THECOO Inc. Q4 FY2024 earnings call

• Company Overview

  • Founded in January 2014, listed on the Tokyo Stock Exchange Growth market in December 2021, with approximately 130 employees operating two core businesses. The company mission is to continuously challenge the "impossible" to create new value and drive social change.
  • The Fan Business Platform operates the closed, membership-only fan community app Fanicon, where creators (called icons) can launch fan clubs, and fans pay monthly membership fees and purchase points for content/services, with THECOO taking a revenue share. The fully paid closed membership model preserves core fan engagement, creates stable recurring revenue, and enables high-engagement two-way communication between creators and fans.
  • The Digital Marketing segment offers end-to-end influencer marketing services and digital advertising consulting for brands, earning fees and margins from advertisers, supported by an internal database of over 330,000 influencer profiles.

• 2024 Fiscal Year Strategic Progress

  • Fan Business Platform: A new Sales & Marketing division was launched to accelerate new creator and fan acquisition, which drove successful growth in sports and South Korean creator partnerships. Infrastructure was significantly upgraded to handle increased system load from growing user numbers, improving service stability.
  • Digital Marketing Segment: Internal division of labor was implemented to let employees leverage their individual strengths; the company focused on client proposals that leverage its unique internal influencer data asset to increase customer value.
  • Company-wide: THECOO continued to strengthen internal controls and improve forecast-actual management. Strict expense control reduced selling, general and administrative (SG&A) expenses 7.4% YoY, beating initial planned expense reduction targets. The company also prioritizes diversity and inclusion, with over 10 nationalities represented in the workforce, and non-Japanese employees making up 13.7% of total staff.

• Q4 2024 Operational Highlights

  • Fan Business Platform: South Korean expansion accelerated, with an increase in new community launches by South Korean artists and actors, and increased coverage in major South Korean media. Point-based sales grew strongly in December 2024.
  • Digital Marketing Segment: THECOO published an original independent market survey on brand image impact in influencer PR posts, and will continue producing similar research to add value for clients.

1. Fan Business Platform Segment (growth business):

• Full year 2024: Revenue increased 17.0% year-over-year; achieved full year operating profit (net growth of 394 million yen in profit YoY). Q4 2024 revenue was 939 million yen, up 21.0% YoY, with Q4 operating profit of 103 million yen. This segment contributed approximately 76.3% of total full year company revenue.
• Key KPIs: As of Q4 2024, icon (content creator) count reached 3,200, up 13.1% YoY; total fan count reached 345,000, up 25.5% YoY; gross merchandise value (GMV) increased 22.6% YoY. ARPU is declining due to growth in fee-only OEM app partnerships, which is an expected trend.

1. Digital Marketing Segment (core business):

• Full year 2024: Revenue increased 5.7% year-over-year; operating loss improved by 81 million yen YoY. Q4 2024 revenue was 291 million yen, up 9.2% YoY, with Q4 operating loss of 20 million yen (a 34 million yen improvement YoY). This segment contributed approximately 23.7% of total full year company revenue.
• Key KPIs: Influencer sales project volume increased 7.2% YoY in Q4 2024; full year influencer sales project volume increased 16.4% YoY.

• For the full year 2025 (ending December 2025), THECOO targets total company revenue of 4.76 billion yen, representing 9.9% year-over-year growth, and maintains a target 39.22% compound annual growth rate for total revenue.
• The company expects increased expenses from planned talent investment, higher development costs, and general inflation, but aims to control overall SG&A expenses to achieve full year company-wide operating profit of 2 million yen, which would be the first full year of company-wide net profit.
• For the Digital Marketing segment, 2025 strategic priorities include discovering new influencers, expanding influencer networks, creating more added value for clients, and driving profit improvement.
• For the Fan Business Platform segment, 2025 strategic priorities include focusing on acquiring large (high-follower) creators to further grow total fan count, revising the cost structure to drive further profit improvement.

No explicit risk or operational failure discussion was included in the released transcript provided.

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