■Summary

Unerry <5034> operates under the mission of "Creating a comfortable future with data," analyzing real-world data with AI, and contributing to the improvement of the UX of life by visualizing real spaces. Through the real behavioral Big Data platform "Beacon Bank (R)" (hereinafter referred to as "Beacon Bank"), data on human flow that does not identify specific individuals is collected, and three services: "Analysis/Visualization," "Behavioral Change," and "One to One" are provided to customers.

※ UX (User Experience: The experience gained by the user through products and services)

1. Overview of results for the fiscal period ending June 2024

For the fiscal period ending June 2024, the results were revenue of 2,834 million yen (a 36.5% increase from the previous term), operating profit of 179 million yen (an increase of 409.3%), ordinary profit of 134 million yen (an increase of 286.5%), and net income of 68 million yen (an increase of 629.5%), landing the company in a position of increased revenue and profit. The achievement rate against the initial plan was 97.8% for revenue, which fell slightly short, but gross profit was 103.6%, operating profit was 153.0%, and net income was 104.6%, all meeting the plan. The steady growth in the number of recurring customers and the successful implementation of cross-selling strategies to these customers maintained a high customer unit price, while new businesses such as retail media and Smart City achieved significant growth, contributing to the increase in revenue. In terms of profit, the gross margin (gross profit) was 37.6% (an increase of 3.8 percentage points from the previous term), and particularly the high-margin analysis and visualization services have grown significantly, along with improvements in the gross margin of the relatively high-cost behavioral change services. Operating profit was largely updated to a record high due to improvements in gross margin, as well as the effects of reduced server costs (37 million yen), and reductions in indirect personnel expenses and business outsourcing costs (25 million yen). As for ordinary profit, due to the fact that the North American business expansion is taking more time than anticipated during the fiscal period ending June 2024, a bad debt reserve for all investments (48 million yen) was included in non-operating expenses, which resulted in the growth rate of operating profit being lower.

2. Outlook for results for the fiscal period ending June 2025

The financial estimates for the fiscal period ending June 2025 are projected to be revenue of 3,746 million yen (a 32.2% increase from the previous term), operating profit of 240 million yen (an increase of 34.2%), ordinary profit of 240 million yen (an increase of 78.5%), and net income of 138 million yen (an increase of 103.0%). Revenue is expected to be achieved by converting new customers from retail DX and retail media businesses during the fiscal period ending June 2024 into recurring customers, and steadily implementing cross-selling and upselling strategies. Plans are to actively grow the analysis and visualization services and behavioral change services as engines of growth. Out of a total of 203 customers in the fiscal period ending June 2024, 109 will be recurring customers, and 94 will be new or ongoing customers, with a target of converting 33 of the 94 new or ongoing customers into recurring customers in the fiscal period ending June 2025. For new customers, efforts will be made to convert them into recurring customers using analysis and visualization services as triggers. For recurring customers, it is estimated that the annual customer unit price will remain at 23 million yen compared to the fiscal period ending June 2024, while NRR will slightly decline from the previous term to 119%. In terms of profit, an increase in operating profit is expected to be in line with revenue growth. Regarding the cost of sales, with increased revenue, the overall data volume will increase and infrastructure costs will rise; additionally, advertising costs for the advertising transformation service and outsourcing costs for the One to One service will expand, though the cost rate is expected to be maintained at around 64%, the level from the past three periods. For selling, general, and administrative expenses, an increase in personnel expenses and outsourcing costs is expected due to a stronger hiring focus for product development investments mentioned later, leading to a total of 1,120 million yen (a 26.4% increase from the previous term), but the selling, general, and administrative expense ratio is expected to improve by decreasing 1.4 percentage points from the previous term due to increased revenue.

※ NRR: Net Revenue Retention Rate = (Current year revenue from recurring customers acquired in the previous year) ÷ (Revenue from those customers in the previous term).

3. Overview of the Medium-Term Growth Strategy

In September 2024, the "Business Plan and Growth Potential Presentation Materials" will be announced, revealing the progress towards the goal set in September 2023 of achieving a revenue of 10 billion yen for the fiscal year ending June 2028 as part of the medium-term growth strategy. The average annual growth rate is planned at 36% from the fiscal year ending June 2023 to the fiscal year ending June 2028, but growth of 37% compared to the previous fiscal year is being shown for the fiscal year ending June 2024, indicating that the plan is progressing steadily. To achieve the revenue target of 10 billion yen for the fiscal year ending June 2028, the focus will be on raising the breadth and volume of data on the data platform to global standards to enhance analytical accuracy and expand applicable services, while steadily promoting the organizational foundation to drive the success equation of "customer acquisition x increase in recurring customer unit price." The required management objectives are outlined as "improving potential growth rate," "acquiring new customers," "recurring customer development and increasing unit price," and "rapid organizational growth," with four concrete strategies developed and being promoted for achieving each objective.

■Key Points

・For the fiscal year ending June 2024, almost all of the initial forecasts have been achieved, securing the highest profit margins in history.

・For the fiscal year ending June 2025, continued high growth is expected in both revenue and profit.

・Accelerated expansion of Retail DX, Retail Media, Smart City, and Global Business.

・Four strategies essential for achieving the medium-term growth strategy have been formulated.

(Writer: FISCO analyst Tomoichi Murase)