INFORICH INC. Q1 FY2025 earnings call

• Overall Financial Performance

  • Consolidated revenue grew 44% year-over-year, EBITDA grew 119% year-over-year to 774 million yen, and operating profit grew 114% year-over-year to 267 million yen. Even excluding sales contributions from three completed M&As last year, organic growth still reached 20%. Gross margin hit 77% and operating margin hit 9%, with margin improvement achieved year-over-year.
  • Overall results were broadly within management expectations, though revenue was slightly lower than forecast due to seasonal impacts.

• Global Expansion Milestones

  • Global total installed stands reached 72,000 units. Domestic ChargeSPOT installed units exceeded 50,000 in Japan, and Taiwan exceeded 10,000 units. A partnership agreement was signed with THUN to prepare for the launch of operations in Italy.
  • Post-M&A integration progress: Australia's Ezycharge is scheduled to complete replacement of all stands and batteries with INFORICH's own versions within this fiscal year; Taiwan's business was fully acquired last year, now generates stable profit with very high EBITDA margin, serving as a best practice for global expansion; newly acquired Trim (operator of baby care room mamaro) exceeded 800 cumulative installed units, with similar installation locations to ChargeSPOT enabling future synergies in expansion and cost reduction.

• Operational & Key KPI Update

  • Monthly active users averaged 1.41 million, with 19.5 MAU per stand, continuing a steady growth trend, though quarter-over-quarter growth was slightly weak due to multiple temporary factors. Monthly total rentals reached 2.56 million, with average 1.8 rentals per user, a stable level that has remained unchanged for years.
  • Per-stand operating profit for Japan-only operations doubled year-over-year from 4,500 yen to approximately 9,000 yen, demonstrating solid cost control.

• Operational Updates on New Businesses

  • CheerSPOT, an artist support advertising platform launched last December, has expanded its content scope to include sports, with growing user awareness and early-stage engagement from fan communities.
  • mamaro, the private locked baby care room, has been installed in commercial facilities, stations, and local government locations, with cumulative usage exceeding 1.3 million times.

• Organizational Restructuring

  • A new management system launched in April: the current Group CEO oversees global expansion focusing on new European and Southeast Asian markets, while a dedicated Japan CEO leads domestic business operations. The executive team expanded from 6 to 11 members, and a new independent outside director with expertise in marketing and microeconomics joined to provide academic insights for business strategy.

This quarter, total consolidated sales reached 3 billion yen. 1. Domestic ChargeSPOT: 2.1 billion yen in revenue, accounting for 70% of total consolidated revenue. It has entered a stable profitability phase, generating consistent cash flow. 2. Overseas ChargeSPOT: 750 million yen in revenue, accounting for 25% of total consolidated revenue, is still in the upfront investment phase of global expansion, with rapidly growing connected sales from consolidated subsidiaries. 3. Platform segment: 133 million yen in revenue, including 100 million yen in revenue contribution from newly consolidated Trim this period. This segment focuses on expanding value-added services on the existing station network and has strong new business attributes.

• Management maintains the annual installed target of 9,000 new stands, with 2,843 new units installed in 1Q, on track to meet the full-year goal.
• No formal full-year financial guidance revision was announced; management confirmed it will address the slight slowdown in domestic user acquisition with targeted measures and continues to target full-year growth.

• Seasonal and macro external risks: Q1 typically faces seasonal headwinds from cold weather and fewer operating days, and this quarter's weak foot traffic due to bad weather further suppressed new user acquisition and rental demand.
• Unhedged foreign exchange risk: INFORICH does not currently use foreign exchange hedging for loans to overseas subsidiaries, and recent yen appreciation caused foreign exchange losses that pulled down current profit. Management has begun evaluating the introduction of hedging in the future.
• Growth driver transition risk: The company's historical growth has been mainly driven by installed capacity expansion, but this driver will eventually mature. Management acknowledges the need to develop new growth drivers such as increasing usage frequency, but these strategies are still under development.
• Pricing risk: Previous price increases have improved average revenue per rental, but may have had a negative impact on new user acquisition especially among younger consumers.

Q: What are the causes of the recent slowdown in new domestic ChargeSPOT user acquisition, and what strategic adjustments will be made to reaccelerate growth?

A: The slowdown is largely driven by temporary factors: Q1 had bad weather that reduced foot traffic, which has a high correlation with rental activity and new user acquisition. Expanding installed capacity also temporarily puts near-term pressure on per-stand new user acquisition. Management notes that there is still large untapped potential user base, and will shift to more targeted, scenario-based marketing to drive new user growth, moving beyond relying solely on organic growth from installed capacity expansion.

Q: What strategies will the company implement to increase average monthly rentals per user from the current 1.8 to higher levels, and will there be segment-specific approaches for different user groups?

A: The core challenge is getting users to interact with ChargeSPOT when they do not need a battery. The company is building a broader platform starting from the core battery sharing service, adding offerings like CheerSPOT to create more reasons for users to open the app and visit stands. Management is focusing on scenario-based recall marketing, such as reminding users to prepare ChargeSPOT before travel, events, or sightseeing, to create additional rental demand beyond emergency usage, with internal discussions ongoing to refine these strategies.

Q: How is the company progressing on its global installation strategy, and what is management's view on improving utilization rate going forward?

A: (Summary) Global expansion is accelerating, with milestone installations in Japan and Taiwan achieved, and preparations for Italy ongoing. The company leverages its unified brand to expand into new markets via existing Japanese retail chains, creating natural expansion synergies. Management emphasizes that the network effect of more installations improves convenience and drives organic utilization growth, and will continue to optimize location selection to improve per-stand utilization as it expands capacity.