FINDEX Inc. Q3 FY2025 earnings call

• Company Overview & Core Strengths

  • Findex is a Tokyo Stock Exchange Prime-listed developer of medical software, cloud services, and medical devices, founded in 1985 with 330 consolidated employees. Over half of employees are engineers with deep healthcare and public sector expertise, and the company uses an agent-based sales model to keep costs low and maintain high profit margins.
  • The company holds an 80% product adoption rate among Japanese university hospitals, which provides a strong referral pipeline for sales to other medical facilities. All products are developed in-house.

• 2030 Long-Term Strategy

  • Medical Business: Shift focus from traditional on-premise hospital systems to cloud-based medical data linkage and real-world data (RWD) utilization. Accelerate rollout of AI-powered services for medical documentation and clinical data analysis, building a new high-margin, scalable growth engine alongside the stable core business.
  • Public Business: Expand nationwide through a broader agent network, add AI-powered document management features, and leverage government subsidy programs to drive adoption of DocuMaker Office, targeting stable growth and high profitability in the regional government DX market.
  • Healthtech Business: Commercialize an MCI (mild cognitive impairment) detection device based on GAP's gaze analysis technology within 2 years via a joint research project with Kyoto University, and expand global sales of GAP to build a new long-term high-margin growth driver.

• Key Operational Updates Q1-Q3 FY2025

  • Medical: Launched the PiCls Connect inter-hospital medical data sharing service in October 2025, with ongoing national expansion following successful initial operation at Chiba University Hospital. The number of medical system client facilities grew to 2,215, and average product installations per large hospital increased to 4.67.
  • Public: Won its first contract in Tokyo's 23 wards (for Itabashi Ward's document management system), marking a key milestone for capital region expansion. Added 15 new local government and 4 new medical institution clients for DocuMaker Office, bringing cumulative public sector installations to 54.
  • Healthtech: Shipped 50 units of GAP to overseas markets via partner Rexam, with South America accounting for over half of international shipments. Launched a new medical data platform business after obtaining Cabinet Office authorization as a certified medical information handling provider, to build a new revenue pillar from RWD utilization.

• Regulatory & Industry Tailwinds

  • Findex provides HPKI cloud signature services for Japan's national electronic prescription program, which launched commercially in April 2025, and provides free access to DocuMaker Cloud functionality for the national electronic medical record information sharing initiative, positioning it to benefit from ongoing national medical DX expansion.

For the first three quarters of FY2025 (ending December 2025):

1. Medical Business: Revenue was 4.016 billion yen, a 1.7% year-over-year decrease, representing 91.9% of total cumulative revenue. Operating profit was 1.218 billion yen, a 1.5% year-over-year increase. It is 72.4% of the way to its full-year revenue plan of 5.55 billion yen. Within medical business product sales, the Claio series of imaging filing systems accounts for 35% of revenue, followed by maintenance services at 30%.
2. Public Business: Revenue was 295 million yen, a 49.8% year-over-year increase, representing 6.7% of total cumulative revenue. Operating profit was 114 million yen, a 92.1% year-over-year increase. It is 79.4% of the way to its full-year revenue plan of 372 million yen. Recurring monthly subscription revenue reached 38 million yen, and total users of DocuMaker Office grew to 48,348 people.
3. Healthtech Business: Revenue was 62 million yen, a 137.5% year-over-year increase, representing 1.4% of total cumulative revenue. It posted an operating loss of 136 million yen, up slightly from a 132 million yen loss year-over-year. It is 61.9% of the way to its full-year revenue plan of 100 million yen. Cumulative total shipments of the GAP visual field analyzer exceeded 200 units, with 57 units sold in the current fiscal year to date.

• Management maintained the original full-year FY2025 guidance announced at the start of the fiscal year, with no upward or downward revisions.
• Full-year consolidated guidance is: total revenue of 6.022 billion yen (3.1% year-over-year growth), operating profit of 1.465 billion yen (4.0% year-over-year decline), ordinary profit of 1.515 billion yen (1.9% year-over-year decline), and net income attributable to parent shareholders of 1.108 billion yen (4.7% year-over-year decline).
• Segment-level full-year revenue guidance is unchanged: Medical Business 5.55 billion yen (1.0% YoY growth), Public Business 372 million yen (28.5% YoY growth), Healthtech Business 100 million yen (75.8% YoY growth).
• Management notes the full-year guidance is set conservatively, and does not include potential contributions from new segment business initiatives as of the current update.
• The annual dividend forecast is maintained at 17.0 yen per share, a 2.0 yen increase year-over-year, with an expected payout ratio of approximately 40%. The company is also executing a share repurchase program of up to 1 billion yen or 1.333 million shares (5.19% of outstanding shares).

• Healthtech Business is currently in an investment-heavy early growth stage, and has posted consecutive operating losses as the company invests in R&D for new product features (contrast sensitivity testing, MCI detection) and expands global regulatory approval and sales channels. There is no guarantee that the segment will achieve profitability on the expected timeline.
• Public Business growth depends on continued government policy support for regional DX and the willingness of local governments to allocate budget to digital transformation projects. Small and medium-sized local governments still face barriers of limited specialized IT personnel and budget constraints that could slow adoption of DocuMaker Office.
• Medical Business growth depends on the continued expansion of national medical DX initiatives including electronic prescriptions and medical data utilization; slower-than-expected adoption of these initiatives could limit revenue growth for the company's related services.
• The Healthtech Business recorded a 14 million yen raw material valuation loss in Q1-Q3 FY2025, and ongoing supply chain volatility could create further cost pressures for the segment's medical device manufacturing operations.

No question and answer section was included in the provided transcript.