GMO internet (9449) Q3 2024 earnings summary

Executive summary

• Net sales for the nine months ended September 30, 2024, rose 7.0% year-over-year to ¥206,104 million, with operating profit up 19.1% to ¥35,825 million and net profit attributable to owners of the parent up 6.0% to ¥10,208 million.

• Q3 FY2024 saw record net sales of JPY 69.6B, up 11.4% year-over-year, driven by strong infrastructure and improved internet finance profitability.

• Operating profit rose 24.8% YoY to JPY 11.8B, but ordinary and net profit declined due to foreign exchange impacts.

• Transition to a pure holding company structure effective January 1, 2025, to accelerate group management and synergies, with infrastructure and advertising businesses transferred to new entities.

• Acquired Flatt Security Inc., adding ¥1,627 million in goodwill; Flatt Security consolidated from April 2024.

Financial highlights

• Consolidated sales and operating profit increased year-over-year, with sales up JPY 7.1 billion and operating profit up JPY 2.3 billion.

• Gross profit increased to ¥123,494 million from ¥111,842 million year-over-year.

• Comprehensive income for the period was ¥20,089 million, down 27.9% year-over-year.

• EPS for the nine months was ¥96.28, up from ¥90.42 in the prior year.

• Total assets grew to ¥1,874,730 million, and net assets to ¥184,899 million as of September 30, 2024.

Outlook and guidance

• Continued investment in all segments in Q4 to drive growth from next year, with a focus on AI, robotics, and cybersecurity.

• Launch of GPU Cloud Services for generative AI planned as a new growth driver after January 2025.

• Earnings and dividend forecasts not disclosed due to volatility in internet finance, crypto asset, and incubation businesses; dividends disclosed quarterly.