INFORICH INC. Q4 FY2024 earnings call

Core Growth Strategy

• INFORICH's long-term core goal is maximizing long-term free cash flow (EBITDA), maintained by sustained high revenue growth. The business is structured around three core segments: ChargeSPOT Domestic, ChargeSPOT Overseas, and Platform.
• Growth is driven by solid performance of the domestic ChargeSPOT business, with generated free cash flow reinvested into global expansion.

Domestic ChargeSPOT Operational Highlights

• Added 4,891 new domestic locations in FY2024, reaching a total of 47,330 domestic locations, hitting the full-year installation target. Monthly rentals grew 23% YoY in December 2024, and full-year rentals grew 28% YoY. Domestic monthly active users surpassed 1 million, with total group MAU reaching 1.5 million.
• Developed and deployed an outdoor vending machine model that enables installation in previously inaccessible high-traffic locations, with 4 initial units deployed and major beverage partners including Asahi Beverage on board. 2,000 total domestic vending machine model installations are targeted for FY2025.
• Improved Lightning cable internal design to reduce failure rates, cutting battery impairment losses by nearly 80% compared to 1Q FY2024.
• Launched an AI chatbot for customer support that now resolves 50% of common inquiries, reducing operator costs while maintaining high user satisfaction.
• Expanded freelancer-based rounder service (for resolving battery distribution imbalance) coverage to 393 municipalities, with approximately 3,700 active monthly workers.
• Adjusted the minimum pricing back to 165 yen for under 30 minutes in response to user feedback (especially from students) after switching to a 330 yen per hour minimum in 2023; pricing changes and a planned新生活 season campaign are already incorporated into FY2025 guidance.

Overseas Expansion Highlights

• Completed three major M&A transactions in FY2024: acquired a controlling stake in Ezycharge (Australia, >90% market share for shared mobile charging), 100% of the former Taiwan franchise Digital, and a stake in Trim (operator of mamaro baby care rooms).
• Launched franchise operations in Macau (150 units installed), and started 7-Eleven installations in Thailand and Singapore with growing unit counts. Added Australia and Macau to the operating footprint, converted Taiwan to direct operation, established a UK subsidiary, and prepared for entry into Italy.

New Business & Platform Operational Highlights

• Launched CheerSPOT, a fan-focused digital service, in December 2024 with 6 participating artists and an ongoing initial free promotion, and already secured a collaboration with a popular TV program.
• Expanded platform service offerings with the addition of the mamaro baby care room business.

For FY2024 full year consolidated results: total revenue was 10.701 billion yen, up 39% YoY, with EBITDA of 2.963 billion yen, up 110% YoY. In 4Q FY2024: total revenue was 3.227 billion yen, up 41% YoY, EBITDA was 1.023 billion yen, up 80% YoY. Segment breakdown (4Q FY2024): 1. ChargeSPOT Domestic Rental: 35% YoY revenue growth, supported by July 2024 price adjustment; domestic advertising was in a preparation phase with no material revenue contribution in FY2024. 2. ChargeSPOT Overseas Rental: strong YoY growth driven by M&A of Ezycharge (Australia) and Digital (Taiwan); franchise sales/royalty revenue decreased due to the conversion of the Taiwan franchise to a wholly-owned subsidiary, while franchise revenue from Thailand and Singapore grew steadily. The acquired Taiwan subsidiary delivered a near-60% 4Q EBITDA margin and near-50% full-year EBITDA margin, and Ezycharge Australia saw a 50% quarter-over-quarter rental volume increase in 4Q. 3. Platform: New service CheerSPOT launched in 4Q with an ongoing free promotional campaign, so it contributed no revenue in the quarter; mamaro (baby care room service) was added via acquisition of Trim in FY2024.

• For FY2025 full year, INFORICH guides 15.647 billion yen in total revenue (46% YoY growth), 4.436 billion yen in EBITDA (50% YoY growth), and 2.314 billion yen in operating profit (39% YoY growth). Growth is expected to progress steadily through the year, with momentum building toward the end of the fiscal year.
• Segment-specific FY2025 revenue guidance breakdown: ChargeSPOT Domestic 11.0 billion yen, ChargeSPOT Overseas 3.5 billion yen, Platform 1.0 billion yen. The FY2025 guidance fully incorporates all announced changes (price adjustment, Italy expansion investment, office relocation costs) already.
• ChargeSPOT Domestic guidance: Management targets continued accelerated installation growth, expansion of the ChargeSPOT Pass subscription plan to grow user count, with the vending machine model as a core priority. Management estimates domestic serviceable available market (SOM) at 25.87 million users, with only 4.75 million yearly active users in 2024, leaving substantial remaining growth headroom. Even among 10s-20s, ~40% of users are still unaware of the service, supporting continued long-term growth.
• ChargeSPOT Overseas guidance: Management will accelerate pre-revenue investment in new markets to build future free cash flow sources, while testing optimal entry strategies for high-potential markets and upgrading global governance and operations. For the new Italy direct operation entry: 2,000 initial installations are targeted for the first year in partnership with local leading firm THUN, the first two years are classified as an investment period with expected negative EBITDA impact, and material contribution to group results is targeted from FY2027.
• Platform guidance: A dedicated advertising sales team will be launched, with connections to external DSP/SSP platforms to grow corporate advertising inventory sales. CheerSPOT will continue expanding artist partnerships and promotional activity, with material sales growth expected from the second half of FY2025. mamaro business growth is also a core priority.
• Capital policy: All available cash will be allocated to business investment including M&A: domestic investment will continue, and free cash flow generated domestically will be reinvested into overseas market expansion to grow long-term EBITDA. No changes to the existing medium-term strategic plan are required, and the core capital allocation strategy is maintained.

• Early-stage investment in new overseas markets (such as Italy) will create near-term downward pressure on group EBITDA, though this is fully incorporated into FY2025 guidance.
• New services like CheerSPOT are early-stage unproven market opportunities, requiring continued trial-and-error and product iteration, with no guarantee of achieving projected growth targets.
• Tariff changes from global political shifts (such as new US trade policies) could impact hardware manufacturing costs, though management has already diversified manufacturing beyond China to mitigate supply chain risk.
• M&A activity generates goodwill and intangible asset amortization that creates a gap between EBITDA and operating profit growth, impacting reported net income even as core operating performance grows.

Q: How will global environmental changes (including Trump's second US presidency) impact INFORICH's expansion direction, and where does management see new demand emerging? / A: Management notes INFORICH's core strength is its existing global business network, which enabled the Italy entry via existing connections. The company will continue prioritizing global expansion, viewing any market with demand for mobile charging as a target market rather than focusing solely on Japan or Asia. Regarding potential tariff impacts from US policy changes, management has already diversified hardware manufacturing away from China for business continuity purposes, so no material positive or negative impact on current operations is expected at this time.

Q: Why did INFORICH choose direct operation rather than franchise for the new Italy entry? / A: The decision was driven by the ability to accelerate expansion speed. INFORICH uses multiple entry models depending on market conditions: M&A is preferred when an established local player already exists (as in Australia), while franchise requires aligning with the local partner's growth speed. For Italy, management secured a strong local partner with high market recognition and extensive location connections, so direct operation allowed the fastest possible expansion to reach 2,000 initial installations in the first year.

Q: What is the contribution of mamaro to FY2025 Platform segment EBITDA, and what is the long-term outlook for CheerSPOT's 2030 financials? / A: mamaro is projected to generate approximately 0.2 billion yen in EBITDA for FY2025, with projected 2025 full revenue of 0.68 billion yen. For CheerSPOT, it is a new early-stage market that INFORICH is still developing, so no 2030 financial targets are available. Management maintains the existing target of reaching 2-digit 100 million yen+ revenue by 2026, which the team is still pursuing via iterative product development. CheerSPOT leverages INFORICH's existing global network, creating potential for international expansion that management views as a long-term opportunity.

Q: Why does the EBITDA growth rate outpace operating profit growth, and what caused QoQ profit decline in 4Q despite revenue growth? / A: The gap between EBITDA and operating profit growth comes from amortization of goodwill and intangible assets generated from FY2024 M&A activity. The 4Q QoQ profit decline was driven by temporary one-time costs: increased marketing spending for domestic and regional marketing initiatives, M&A due diligence and brokerage fees, and amortization of acquired intangible assets in other selling, general and administrative expenses. There was no decline in underlying per-unit profitability for the core ChargeSPOT business.