GMO Research & AI,Inc., The Current Fiscal Year Ordinary Profit Revised Downward to an Unexpected 40% Decrease

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Wed Nov 6, 2024 3:31 pm JST Earnings

3695 GMO Research & AI,Inc. 【J-GAAP】

Earnings Report

GMO Research & AI,Inc. <3695> [TSE-G] announced its financial results after the market closed on November 6th (15:31). The consolidated ordinary profit for the cumulative third quarter of the fiscal year ending December 2024 (January to September) significantly dropped by 78.5% from the same period last year to 67 million yen.

In addition, the full-year consolidated ordinary profit has downwardly by 49.2%, from the previous forecast of 502 million yen to 255 million yen (compared to 428 million yen in the previous period). This changes the outlook from an anticipated profit increase to a projection of a 40.4% decrease in profit.

Based on the full-year plan announced by the company after the downward revision, our estimate of the consolidated ordinary profit for the July to December period (second half) has downwardly by 59.7%, from the previous forecast of 414 million yen to 167 million yen (compared to 208 million yen in the same period of the previous year). This changes the outlook from an anticipated profit increase to a projection of a 19.7% decrease in profit.

In the most recent three-month period, from July to September (3Q), the consolidated ordinary profit/loss turned to a loss of 21 million yen (compared to a profit of 91 million yen in the previous period). The operating profit margin drastically worsened from 8.1% in the same period last year to 0.3%.

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Actual Results

Accumulated Results 3rd Quarter

Fiscal Year	Revenue	Operating Profit	Ordinary Profit	Net Profit	Adj. EPS	Progress Rate vs. First Half	Announce	Accounting Standards
Jan - Sep, 2022	3,771	344	430	318	195.0	93.9	Nov 7, 2022	J-GAAP
Jan - Sep, 2023	3,801	303	311	217	133.0	72.7	Nov 6, 2023	J-GAAP
Jan - Sep, 2024	3,657	73	67	58	35.8	26.3	Nov 6, 2024	J-GAAP
YoY	-3.8%	-75.9%	-78.5%	-73.3%	-73.1%

Guidance Update

Second Half Update

Fiscal Year	Revenue	Operating Profit	Ordinary Profit	Net Profit	Adj. EPS	Adj. Dividend	Announce	Accounting Standards
Jul - Dec, 2024 Prev	3,281	432	414	270	165.3	114.84	Aug 6, 2024	J-GAAP
Jul - Dec, 2024 New	2,642	194	167	118	72.2	114.84	Nov 6, 2024	J-GAAP
Revision Rate	-19.5%	-55.1%	-59.7%	-56.3%	-56.3%

Full Year Update

Fiscal Year	Revenue	Operating Profit	Ordinary Profit	Net Profit	Adj. EPS	Adj. Dividend	Announce	Accounting Standards
Dec, 2024 Prev	5,746	502	502	342	209.3	114.84	Feb 5, 2024	J-GAAP
Dec, 2024 New	5,107	264	255	190	116.3	114.84	Nov 6, 2024	J-GAAP
Revision Rate	-11.1%	-47.4%	-49.2%	-44.4%	-44.4%

Current Period Guidance

Second Half Results

Fiscal Year	Revenue	Operating Profit	Ordinary Profit	Net Profit	Adj. EPS	Adj. Dividend	Announce	Accounting Standards
Jul - Dec, 2023	2,536	236	208	153	93.8	114.84	Feb 5, 2024	J-GAAP
Jul - Dec, 2024 Guidance	2,642	194	167	118	72.2	114.84	Nov 6, 2024	J-GAAP
YoY	+4.2%	-17.8%	-19.7%	-22.9%	-23.0%

Current Period Guidance

Fiscal Year	Revenue	Operating Profit	Ordinary Profit	Net Profit	Adj. EPS	Adj. Dividend	Announce	Accounting Standards
Dec, 2022	5,200	419	458	356	218.4	109.14	Feb 6, 2023	J-GAAP
Dec, 2023	5,117	440	428	307	188.2	114.84	Feb 5, 2024	J-GAAP
Dec, 2024 Guidance	5,107	264	255	190	116.3	114.84	Nov 6, 2024	J-GAAP
YoY	-0.2%	-40.0%	-40.4%	-38.1%	-38.2%

Quarterly Results

Fiscal Year	Revenue	Operating Profit	Ordinary Profit	Net Profit	Adj. EPS	Operating Profit Margin	Announce	Accounting Standards
Jul - Sep, 2023	1,220	99	91	63	38.6	8.1	Nov 6, 2023	J-GAAP
Oct - Dec, 2023	1,316	137	117	90	55.2	10.4	Feb 5, 2024	J-GAAP
Jan - Mar, 2024	1,361	119	122	92	56.5	8.7	May 8, 2024	J-GAAP
Apr - Jun, 2024	1,104	-49	-34	-20	-12.3	-4.4	Aug 6, 2024	J-GAAP
Jul - Sep, 2024	1,192	3	-21	-14	-8.7	0.3	Nov 6, 2024	J-GAAP
YoY	-2.3%	-97.0%	－	－	－