Infomart Corporation Q2 FY2025 earnings call

• Overall First Half Results

  • Consolidated first half revenue reached 9 billion yen, up 24.8% YoY; cost of goods sold fell 24.1% YoY to 2.4 billion yen, driven by cloud migration that reduced data center costs by 822 million yen YoY.
  • Gross profit margin improved sharply from 55.5% YoY to 72.9%; operating profit increased to 1.421 billion yen from 300 million yen YoY, with total cost ratio falling to 82.1% of revenue.
  • Total customer IDs are approaching 1.2 million, with a recurring revenue ratio of 96.6%, an all-time high that supports a stable revenue base.
  • Headcount continues to grow by ~100 employees annually, aligned with the company's "people-centric management" and human capital investment strategy.

• Corporate Vision and Mid-term Strategy

  • The long-term vision is to become the top industry DtoD (Digital to Digital) platform company, expanding the successful FOOD business model to 3-5 additional industries over time, with an ultimate goal of covering hundreds of industries.
  • Mid-term priority: maintain sustained revenue and profit growth, return to high profitability after a multi-year period of strategic investment.

• FOOD Business Strategic Priorities

  • Expand market share further: penetrate the underpenetrated food seller side (current penetration is under 10%) to grow the user base.
  • Develop complementary services beyond the core platform, such as expense settlement and AI automatic ordering; actively pursue capital alliances and M&A to accelerate development instead of building all capabilities in-house.
  • Leverage accumulated transaction data to deliver advanced management consulting services, such as promotion and procurement cost analysis, to improve customer value.

• ES Business and New Industry Expansion

  • Focus on vertical expansion into the construction industry as the next core market after food, with BtoB Platform TRADE growing rapidly, adding 52 paid customers in the quarter to reach 350 total.
  • Document and systematize industry expansion know-how to replicate successful entry to new industries more efficiently.
  • Continue developing Fintech services via partnerships (early payment with GMO, credit settlement with Money Forward) to leverage 60-70 trillion yen in annual transaction data for new revenue streams.

• Shareholder Return

  • Maintains the long-standing 50% payout ratio policy; the planned full-year dividend of 4.46 yen per share remains on track.

1. FOOD Business: Revenue of 5.7 billion yen (63.3% of total consolidated revenue), 30% YoY growth. Key services: BtoB Platform Ordering grew 36.7% YoY, BtoB Platform Ordering Light and TANOMU grew 31.6% YoY. The segment maintains steady profitability and consistent growth. It has reached 60% penetration among Japanese chain restaurant buyers and 60% among food supplier sellers, with gross transaction value of 711.9 billion yen in the quarter, on track to exceed 2.9 trillion yen for the full year.
2. ES (Enterprise Solution) Business: Revenue of 3.2 billion yen (35.6% of total consolidated revenue), 17% YoY growth. Key services: BtoB Platform Invoice grew 19% YoY (accounting for 80% of ES segment revenue), BtoB Platform TRADE grew 50% YoY, expanding from 38 million yen to 103 million yen YoY. The segment achieved its first net profit in the first half: after a 45 million yen first quarter deficit, it posted a 76 million yen second quarter profit, resulting in a net 31 million yen profit for the first half, marking a successful turnaround to profitability.

• Full year 2025 guidance is maintained unchanged from the original plan: full year revenue of 19.491 billion yen (24.7% YoY growth), with first half progress at 46.2% of target, in line with expectations.
• Full year operating profit guidance is maintained at 2.3 billion yen (91.6% YoY growth); first half operating profit already reached 1.42 billion yen (61.7% of full year target), and management confirms there is sufficient confidence to achieve the full year target, compared to the more cautious framing at the start of the year.
• The full year cost structure plan is maintained: data center costs are expected to be 1 billion yen lower than last year, while selling, general and administrative expenses will increase as planned to support growth, resulting in the projected 2.3 billion yen operating profit.
• New industry expansion guidance: the company aims to mature each new industry within 5-10 years (far faster than the 20+ years it took to develop the FOOD business), and will pursue expansion of multiple industries in parallel rather than sequential development.

The transcript does not explicitly discuss material operational risks, market risks, or operational failures. The only uncertainty noted is that long-term industry expansion timelines and profit projections are inherently difficult to forecast accurately given the large scope of the long-term vision.

Q: What is the timeline and expected profit size for expanding 3-5 new industries to the same scale as the existing FOOD business?

A: Management expects each mature new industry to reach at least the same revenue scale as FOOD, which is currently ~10 billion yen and expected to grow to 10-20 billion yen long-term. Many target industries are larger than food, so revenue could exceed this base. Profit margins are expected to be higher than the current FOOD business, as the company no longer needs to price at a steep discount to build market share like it did in its early days. The company aims to mature each new industry in 5-10 years (far faster than the 20+ years for FOOD) and will expand multiple industries in parallel, rather than one at a time.