First Accounting, specialized in AI solutions business in the accounting field, announced the interim financial results for the period ending December 2024 on August 14th. The cumulative sales revenue increased by 40.5% year-on-year to 785 million yen, and the operating profit increased by 77.0% to 99 million yen, despite the office relocation cost of 37 million yen, leading to a substantial increase in both revenue and profit.
MRR (Monthly Recurring Revenue) accounts for 83.9% of the total, while usage-based billing accounts for 11.8%, resulting in a stable and easily improvable profit margin revenue structure. Sales are balanced and growing steadily across accounting vendors (OEM), large enterprises (via sales partners), and large enterprises (direct sales). The alliance partnership with SAP, the leading ERP company, is expected to further expand the sales channels. With the average revenue per account (ARPA) maintained at around 1 million yen, amid ongoing new customer acquisition and contributions from upsell and cross-sell, the churn rate remained within the range of 0.5-1.5%. The Annual Recurring Revenue (ARR) has been steadily accumulating, reaching 1,581 million yen (with an annual average growth rate of 45.8%).
The full-year performance forecast for December 2024 predicts a 34.2% increase in sales revenue to 1,653 million yen, and a 32.4% increase in operating profit to 167 million yen. The full-year forecast remains unchanged due to additional investments in AI learning servers and human resources, but the progress rate for the operating profit forecast up to the interim period is already at a high level of 59.6%. The company, being a stock-based business, does not experience significant seasonal fluctuations in its performance.
Compared to the company's market value of 10.5 billion yen, the proportion of foreign corporate and institutional investors is relatively high. While the performance is commendable, and despite the not particularly high yield, the company has successfully attracted investors based on the presence of dividends. The establishment of a nominating compensation committee and forward-looking organizational structure are also anticipated to be positively evaluated. The medium- to long-term goal is to achieve sales revenue of 10 billion yen and an operating profit margin of 10% by 2028.
The company's services are primarily composed of the Robota series, which modularizes algorithms related to AI-OCR and accounting entries, and Remota, a platform specialized in invoice processing with a user interface (GUI). Additionally, the services include the Peppol Access Point Service for digital invoice transmission and reception.
One of the features of the Robota series is its high reading accuracy not only for standard document formats but also for non-standard document formats and handwritten documents. It also has functions such as sorting documentary images, cutting out multiple pieces of documentary evidence attached to a backboard, and checking if the read content is correct, in addition to simply entering the characters and numbers read from the document. It can also be used for expense settlement and invoice payment reconciliation. It is a SaaS-type cloud service where necessary products can be selected and combined according to the needs of automated accounting operations. Its billing system is based primarily on a monthly recurring revenue (MRR) for a period of one year or more, with variable charges based on the number of documentary evidence read.