GMO internet (9449) Q1 2025 earnings summary

Executive summary

• Transitioned to a near pure holding company structure in January 2025, spinning off Internet Security as a new segment and transferring infrastructure and advertising/media businesses to a new entity.

• Achieved record-high quarterly operating profit in Q1 FY2025 (excluding VC investment gains/losses), driven by strong recurring revenue from infrastructure despite upfront investments.

• Net sales rose 3.9% year-over-year to JPY 71.5B, with operating profit up 0.9% to JPY 14.5B and net profit stable at JPY 5.5B.

• Security business established as an independent segment and core strategic focus, with new products and initiatives launched.

• Segment structure revised, with partial sale of subsidiary reducing ownership from 98.3% to 64.8%, but subsidiary remains central.

Financial highlights

• Posted all-time high quarterly sales and operating profit, led by infrastructure segment; net sales JPY 71.5B (+3.9% YoY), operating profit JPY 14.5B (+0.9% YoY), net profit JPY 5.5B (+0.1% YoY).

• Ordinary profit declined 12.9% YoY to JPY 13.5B; comprehensive income dropped 67.0% YoY to JPY 4.08B.

• Dividend for the quarter set at JPY 17.6 per share.

• Share buyback program on track, with JPY 7.9B spent and 2.65M shares acquired as of April 2025 (target: up to JPY 10B, 4.6M shares).

• Shareholders’ equity ratio stable at 4.1%.

Outlook and guidance

• Infrastructure and security recurring revenues expected to drive consistent growth as data and transaction volumes rise.

• Security positioned as a mid-to-long-term growth engine, with new products and services rolling out through 2025 and beyond.

• No consolidated results or dividend forecast disclosed for FY2025 due to market volatility in finance, crypto, and incubation businesses.

• Guidance subject to risks from global economy, competition, FX, and crypto market volatility.

• Continued focus on expanding customer base in crypto and finance segments while maintaining operational stability.