Money Forward,Inc. Q2 FY2025 earnings call

Business Development

• Secured new ongoing contracts for government agency clients and grew contracts for private sector solution services, significantly expanding the project pipeline. Added a new 260 million yen SAR data procurement contract from Japan's Ministry of Defense Information Headquarters to the pipeline, with approximately 150 million yen expected to be recognized as revenue this fiscal year, in line with original projections.
• The large-scale 280+ billion yen Ministry of Defense satellite constellation program has started public bidding, with award results expected by the end of 2025 and contract execution scheduled for February 2026; Synspective is advancing alliance and bid preparations. Synspective was selected for the 16.46 billion yen Japan Space Strategy Fund, with subsidies to be disbursed starting in the second half of 2025, which will fund constellation construction, mass production setup, next-generation technology development (onboard data processing, inter-satellite communication, InSAR analysis), and capability building for defense and disaster response demand.
• Two US local subsidiaries have been established and began operations. Synspective signed a subcontract with the software division of NV5 Global (a public company that holds contracts with the US Space Force) as a SAR data supplier for the winning prime contractor of the US NGA Luno program. Synspective became the first Japanese private company to register on the US Space Force's satellite data marketplace, and the CEO participated in the GEOINT Symposium panel discussion to build brand recognition in the US market.
• Launched a new security-focused AI analytics solution in partnership with Polish AI firm SATIM that can detect, classify, and identify aircraft and vessels from SAR imagery, and is actively marketing this solution to governments globally.

Satellite Technology and Disaster Response

• Currently operates 4 StriX SAR satellites in orbit, with 2 additional satellites scheduled for launch by the end of 2025. Synspective has developed a new InSAR dDEM analysis technology that can observe both millimeter-scale and meter-scale terrain changes (a capability not available with traditional InSAR), enabling broader change detection, terrain mapping, and terrain data generation for unmapped areas; this technology is currently patent-pending.
• Provided SAR data and analysis for multiple 2025 disaster events including the Shinmoedake eruption, Kamchatka earthquake tsunami impact, and Kumamoto floods and earthquakes for Japanese government agencies.

Manufacturing Expansion

• The Yamato Technology Center small SAR satellite mass production factory currently operates with an annual capacity of 8 units, and is transitioning to an annual capacity of 12 units by the end of 2026 to support the Ministry of Defense program. The factory is shifting focus from individual satellite performance improvement to repeatable mass production with consistent quality: it is building manufacturing process data collection infrastructure to enable future AI-powered quality control and traceability that links in-orbit satellite performance data back to manufacturing processes to enable continuous improvement, and it operates an in-factory skills transfer "dojo" to pass veteran manufacturing expertise to new young hires.

Financing

• Synspective is progressing with a new share warrant issuance for capital raising. 16.24 billion yen is earmarked for capital expenditure, and 7.78 billion yen for working capital. As of the end of June 2025, Synspective holds 11.1 billion yen in cash, has 9.7 billion yen in undrawn loan commitments, and 20.6 billion yen in confirmed subsidies from public funds. The new capital raising will support expenditures through the end of 2027, improve financial stability, and enable future debt financing.

Synspective does not break out performance into distinct product segments in this call. Cumulative total revenue for the first half of fiscal 2025 is 1.36 billion yen, representing over 30% year-over-year growth. Operating loss widened in line with planned upfront investment for satellite constellation construction. The year-to-date revenue progress rate against full-year guidance is 57.2%, while the progress rate for combined total revenue (operating revenue plus subsidy income) is 22.4% because most subsidy revenue will be recognized in the second half of the year. As of the end of the second quarter, the backlog reached 21.77 billion yen, an increase of 16.41 billion yen compared to the end of the previous fiscal year. Domestic government agencies account for approximately 75% of the full-year revenue outlook, and almost all of this revenue is already under contract.

• Full-year 2025 December fiscal year guidance is maintained unchanged from the previous announcement. Performance is tracking in line with original expectations, with revenue progress on schedule and subsidy revenue weighted to the second half of the year. The 16.46 billion yen Space Strategy Fund is progressing as planned, with the majority of subsidy revenue to be recognized in the fourth quarter.

• Global launch capacity supply remains tight, and securing rocket access is becoming a key operational constraint for satellite deployment. US export control regulations (ITAR) create uncertainty for European government clients relying on US-based SAR suppliers, but this works to Synspective's advantage as an ITAR-free Japanese-based supplier.

Q: How will the July 2025 acquisition of Capella Space by IonQ change the competitive environment in the US SAR satellite market? / A: IonQ is aiming to build a secure quantum communication cloud network in orbit, and acquired Capella Space for its inter-satellite communication testing experience and satellite constellation control expertise to advance this goal. This acquisition aligns with the US military's broader push to develop the Golden Dome integrated defense system, which relies on an in-orbit satellite network for missile defense and battlefield communications. The US National Reconnaissance Office recently announced budget cuts for all existing optical and SAR satellite data programs, but management views this as a budget reallocation to new security programs like Golden Dome rather than a pure reduction, putting the US SAR industry at a key turning point. Synspective has an advantage over US-based players because the Japanese government is its anchor customer, allowing it to grow from a stable domestic base while expanding in the US. (319 characters)

Q: What is Synspective's plan for European expansion, particularly in light of active competition from ICEYE? / A: Synspective uses a local partnership approach similar to its US strategy, working with established local partners that already hold government contracts. It is currently in advanced discussions with 2-3 major local players after completing data evaluation. Synspective is also pursuing participation in European Space Agency programs like Copernicus and engaging directly with NATO and individual European government agencies. Both Synspective and ICEYE position themselves as ITAR-free, which is attractive to European governments that face uncertainty around US export restrictions. European governments also want multiple SAR data suppliers to avoid over-reliance on a single vendor, which creates an opportunity for Synspective given current overall supply shortages, and the company is actively building relationships in the market today. (441 characters)

Q: Is there an opportunity for Synspective SAR satellites to participate in the US Golden Dome project? / A: The core of Golden Dome is a space-based sensor network for early detection of hypersonic missiles, so there will very likely be demand for SAR data as part of the program. It is still too early for Synspective to engage with the program directly, but the company is building its presence and partnerships in the US market to position itself for future opportunities that arise. (207 characters)