■Summary

E-Guardian ＜6050＞ is a comprehensive internet security enterprise that provides everything from cybersecurity to debugging and operation in one stop, centering on monitoring, customer support, etc. for e-commerce (EC), SNS, and social game operators. Since it was listed on the Tokyo Stock Exchange (hereafter, Tokyo Stock Exchange) Mothers in 2010, it has acquired temporary staffing services, debugging businesses, internet security consulting businesses, cloud-based cybersecurity businesses, etc. through M&A, and established a foundation as a “comprehensive internet security enterprise.” E-Guardian Philippines Inc. (established in 2017) is expanding overseas, and in 2021 E-Guardian Vietnam Co. , Ltd. was established. In recent years, the cybersecurity field has been strengthened, such as making the cloud-based security service Glace Avail Co., Ltd. (2019) a subsidiary (2019), and making the software-type WAF* JP Secure Co., Ltd. a wholly owned subsidiary (2020). In 2023/8, a capital and business alliance was formed with Change Holdings ＜3962＞ (hereafter, Change HD), built a system leading the restructuring of the cybersecurity industry, and expanded into the digital BPO area for enterprises (large enterprises/local governments).

※ WAF: Abbreviation for Web Application Firewall. A system that protects websites from attacks aimed at web apps.

1. Business Overview

Social support is the main driver of sales, accounting for 59.3% of sales in the 2024/9 fiscal year. Game support (same 13.9%), ad process (same 12.4%), and cybersecurity (same 7.9%) continue. Others include hardware debugging, etc. (same 6.5%).

2. Performance trends

Consolidated financial results for the fiscal year ending 2024/9 showed a decrease in sales of 11391 million yen, down 4.3% from the previous fiscal year, and operating profit of 1705 million yen, down 4.1% from the same period. As for sales, it barely reached 99.0% compared to the revised plan value (11503 million yen). What was strong was that customer support for EC and flea market sites remained steady, and acquisition of new projects for existing customers progressed from the second half onwards. Also, cybersecurity has grown significantly due to vulnerability diagnosis and WAF sales expansion. Meanwhile, the decline in sales from existing customers could not be absorbed, resulting in a decline in sales. Furthermore, with regard to collaboration with Change HD, they have already begun transferring existing outsourced operations of the Change HD Group to the company in main businesses such as social support and cybersecurity businesses, and joint proposals utilizing mutual customer bases. In terms of quarterly sales, there was a 2.8% increase compared to the same period last year in the fourth quarter of the fiscal year ending 2024/9 alone, and it can be confirmed that business performance bottomed out.

The consolidated earnings forecast for the fiscal year ending 2025/9 is that sales are 12365 million yen, up 8.5% from the previous fiscal year, and operating profit is 1819 million yen, up 6.7% from the same period, returning to a recovery trajectory from bottoming out in the previous fiscal year, and it is expected that sales and profit trends can be confirmed. In the existing BPO area, the external environment is good, and there is room for growth in EC, flea market, Fintech-related SNS operations for game support, reputation surveys, etc. We will continue to work to strengthen the sales organization system, and focus on creating new projects by capturing potential customer needs and strengthening proposals. In the cybersecurity business, we will respond to strong demand in the background of cyber attacks, etc., and will be developed around vulnerability diagnosis, WAF, and consulting services, which are existing services. We will focus on securing and developing human resources for further growth. Furthermore, by continuing to focus on marketing measures, we aim to lead to business expansion and improve the company's brand image.

3. Growth strategies and topics

The effects of proposed measures to strengthen sales capacity are becoming apparent. Taking advantage of the partnership with Change HD in 2023/10, in addition to those for the entertainment industry up until now, it steered in the direction of targeting enterprise industries such as large enterprises and local governments as customers. Enterprise digital BPO projects are relatively large-scale, and since cost effectiveness is strictly required, skills in proposal sales and consulting sales are required. The company is working on building capabilities to actively acquire new projects by strengthening the organization by hiring sales managers, implementing education, etc. Mutual customer transfers and joint proposals with Change HD are also becoming active, and it is said that it is also an opportunity to share know-how. Since digital BPO projects for enterprises involve a “production system” (securing human resources to perform operation services and improving skills) along with sales, a certain amount of preparation period is required. Regarding the “production system,” efforts to transfer outsourced operations outside of the Change HD Group to the company have already progressed to the middle of the road, and it has been confirmed that the company's human resources and systems can handle it. It is expected that business for the enterprise industry will become one of the pillars of the new business in the medium term.

■Key Points

・In the fiscal year ending 2024/9, the recovery trend for the second half of the fiscal year ended also landed due to a decrease in sales and profit

・The fiscal year ending 2025/9 is expected to recover with sales of 12.3 billion yen and operating income of 1.8 billion yen

・Strengthening proposed sales capabilities for large-scale enterprise digital BPO projects is underway through collaboration with Change HD.

(Written by FISCO Visiting Analyst Hideo Kakuta)