toridori Inc. Q4 FY2024 earnings call

• Core Business and KPI Updates

  • Core service toridori base reached 7,131 client companies (YoY +21.4%, +1,256 companies from prior year) and 71,000 registered influencers (+9,700 from prior year), with average customer ARPU stable around 100 thousand yen.
  • Launched 12-month long-term plans for toridori base in H2 2024; over 30% of new Q4 2024 clients opted for the long-term plan, with revenue impact expected to materialize starting 2025. Strengthened operations support team at the Niigata hub to scale for future client growth.
  • Completed the transfer of XiM's toridori base sales team to the newly established Toridori IS, and improved the ratio of advertising and promotion expenses.

• Competitive Advantage: Influencer Database

  • Holds Japan's largest influencer database with 71,000 registered influencers and 820,000 cumulative matching cases, with unique credit scoring for optimized matching and coverage across all industry categories.
  • Will expand data volume, add new metrics, strengthen machine learning analytics, and release new features including pre-campaign engagement prediction, enhanced reach/impression visualization, and dynamic influencer pricing starting January 2025.
  • Expanded the development team with experienced product and tech leads to accelerate database enhancement.

• Product Segment Growth Strategy

  • Will evolve toridori base to address differentiated needs of brick-and-mortar store operators and EC operators: expand local influencer recruitment and add a direct offer feature for unregistered influencers to fix regional supply gaps; enhance effect reporting and add customer success support to improve retention for brick-and-mortar clients; launch a new purchase tracking product leveraging niks' performance advertising expertise to improve ROI transparency for EC clients.
  • Target to grow toridori base clients to 15,000 by 2027 (12,000 brick-and-mortar, 3,000 EC), with product segment gross profit target of 6.9 billion yen by 2027.

• Marketing Partner Segment Growth Strategy

  • Expanded capabilities via M&A: added OverFlow (2023), niks (2024), and blends (2024) to the group, enabling end-to-end full-service marketing support for mid-to-large clients beyond just influencer casting.
  • Growth priorities: continue exploring M&A for capability expansion, drive cross-group synergy to create integrated cross-functional marketing projects, and leverage the influencer database for data-driven marketing strategy optimization.
  • Target marketing partner segment gross profit of 2.3 billion yen by 2027.

• Corporate Policy

  • Maintains a balance between growth investment, financial soundness, and shareholder returns; prioritizes growth investment in talent, marketing, and M&A, targets 20% ROE, keeps borrowing capacity available, and has established a flexible shareholder return framework after 2023 capital reduction.

1. Product Segment: Gross profit of 709 million yen (YoY +20.2%), accounts for 65.8% of total segment gross profit, and is the core growth driver of the company. Its core service toridori base achieved the same 709 million yen gross profit with 20.2% YoY growth. 2. Marketing Partner Segment: Gross profit of 367 million yen (YoY +12.7%), accounts for 34.2% of total segment gross profit. By service: toridori ad (performance-based advertising) gross profit 149 million yen (YoY +39.0%), supported by solid micro-influencer performance advertising business at niks; toridori promotion (tie-up advertising) gross profit 82 million yen (YoY -29.8%), due to longer lead times from larger-sized projects delaying profit recognition.

• 2025 December Fiscal Year (first year of the mid-term plan): Targets 30% YoY growth for both revenue and gross profit, with planned targets: 5.6 billion yen revenue, 5.1 billion yen gross profit, 750 million yen operating profit, 700 million yen ordinary profit, and 400 million yen net profit attributable to parent shareholders. Approximately 200 million yen in product segment investment is planned for product updates, new product marketing, and team expansion.
  • Quarterly performance expectation for 2025: Following historical patterns, revenue will be heavily concentrated in H2 2025. Q1 2025 is expected to see lower toridori made sales due to Chinese New Year factory shutdowns at OEM suppliers, with accelerated growth expected from Q2 2025 driven by 2024-launched long-term toridori base plans.
  • 2027 December Fiscal Year mid-term targets: 10 billion yen total revenue, 2 billion yen operating profit, 20% operating margin, with 32.8% CAGR for revenue and 33% CAGR for gross profit from 2024 to 2027. Product segment targets 37.2% CAGR, Marketing Partner segment targets 22.8% CAGR, for a total 9.2 billion yen group gross profit by 2027.
  • Long-term direction beyond 2027: Will evaluate expansion into new areas including inbound marketing, overseas product expansion, and HR services leveraging accumulated influencer and matching data.

• Current product limitations: Single product offering could not meet the diversifying needs of different client segments; regional gaps in local influencer supply for brick-and-mortar clients; limited effect visibility for brick-and-mortar client visit outcomes that reduces retention; unclear ROI measurement for EC client influencer campaigns.
• Longer lead times for larger tie-up advertising projects have delayed near-term profit recognition for toridori promotion.
• Seasonal risk: Business is heavily weighted to H2 performance, and Q1 sales are negatively impacted by seasonal factory shutdowns in China for toridori made.

No Q&A section was included in the provided transcript.