Atlas Technologies <9563> provides consulting and project execution support services in the Fintech field, focusing on payment, banking, securities, and insurance related areas to clients both domestically and overseas.

As an independent Fintech consulting company, the company specializes in project management and supports clients from strategy planning to execution seamlessly. With continuous and additional orders, they have a business model with recurring revenue (contracts that last more than 3 months) building up client and project portfolios. They can support projects for clients domestically and internationally, with a track record in over 10 countries including the USA and the UK. They have many project achievements in industries such as telecommunications carriers, financial institutions, retail companies, comprehensive service companies, international money transfer companies, international brand companies, credit card companies, payment agencies, general trading companies, consulting firms, and system integrators.

The company disclosed its medium-term management plan on August 14, 2024, aiming to achieve profitability from the second half of 2025 and throughout the year. They have announced their aim to achieve over 5 billion yen in revenue and an operating margin of over 15% by 2028. They are promoting efforts towards expanding the revenue of existing payment services and turning new banking, securities, and insurance services profitable. In the medium to long term, they aim to improve the overall profitability of the business by recruiting and developing excellent talent and enhancing the value of consulting services.

For the fiscal year ending December 2024, first-half revenue was 1.01 billion yen with an operating loss of 0.171 billion yen. Existing services (payments) continued to exceed budget expectations, while new services under development (banking, securities, insurance) were below expectations due to delays in client acquisition. However, with a focus on deepening existing client projects and an increase in new clients, the number of clients has reached 18 companies. In the second half, they plan to strengthen efforts to link multiple pipeline projects of new services to revenue to achieve the annual performance forecast. Additionally, they have initiated offering security solutions as a new service.

The expected annual revenue is 2.26 billion yen, a decrease of 12.7% compared to the previous period, with an operating loss of 0.375 billion yen. The anticipated decrease in revenue and profits is attributed to upfront investments in personnel and recruitment expenses to accelerate the hiring of excellent consultants, serving as business growth drivers. However, they have secured multiple project inquiries from major domestic companies in the banking, insurance, and securities sectors, accelerating the acceptance of strategic consulting projects. In the second quarter of the fiscal year ending December 2024, the revenue ratio from continuing clients was 95.3%, with revenue excluding NTT DoCoMo at 34.2%. Revenue from NTT DoCoMo decreased to 65.8% from 78.2% in the same period last year, while revenue from clients other than NTT DoCoMo increased. They will continue to focus on upselling to clients with high continuity and additional orders to achieve stable business expansion.

Attention will be drawn to whether this fiscal year's upfront investments will lead to a recovery in performance in the coming fiscal years. The company places emphasis on diversifying client portfolios to achieve sustainable business growth. With few competitors specializing in the Fintech field, it is anticipated that growth will continue in the medium to long term as the number of consultants increases and the market size expands. Furthermore, they are working on expanding their digital solution business, aiming to increase revenue opportunities further by upselling to existing clients like major telecommunications companies and acquiring new clients. Atlas Technologies is a consulting group with a leading track record in the Fintech field in Japan, and their developments are worth watching.