■The performance trend of Circle Ace <5029>

1. Overview of the 2025 Fiscal Year First Half Results

For the consolidated performance in the interim period of the fiscal year ending March 2025, revenue was 1,697 million yen (a 25.5% increase compared to the same period last year), operating loss was 28 million yen (a loss of 28 million yen in the same period last year), ordinary loss was 23 million yen (a loss of 28 million yen in the same period last year), and net profit attributable to shareholders of the parent company was 10 million yen (a loss of 60 million yen in the same period last year). The company's consolidated performance achieved revenue increases in both the Consulting Services and SaaS services compared to the same period last year. The Aolana Now business will be included in the consolidation starting from the fourth quarter of the fiscal year ending March 2024, and while the operating profit is planned to be negative due to growth investments in Aolana Now, net profit remains positive. On a stand-alone basis, the company is achieving revenue and profit increases and continues to maintain a positive trend. The progress rate toward the revenue plan of 3,650 million yen for the fiscal year ending March 2025 is 46.5%, indicating steady growth.

Operating profit reached an all-time high, and the operating margin achieved double digits for the first time since the listing.

In the second fiscal quarter of the fiscal year ending March 2025, Circle Ace's operating profit recorded a quarterly high of 97 million yen. This is an increase of 66 million yen compared to the same period last year, attributed to improvements in the operating rate and expense reviews. The operating margin for the same quarter was 12.2%, achieving double digits for the first time since the listing in April 2022. These results reflect efficient Operation and improved profitability, indicating a stable growth trend.

2. Performance by Service Type

(1) Consulting Services

For the interim period of the fiscal year ending March 2025, revenue from Consulting Services was 1,453 million yen, up 11.9% compared to the same period last year. The company's Consulting Services have improved operating rates and profit margins due to the establishment of a system for quantitatively monitoring consultant activity on a weekly basis. In August 2024, a new office was opened in Osaka, leading to orders for multiple new projects in the Kansai area, achieving results in new Target Materials markets. Additionally, the recruitment of consultants (engineers) for the fiscal year ending March 2025's full-year revenue target is progressing smoothly, and stable performance expansion is anticipated.

(2) SaaS Services

For the interim period ending March 2025, the revenue from SaaS Services was 68 million yen, representing a 27.4% increase compared to the same period last year. AGAVE has earned the trust of customer companies as a high-specialty cloud play focused on overseas human resources and labor, characterized by a low cancellation rate. With this strength, the company continues to actively pursue expansion, anticipating an increase in the number of contracts and the expansion of its revenue base. The growth of stock-type revenue supported by a stable customer base is driving the company's SaaS business growth.

(3) Now Inc

For the interim period ending March 2025, the revenue from the Now Inc business was 175 million yen. Now Inc was established in August 2023 and began service delivery in October. It will be consolidated starting from the fourth quarter of the fiscal year ending March 2024, with revenue recognized for the full fiscal year. For the full fiscal year plan ending March 2025, revenue and recruitment are progressing smoothly, with case studies also being published in collaboration with Pasona Group <2168> and NIPPON EXPRESS Holdings <9147>. On the other hand, active growth investments continue, and operating profit also landed in the negative for the second quarter of the fiscal year ending March 2025, following the first quarter. However, this investment phase is strategic, aimed at building a foundation for future revenue expansion.

3. Financial Condition

At the end of the interim period ending March 2025, current assets decreased by 150 million yen compared to the end of the previous period, particularly cash and deposits decreased by 382 million yen, while accounts receivable increased by 63 million yen. Fixed assets remained almost unchanged, and total assets decreased by 157 million yen. Total liabilities decreased by 107 million yen, especially current liabilities which decreased by 142 million yen. On the other hand, fixed liabilities increased by 35 million yen. Interest-bearing debt decreased by 32 million yen, improving financial soundness. Although net assets decreased by 49 million yen, the reduction of liabilities is progressing, indicating a general stability of the financial base.

(Reported by FISCO guest analyst Hiroshi Nakayama)