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Hello. I am Shonosuke Hata from Kakaku.com Inc. Thank you for joining us today for our Third Quarter Financial Results Presentation.
First, please turn to Page 3 of our presentation material for our consolidated operating results. In the third quarter, revenue was JPY 16.321 billion, up 16.1% from last year. Operating profit was JPY 7.02 billion, up 24% from last year, and operating profit margin was 43%. Profit before income taxes was JPY 7.045 billion, up 3.8% from last year. Net income was JPY 4.791 billion, up 2.5% from the previous year.
Next, the cumulative total for the first 9 months of the fiscal year, revenue was JPY 44.561 billion, up 17.5% from last year. Operating profit was JPY 17.927 billion, up 30.1% from last year, and operating profit margin was 40.2%. Income before income taxes was JPY 18.375 billion, up 24% from the previous year. Net income was JPY 12.837 billion, up 22.9% from the previous year. Compared to the full year forecast shown on the far right, the progress rate for the first 9 months is 69.1% for revenue, 69.2% for operating profit, 71.2% for profit before income taxes and 72.9% for profit attributable to owners of the parent company.
Next, we have the sales composition by business. Please refer to the graph on Page 4. I will talk about each of these businesses later on. But as a percentage of total sales, Kakaku.com accounted for 30.4%, Tabelog for 38.5%, and New Media and Solutions/Finance was 31.1%.
Before moving on to the operating results by business, here is a breakdown of consolidated operating expenses and other items. In advertising expenses, expenses related to T-points increased in connection with the progress of Tabelog and expenses related to advertisements for Kakaku.com's service business and Kyujin Box increased along with sales growth. As for commissions, agency commissions for Tabelog have increased. There were hardly any special factors in the third quarter, and the composition is almost the same as in previous years.
Next, please see Page 7 for a breakdown of operating results by business. First, kakaku.com. Third quarter sales in shopping, services and advertising totaled JPY 4.96 billion, down 6.8% from last year. The cumulative total for 9 months was JPY 14.603 billion, down 7.9% Y-o-Y. Tabelog sales in the third quarter were JPY 6.291 billion, up 18.5% from the previous year. And cumulative sales through the third quarter were JPY 17.112 billion, up 35.5% Y-o-Y. New Media and Solutions/Finance sales in the third quarter were JPY 5.07 billion, up 48% from the previous year. The cumulative total through the third quarter was JPY 12.846 billion, a 35.8% increase Y-o-Y.
Now let me explain results for each of Kakaku.com's businesses. First, sales in the shopping business declined. Durable goods were affected by a decrease in the number of new product registrations and by product price increases due to exchange rate fluctuations and other factors, resulting in a contraction of 2.2% compared to last year. In addition, consumer goods, although recovering slightly from the previous quarter, were still affected by volatility in search rankings resulting in a 22.7% decrease in sales compared to last year.
Next, I will explain the factors behind the progress of durable goods and consumer goods. First, in durable goods, the number of new product registrations remained very low, with PCs showing a slight recovery of 39.2% over the previous year but home appliances showing a slight decline of 12.4%. The total number of new product registrations for PCs and home appliances was slightly lower than in the second quarter. In personal computers, new products increased mainly for tablet PCs, but new product registrations for peripheral devices, such as wireless LAN routers also increased.
On the other hand, new product releases of home appliances, especially large-sized products, such as flat screen TVs and refrigerators declined. However, audio equipment, especially earphones increased for 3 consecutive quarters and recovered to a level exceeding that of the previous year.
Next, for consumer goods, see the graph on the right. Organic traffic from search engines has recovered slightly from the large drop in August but remaining at a negative 25.2% in the third quarter compared to the previous year. We are still in the process of recovery.
Next, we have Kakaku.com's service business. Service business revenue increased. Compared to last year, the Personal Finance and Telecommunications category increased 7% and 10.3%, respectively, while the Automotive category remained flat.
Next, trends for each category. First, in personal finance, the number of applications for card loans and credit card issuance increased resulting in a 7% growth compared to last year.
Next, in the telecommunications category, while the number of applications for fiber optic lines declined, the number of applications for mobile lines and overseas WiFi increased, resulting in a 10.3% increase in sales compared to the previous year. In the automotive category, the number of applications for used car availability and car insurance quotes declined. Meanwhile, the applications for quotes for selling cars has increased slightly. As a result, sales in the automotive category, while still at a low level, increased by 1.1% compared to last year.
Please have a look at the graph in the upper right corner, the number of applications for overseas WiFi has increased in close proportion to the number of travelers to overseas. And although the numbers still remained low, it has recovered to 16.4% of the pre-COVID level. At the bottom right, you can see some examples of support content for our service categories. We are evolving our services for mortgages.
In terms of group credit life insurance coverage, for example, you are able to select the right insurance to meet such detailed conditions, such as a cancer rider. In particular, mortgages are of great interest to the market and have a lot of potential for growth. So we are working to expand our business in this area.
Next, on Page 12 is the advertising business. In the third quarter of this fiscal year, the number of advertisements from PC manufacturers increased but the number of ad placements from manufacturers of digital and home appliances decreased due to the continuing lack of new products. Total sales from banner and tie-in advertisements were JPY 950 million, down 18.2% from last year. In addition, sales for network and listing ads continued to decline, down to 27.7% compared to last year. Although the absolute amount is small, the negative trend seen in the previous 2 quarters continued into the third quarter.
Next, on Page 13, we have a graph showing changes in banner ad sales by advertising industry over the past 3 years. First, the blue line shows sales from advertisements by manufacturers of digital and home appliances. Although the number of advertisements increased Q-o-Q due to the year-end bonus shopping season, the number of advertisements did not increase compared to the previous year due to the decrease in new products and the increase in production costs.
In addition, ad placements from PC manufacturers increased from before COVID-19 with a plus of 10.8% compared to last year. This figure grew in response to an increase in new products, which I mentioned earlier. Sales from ad placements by car manufacturers were down 10.7% Y-o-Y due to the continued impact on the supply side, including production cuts, delayed shipments and long delivery times of vehicles. The impact of the shortage of semiconductors in this industry remains strong.
This concludes my explanation of the Kakaku.com business.
Next, I will explain about the Tabelog business. The restaurant promotion business increased 24.2% compared to the previous year, which we believe is generally in line with our projections. The premium user membership business remained mostly unchanged, down 0.7% from the previous year. The advertising business was down at 10.3% compared to last year. Since the absolute amount is small, advertising sales are easily affected by the fluctuations in ad placements by various major clients and remained flat in the third quarter.
Next, on Page 15 is a breakdown of the restaurant promotion business. Sales in the promotion service grew 11.6% over last year, a gradual increase in numbers from the decline in sales that occurred in the early days of COVID. Regarding the online reservation service, the third quarter is typically a busy season. So the absolute amount tends to be larger, but results were relatively favorable compared to the third quarter of last year with an increase of 47% Y-o-Y.
Next, Page 16 shows KPIs for the promotion service and the online reservation service. First, on the left side, you can see the number of restaurants subscribing to the promotion service and ARPU. The number of restaurants reached a total of 46,100 in the third quarter, a net increase of 1,100 restaurants compared to 3 months ago. Looking at past results, although the total number of contracted restaurants is still lower than before COVID, in terms of net increase, the past 3 months were quite favorable. ARPU was JPY 22,800. We were able to increase ARPU, as the restaurants shifted slightly to higher-priced plans and restaurants which had previously canceled their contract, resubscribed to the promotion service.
Next, on the right, we have the online reservation service. The 3 months in the third quarter are seasonally the months with the most reservations. So compared to the previous quarter, the third quarter ARPU of JPY 12,300 is a very good result. The number of contracted restaurants for the online reservation service in the third quarter decreased by 100 from 62,900 in the second quarter. This is due to the fact that there were some restaurants, which normally do not accept reservations, but which had signed up for the online reservation service at the beginning of the Go To Eat campaign. The contracts with these restaurants continued into the first and second quarters of this fiscal year. But since these restaurants did not continue to actively use the service, their contracts were not renewed.
However, we were able to increase the number of new subscriptions to the online reservation service by more than 2,000, so excluding these special factors, we estimate that the net increase would almost have been in line with our plan.
Next, on Page 17 is a graph showing the breakdown of the total number of contracted restaurants including the number of restaurants that are subscribing both to the promotion service and the online reservation service. The number of restaurants subscribing to both the promotion service and the online reservation service reached 41,600 restaurants.
Finally, on Page 18, you can see the number of online reservations. In the second quarter, online reservations decreased for a short time due to a resurgence in COVID infections. But in the third quarter, the number of online reservations experienced steady growth, reaching 16.56 million. This is almost the same level as that of the previous year when the Go to Eat campaign points were awarded. This concludes my explanation of the Tabelog business.
Next, let me move on to New Media and Solutions/Finance. First, let's look at the Y-o-Y sales in each domain. Sales for our recruitment domain increased by 23.8% and sales in the real estate domain increased by 12.2%. The travel/transportation domain comprising mainly of Time Design and LCL performed very well, increasing by 50.4% compared to the previous year. In the entertainment/hobbies domain, which consists of movie-related sites and webCG, a site for car enthusiasts, the result was a 6.7% decrease compared to the previous year. As I will explain in more detail later, the finance domain increased 159.1% compared to last year, as a result of a special factor, namely the change in estimates related to revenue recognition.
Next, on Page 20, Kyujin Box. Kyujin Box revenue continued to increase due to an increase in advertisers and paid job listings resulting in a 23.8% increase in revenue and a 3.9% increase in monthly users compared to the previous year. The right-hand part of this page shows some characteristics of Kyujin Box users. Although we have explained this individually in the past, we have not included this type of information in our presentation materials.
First of all, the ratio by device shows that 14.5% of users use the site on a computer, but the majority of users which is 85.5%, uses Kyujin Box on a smartphone. When we compare the browser-based website with the Android app, which was released in June 2022, in terms of job views per unique user per day, users of the Android app have about 1.8x more views of job listings than users of the browser-based site. This does not directly indicate the conversion rate of these users, but the number of job views shows that app users are much closer to revenue and having higher profit margin. Since we have also released an iOS app, we would like to show the total number of views for app users somewhere in the future while further increasing conversions.
Next, on Page 21, we have the business progress in the travel/transportation domain. In addition to the continued growth in domestic travel, there has been a slight recovery in overseas travel, resulting in increased revenue in the travel/transportation domain. Revenue for LCL, which offers comparison of highway buses was up 52.8% compared to last year, indicating that the recovery from COVID-19 is progressing well and Time Design, which offers dynamic package solutions for hotels was also very strong with revenue up 48.3% compared to last year. 4travel also achieved a 48.2% increase compared to last year.
The number of hotels that are using Time Design's global DP or domestic DP has increased significantly during the pandemic with a 7.9% increase compared to last year and an even higher increase compared to the year before last. We are steadily making preparations for when the market fully recovers from the impact of COVID-19, including outbound travel and travel between countries outside of Japan.
Next, on Page 22. Sumaity continued to see an increase in sales, up 12.2% over last year. And the fluctuation in the number of monthly users has leveled off considerably. On the right side, we have eiga.com, gaie, Kinarino and webCG. Gaie's sales were down due to the decrease in Hollywood movies releases. On the other hand, eiga.com's sales increased 13.7% compared to the previous year, profiting partly from a number of domestic anime hits.
Now please see Page 23 for the Finance business. Kakaku.com insurance has increased sales in the third quarter due to a change in the estimates related to revenue recognition in October. In the past, for Life Insurance, revenue for Kakaku.com Insurance as an insurance agency was recognized when a material reversal of revenue no longer was likely to occur which is specifically when Kakaku.com Insurance charged an agency fee to the client insurance company. As of October 2022, we have been able to obtain from insurance companies, the data necessary to reasonably estimate agency commissions. This allows us to reasonably estimate agency commissions to the extent that there is no significant reversal of earnings and recognize revenue at the inception of insurance contracts. Agency commissions for insurance contracts concluded in the second quarter or earlier are also recorded in the third quarter on a lump-sum basis.
Therefore, from the fourth quarter onward, commissions for such past insurance contracts will no longer be recognized in a lump sum and the agency commissions for insurance contracts concluded in the fourth quarter will be recognized as revenue at the time the relevant insurance contracts are concluded. I hope you understand and recognize that these third quarter results are a bit irregular.
Next, we have picked out some of the future initiatives in each business. First of all, on Page 27 are some future initiatives of Kakaku.com. First, on the left side, you can see that we are planning on expanding the information and services we provide in order to help users to preserve the environment. We have been planning and promoting this for some time, but we will continue our initiative in the fourth quarter, next fiscal year and the year after that. We will provide more information on environmentally friendly products, durable products as well as selling, buying and searching for secondhand products. As a result, we hope to promote to the concepts of reduce, reuse as well as the use of eco-friendly products.
Next, please have a look on the right side of the page. In the past, we have not done any mass advertising to actively promote what kind of media Kakaku.com is and what it can do but we believe that some PR will be necessary in the future. We would like to introduce the features and advantages of Kakaku.com including our environmental initiatives shown on the left, through video advertisements as well as on our website.
Next, I would like to discuss future initiative for Tabelog. The diagram shown on this page remains unchanged from the past quarter, but we will continue to focus not only on being able to search for restaurants. In terms of restaurants' business activities and revenue, we want to also focus on increasing online reservations, mobile ordering, which is useful for both users and restaurants, as well as procurement.
Lastly, on Page 29, we have Kyujin Box. Although we believe that Kyujin Box is well rounded, there are still many improvements to be made to the main functions of the site, and we are working on them one by one to make the site more user-friendly.
Here are several examples of our initiatives. There is still much more that we can do in terms of expanding search criteria and improving accuracy for fuzzy searches not only in the recruiting domain, but as an online media in general. Another initiative is making it easier to search and find jobs for certain working styles, skills, et cetera.
Thirdly, we will continue to provide information on the latest trends as well, as advice on searching for a job or making a career change. You can see an example of this. Our recently released online media called Kyujin Box Journal on the right side of the page.
Through these efforts, we want to become a portal site that is easier to use. We would also like to continue to increase awareness for Kyujin Box through TV commercials, as shown on the bottom right of this page.
This concludes my explanation of financial results for each of our businesses as well as our future initiatives.
We have included some reference materials on Page 32 and beyond, which we hope you will take a look at if you have a few minutes.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]