	FY06/24	Change(YoY)

Net sales	13,374	14,518	+1,144	8.6%
			＋

Payment and finance	10,408	10,455	+47	＋0.5%

FEP and fraud detection	6,787	5,673	(1,114)	(16.4%)

	2,747	3,973	+1,226	44.6%
Payment systems, etc.				＋
Finance and others	873	808	(65)	(7.4%)

Cloud services	1,867	2,504	+637	＋34.1%

Security	1,098	1,558	+460	＋41.9%

＊Front-end processor (FEP) system: Hardware and software with network connectivity, card usage authentication, and other functions required for credit card payment processing

Top Three Clients by Sales

As for DNP, sales increased, particularly for security products. 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.

Million yen

				FY06/23	FY06/24	Change	Main projects
				(YoY)


							TSP development (smartphone
1.	D	N	P	1,665	1,675	+10	payment)
System operation (24/365)
							Key management system

2.	System		1,177	1,670	+493	System development for credit
Integrator		card company


3.	Credit card	648	980	+332	System development in multiple
areas (FEP, fraud detection, Digital
company
					transformation of payments)

Sales by Type (Recurring and Spot)

Recurring revenue is increasing steadily due to higher sales of cloud services. In the future, the company aims to expand the scale of its business in combination with the growth of flow sales such as system development.

…Spot

…Recurring

Million yen

Recurring ratio 52.3%

			2,216	2,175			1,681		1,920	1,888	1,759
			1,517	1,442	1,350

		1,634
	1,382
1,055

			1,442	1,470	1,625	1,664	1,796	1,808	1,867	1,917	2,006
1,196	1,252	1,312

1Q	2Q	3Q	4Q
	FY06/22

1Q 2Q 3Q 4Q FY06/23

1Q 2Q 3Q 4Q

FY06/24

Recurring: Categories with contracts that allow us to record sales of a fixed amount on a regular basis

Spot: Categories with contracts that are not fixed in terms of amount or timing

Operating income

Gross profit increased due to higher sales and improved gross margins in system development and cloud services. Selling, general and administrative (SG&A) remained at the same level as in the previous fiscal year due to cost optimisation efforts, and operating profit increased significantly compared to the previous year.

■ … Operating income ●… Operating margin

Gross profit	SG＆A expense	Operating income	Million yen


Gross profit margin	SG&A expense ratio	Operating margin

50.0%

45.0%

40.0%

35.0%

2,030

1,519 1,556

2,000	27.5%	33.3%	34.4%	32.4%	31.1%	31.3%	32.2%	33.0%	30.2%	32.8%	33.6%	32.6%	40.0%
					21.2%	21.5%	20.9%
1,800	21.9%	19.9%	18.7%	16.7%	17.9%	21.9%	17.3%	16.7%	18.4%
	20.0%

1,600		13.4%	15.7%	15.7%	13.2%					15.5%	16.9%	14.2%
		10.1%	10.7%	12.1%	8.3%	0.0%
1,400	5.6%

30.0%

25.0%

20.0%

15.0%
10.0%	13.2%	14.0%
	11.6%

5.0%

0.0%

FY06/22 FY06/23 FY06/24

1,200																			-20.0%

1,000
800																			-40.0%

600					1,186	1,134				1,149	1,244	1,278	1,229	-60.0%

400	620		877	1,015				985	1,000			955			644
						665		667		728	691			694
						651
					610						-80.0%
	493		525		550							656	634			534
200			576	483	319	332	420
126	352	464		263	588

0																		-100.0%

1Q	2Q		3Q	4Q		1Q	2Q		3Q		4Q	1Q	2Q	3Q			4Q


			FY06/22				FY06/23					FY06/24					8

Copyright © 2024, INTELLIGENT WAVE INC. All rights reserved.

Cloud Service Business

Net sales increased YoY due to an expanded user base (five companies in total), mainly due to the fraud detection service IFINDS. Profits increased YoY due to higher sales and changes in the service composition ratio. Orders received increased YoY, due to large IGATES projects; orders on hand rose.

																												Million yen

																			FY06/23					FY06/24
																		Q1	Q2				Q3	Q4	Q1	Q2	Q3	Q4
						Amount of orders				507	822			2,794	297	614	969	890	2,761
										Net sales					434	447			469	515	592	587	618	705
						Orders on hand					4,214	4,589			6,913	6,695	6,717	7,098	7,371	9,426

									Gross profit					(4)	29			44	71	96	84	94	75

	Number of customers							Overview
												35
																					Service				Overview
		IOASIS				IFINDS	30							1

40
IGATES				IPRETS
			25					1	9				Demand from existing customers for additional functionality and

						1									■ IOASIS
																		expansion in response to increased transaction volumes increased.
							20					1	9
		1		9
												The number of companies introducing "FARIS Shared Scoring
20	9						15					6	6	11
						11		10				1	3				■ IFINDS	Service Powered by PKSHA Security", which prevents fraud by fraud-
		6							2	2	4						data-sharing among issuers, increased. New services are launched
														3	3							progressively in	our next-generation fraud prevention project,
		10		11	5	3	10	10	10
0		5	5			"FARIS."
									0	4


			FY06/23																	We received a large-scale project for the development of a multi-user
							FY06/24				FY06/19 FY06/20 FY06/21 FY06/22 FY06/23 FY06/24		■ IGATES

																							platform. (The platform is scheduled to begin operating in autumn
				Q3				Q3
																								2024.)

Amount of orders

The amount of orders rose in Payment and finance due to a large-scale project for a credit card company as well as a large-scale infrastructure construction and operation project. Cloud services increased due to a large-scale project. In Security, orders grew in existing security products along with cryptographic key management solutions (HSM) and ID management solutions.

■ …Payment & Finance (System Development)	■ …Payment & Finance (Maintenance, Hardware, etc.)				Million yen

■ …Cloud Services			■ …Security										6,355
22,000
		20,128
														305
20,000										5,421			5,515
		2,566
18,000
15,722				4,686					286			631

16,000	14,785
				4,252						4,257			2,761
		5,236		228	3,954
	954								969	4,000
14,000	1,014			299

	3,461							3,329			807
12,000			2,829	1,876	273	339	3,130	2,794			821
	4,420			311	132		2,904

10,000			4,615								614	1,781
		86		1,930		322	822		273	890	1,147
	5,734					507
8,000	3,515		1,000			2,146			297	835
			1,189
6,000							903	945	864	807			859
4,000				476
		7,708									2,001	2,134		2,142
		5,834			1,750
	5,570						1,430	1,477	1,527	1,430
2,000		1,267	1,393	1,158	1,398


0
	FY06/22	FY06/23	FY06/24	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q
					FY06/22			FY06/23			FY06/24

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