■Performance Trends
1. Financial Summary for the Fiscal Year Ending March 31, 2024
Good Life ＜3796＞'s financial results for the fiscal year ended 2024/3 were sales of 2,808 million yen, up 4.1% from the previous fiscal year; EBITDA down 3.5% to 658 million yen; operating profit down 24.9% to 176 million yen; ordinary profit down 11.6% to 208 million yen; and net income attributable to parent company shareholders down 7.6% to 146 million yen.
Sales for the fiscal year ended 2024/3 showed steady growth. In particular, monthly SaaS usage fee revenue remained steady at 2,435 million yen, up 7.6% from the previous fiscal year due to new introductions to enterprise companies and the effects of upselling/cross-selling to existing customers. Average customer unit prices also continued to rise, and subscription sales remained strong. Meanwhile, solution sales declined compared to the previous fiscal year. This is because as a result of focusing on projects for large-scale enterprise companies with the real estate rental management business at the core, projects became larger, requirements became more complicated, and time periods lengthened. Partial deliveries and sales were recorded in some projects, but they were behind schedule, and some projects were carried over to the next fiscal year or later. Both operating income, ordinary income, and net income attributable to parent company shareholders were affected by cost-advanced investments, resulting in a decline in profit. In particular, the increase in labor costs and IaaS related costs had an impact on the cost structure. However, EBITDA has been created in a stable manner, which shows the strength of the foundation. From the fiscal year ending 2025/3 onwards, it is expected that profitability will improve as inspections and accounting of large-scale projects currently underway will proceed. It is a policy that aims for sustainable growth by promoting SaaS growth strategies while continuing to thoroughly manage costs.
The cost of sales increased 10.0% from the previous fiscal year to 1,206 million yen. This is mainly due to an increase in usage fees due to the impact of the depreciation of yen on IaaS (Infrastructure as a Service) transactions denominated in US dollars. In addition, the expansion of human capital investment centered on hiring new graduates and the increase in outsourcing costs to partner companies associated with larger implementation support projects also contributed to the increase in sales costs. These investments are aimed at strengthening SaaS operations and customer support systems, and are positioned as strategic cost increases with an eye on future growth.
(1) Number of users and number of stores
The number of stores gradually increased from 4,406 stores in the first quarter of the fiscal year ending 2023/3, and reached 4,572 stores in the latest fourth quarter of the fiscal year ending 2024/3. Meanwhile, although the number of corporations has only increased slightly from 1,455 corporations to 1,505 corporations, it has shown a relatively stable trend. Since the company's SaaS products are being newly introduced targeting enterprise companies with a large number of users, it is conceivable that such a movement will occur due to the acquisition of customers developing multiple stores, even if the growth in the number of corporations is moderate. Since the monthly fee for SaaS fluctuates depending on the number of properties handled by real estate companies, the unit price of use is higher for large-scale customers even with the same company, and although the company emphasizes the number of customers, it is focusing on acquiring larger customers.
(2) KPI
In addition to the number of users, the company uses “ARPU,” which is the average monthly unit price per customer, and the “MRR cancellation rate,” which is the customer's sale-based cancellation rate for a specific period (monthly unit), as KPIs. “ARPU” is used in the telecommunications industry to evaluate business soundness and profitability, and is also used as an index for formulating strategies to maximize profits from customers, and the “MRR cancellation rate” is used to determine how many customers have been lost on a sales basis, and to predict business sustainability and profit.
(a) ARPU
Quarterly sales increased steadily from 622 million yen in the 3rd quarter of the fiscal year ending 2022/3, and reached 756 million yen in the latest fourth quarter of the fiscal year ending 2024/3. Meanwhile, ARPU also continued to improve from 118,000 yen in the 3rd quarter of the fiscal year ending 2022/3, and recorded 140,000 yen in the fourth quarter of the fiscal year ending 2024/3. This data shows that while the company is efficiently raising profits, the unit price of revenue from users is also improving at the same time, reflecting that the business model is going well. In particular, growth on both sales and ARPU indicates the company's sustainable development and competitiveness in the market.
(b) MRR Cancellation Rate
The MRR cancellation rate recorded 0.44% in the 3rd quarter of the fiscal year ending 2022/3, then began to decline, and was -0.68% in the same fourth quarter. After that, it rose again to 0.65% in the first quarter of the fiscal year ending 2024/3, but recorded -0.36% in the same fourth quarter. It is important to be able to confirm a “negative turn,” where the increase due to upselling from existing customers exceeds the decrease in MRR due to cancellation of contracts. This shows that the company maintains a high level of customer satisfaction, has a good customer retention rate, and has a stable business foundation.
(3) Personnel structure
As of the end of 2024/4, the company's personnel structure is 229 people in total, and they are focusing on expanding engineers and the introduction/operation support service department in particular. The engineer division showed an increase of 19 people compared to the end of March 2023, reaching a total of 88 people, and this is expected to improve technical capabilities and accelerate product development. The introduction/operation support service department increased by 9 to 27 people, and the sales & marketing department increased by 4 to 70 people, and improvements in customer support and service quality are being achieved. The company is continuing its recruitment plan for 10 to 15 people per year, and in particular, the idea is to focus on hiring new graduates and future in-house production in the outsourcing field while looking at internal resources within the company.
(Written by FISCO Visiting Analyst Hiroshi Nakayama)