E Seikatsu : Consolidated Financial Results for the Fiscal Year Ended March 31 2023 (Japanese GAAP) (527KB)

Note: This document has been translated from Japanese original for reference purposes only. Some

sentences have been machine translated. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

May 14,2024

(Delayed)Consolidated Financial Results for the Fiscal Year Ended March 31, 2024 (Japanese GAAP)

Company name:	e-Seikatsu Co., Ltd.	Listing:	Standard, Tokyo Stock Exchange
Securities code:	3796	URL:	https://www.e-seikatsu.info/
Representative:	President and CEO	Zenichi Maeno
Inquiries:	Executive Vice President and CFO	Hiroyuki Shiokawa
TEL:	[phone]

Scheduled date of annual general meeting of shareholders: June 26, 2024

Scheduled date to commence dividend payment:		June 27, 2024
Scheduled date to file annual securities report:			June 24, 2024
Preparation of supplementary materials on financial results:	Yes
Holding of financial results briefing:	Yes		For institutional investors and analysts
				(Yen amounts are rounded down to the nearest millions)
1.Consolidated financial results for the Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)
(1) Consolidated Operating Results (cumulative)
						(Percentage indicate year-on-year changes.)
	Net sales		EBITDA		Operating profit	Ordinary profit		Profit attributable
				to owners of parent
Fiscal year ended	Millions	%	Millions	%	Millions	%	Millions	%	Millions	%
of yen	of yen	of yen	of yen	of yen
March 31, 2024	2,808	4.1	658 △3.5	176	△24.9	208 △11.6	146 △7.6

March 31, 2023

2,696

10.8

682

13.7

234

41.7

236

41.8

158

47.9

Note: Comprehensive Income	For the fiscal year ended March 31, 2024	146	Millions of yen	(△7.6%)
	For the fiscal year ended March 31, 2023	158	Millions of yen	(47.9%)

Note: EBITDA (operating profit+ depreciation expenses) is disclosed as a useful comparative indicator for our group's performance.

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	Basic earnings per	Diluted earnings per	Return on equity	Ratio of ordinary	Ratio of operating
	share	share	profit to total assets	profit to net sales
Fiscal year ended	Yen	Yen	%	%	%
March 31, 2024	21.17	-	7.7	8.5	6.3
March 31, 2023	22.92	-	8.9	10.4	8.7

Reference:	For the fiscal year ended March 31, 2024	-	Millions of yen
Share of profit of entities accounted for using equity method	For the fiscal year ended March 31, 2023	-	Millions of yen
Note: Diluted earnings per share is not stated since there are no dilutive shares.

(2) Consolidated Financial Position

	Total assets	Net Assets	Equity-to-asset ratio	Net Assets per Share
	Millions of yen	Millions of yen	%	Yen
As of March 31, 2024	2,540	1,946	76.6	282.08
As of March 31, 2023	2,357	1,835	77.9	265.90

Reference: Equity	As of March 31, 2024	1,946	Millions of yen
	As of March 31, 2023	1,835	Millions of yen

(3) Consolidated Cash Flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
	operating activities	investing activities	financing activities	at end of period
Fiscal year ended	Millions of yen	Millions of yen	Millions of yen	Millions of yen
March 31, 2024	618	△656	△34	739
March 31, 2023	635	△525	△34	806

2.Cash dividends

		Dividend per share		Total cash	Payout ratio	Ratio of dividends
						to net assets
	First	Second	Third	Fiscal year-	Total	dividends (Total)	(Consolidated)
	(Consolidated)
	quarter-end	quarter-end	quarter-end	end
	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
Fiscal Year Ended March	-	0.00	-	5.00	5.00	34	21.8	1.9
31, 2023
Fiscal Year Ended March	-	0.00	-	5.00	5.00	34	23.6	1.8
31, 2024
Forecast for Fiscal Year	-	0.00	-	5.00	5.00		51.5
Ended March 31, 2025

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3.Consolidated Earnings Forecasts for the Fiscal Year Ended March 31, 2025 (April 1, 2024 to March 31, 2025)

(Percentage indicate year-on-year changes.)

								Profit attributable to	Basic earnings per
	Net sales		Operating profit	Ordinary profit	share attributable to
		owners of parent
								owners of the parent
	Millions of		%	Millions of	%	Millions of	%	Millions of	%	Yen
	yen			yen		yen		yen
Full year	3,119		11.1	100	△43.2	99	△52.4	67	△54.1	9.72

Reference: EBITDA 640 Millions of yen (YonY △2.8%)

Note: EBITDA (operating profit+ depreciation expenses) is disclosed as a useful comparative indicator for our group's performance.

Notes

1. Changes in significant subsidiaries during the cumulative period of the fiscal year (changes in specified subsidiaries due to changes in the scope of consolidation): None
2. Changes in accounting policies, changes in accounting estimates, and restatements of accounting estimates.
3. 1. Changes in accounting policies due to changes in accounting standards, etc.: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Modification and reappearance: None
4. Number of Shares Issued (Common shares)

1. Number of shares outstanding at the end of the fiscal year (including treasury shares)
2. Number of treasury stock at end of period
3. Average number of shares outstanding during the period

As of March	7,280,700	Shares	As of March	7,280,700	Shares
31,2024			31,2023
As of March	379,299	Shares	As of March	379,299	Shares
31,2024			31,2023
Fiscal year	6,901,401		Fiscal year	6,901,401
ended March	Shares	ended March	Shares
31,2024			31,2023

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(Reference) Overview of Non-consolidated Financial Results Non-consolidated financial results for the Fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)

(1) Non-consolidated Operating Results (cumulative)

(Percentage indicate year-on-year changes.)

		Net sales		Operating profit	Ordinary profit			Profit
Fiscal year ended	Millions of yen		%	Millions of yen		%	Millions of yen		%		Millions of yen	%
March 31, 2024		2,807		4.1			144		13.7		203		37.1		142	42.0
March 31, 2023		2,696		10.8			127		44.9		148		47.7		100	65.0
		Basic earnings per share		Diluted earnings per share
Fiscal year ended					Yen						Yen
March 31, 2024					20.62						-
March 31, 2023					14.52						-
(2) Non-consolidated financial position
		Total assets				Net assets		Equity-to-asset ratio		Net assets per share
As of		Millions of yen			Millions of yen				%			Yen
March 31, 2024				2,370					1,754				74.0			254.26
March 31, 2023				2,171					1,646				75.8			238.64
Reference: Equity	As of March 31, 2024				1,754	Millions of yen
		As of March 31, 2023				1,646	Millions of yen

*Financial Results are not subject to Quarterly Review by Certified Public Accountants or Auditing Corporations.

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Table of Contents of Attachments

1. Overview of Results	6
(1)	Earnings	6
(2)	Financial Position	8
(3)	Cash Flows	8
(4)	Outlook	10
(5)	Dividend policy and dividends for the year under review and coming year	12
2. Approach to Selection of Accounting Standards	12
3. Consolidated Financial Statements and Major Notes	13
(1)	Consolidated Balance Sheets	13
(2)	Consolidated Statement of Income and Consolidated Statement of Comprehensive Income	15
	Consolidated statements of income	15
	Consolidated Statement of Comprehensive Income	16
(3)	Consolidated Statement of Changes in Net Assets	17
(4)	Consolidated Statement of Cash Flows	18
(5)	Notes to Consolidated Financial Statements	19
	Notes on Premise of Going Concern	19
	Important Matters That Are the Basis for Preparation of Consolidated Financial Statements	19
	Change in Accounting Policy	20
	Segment and Other Information	20
	Per Share Information	22
	Major Subsequent Events	22

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1. Overview of Results

(1) Earnings

	Fiscal year ended	Fiscal year ended	Year-on-year change
	March 31, 2023	March 31, 2024
Summary of Consolidated Results
		Difference	Rate of
	(thousand yen)	(thousand yen)	(thousand	change
			yen)	（％）
Net sales	2,696,814	2,808,027	111,212	4.1
EBITDA (operating profit+ depreciation expenses)	682,822	658,755	△24,067	△3.5
Operating profit	234,567	176,223	△58,343	△24.9
Ordinary profit	236,432	208,984	△27,447	△11.6
Profit attributable to owners of parent	158,150	146,131	△12,018	△7.6

With the aim of realizing our mission of "Create many 'good life' for others with technology and heart.", we have established a vision of "Create society where comfortable life circulates.". Based on this vision, we develop systems and applications to resolve various issues in the real estate business and the real estate market, and offer these systems as SaaS, a subscription based service. Through this, we are developing businesses that support digital transformation (DX) in the real estate business.

In the real estate industry and real estate market, which is our focus, the promotion of DX that aims to improve operational efficiency and provide better customer service continues to be a matter of great interest, and the systemization of overall operations and the rental housing management business law are of great interest. We believe that the trend of SaaS being preferred in response to this trend continues.

For the fiscal year ended March 31, 2024, the ARPU for SaaS monthly usage fees continued to rise due to new introduction of our SaaS to enterprise companies and up-sell/cross-sell to existing customers, etc. Subscription sales, mainly revenue from usage fees, up 7.6% year-on-year to 2,435,104 thousand yen.

Regarding Solution sales, we have been focusing on introducing our SaaS to relatively large enterprise companies mainly in the real estate rental management industry. Addon development and implementation support projects that make up solution sales, there was a trend toward larger customers, larger project sizes, more complex requirements, and longer periods. Although some of the ongoing projects have been partially delivered and sales have been recorded, this is behind schedule and there are cases where deliveries and sales have been delayed into the next fiscal year or later. As a result, solution sales down 13.8% compared to the same period last year to 372,922 thousand yen.

As a result, sales were 2,808,027 thousand yen (a 4.1% increase in YOY), an increase of 111,212 thousand yen compared to the same period last year.

The number of subscription customers reached 1,505 as of the end of the fiscal year (1,490 in the

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same period of the previous year), and the ARPU (*1) in March was approximately 140,100 yen (133,200 yen in the same period of the previous year).

*1 : the average revenue per user Current month subscription s ales is divided by the number of subscription customers for the current month, and the figures are rounded down to the nearest 100 yen.

*2 : Recurring sales based on the operation support contract after the introduction of SaaS will be presented as "subscription sales" instead of "solution sales" from the fiscal year ending March 31, 2024. In accordance with this change, the average average revenue per use r for past fiscal years has been recalculated based on the same policy.

The breakdown of net sales is as follows.

	Fiscal year ended		Fiscal year ended		Year-on-year change
	March 31, 2023		March 31, 2024
Item details
Sales (thousands	Percentage of	Sales (thousands	Percentage of	Difference	Percentage
	of yen)		total	of yen)		total	(thousand yen)	change (%)
Subscription (Note 1)	2,264,103		84.0	2,435,104		86.7	171,001	7.6
Solution (Note 2)	432,711		16.0	372,922		13.3	△59,788	△13.8
Total	2,696,814		100.0	2,808,027		100.0	111,212	4.1

(Note 1). Subscription: Revenue earned continuously on a monthly basis unless customers apply for cancellation, including monthly charges for SaaS service and Recurring sales based on the operation support contract after the introduction of SaaS . They are our Monthly Recurring Revenue (MRR).

(Note 2). Solutions : Revenue earned from other services, including fees for initial setting, system installation and operation support on spot , commissioned development of system, and sale or introduction of other companies' services as an agency.

(Note 3). Recurring sales based on the operation support contract after the introduction of SaaS will be presented as "subscription sales" instead of "solution sales" from the fiscal year ending March 31, 2024. In accordance with this change Sales figures for past years have also been rearranged based on the same policy.

We conduct transactions denominated in US dollars with vendors that provide IaaS (Infrastructure as a Service), which is the service infrastructure platform for operating our SaaS, and usage fees have increased due to the recent depreciation of the yen. In addition, due to expansion of human capital investment centered on new graduate recruitment and increase in outsourcing costs to partner companies due to larger implementation support projects, etc. As a result, the cost of sales was 1,206,534 thousand yen (up 10.0% year-over-year).

Investing in human capital by expanding our marketing, sales, and support system through active hiring of mainly new graduates, personnel expenses related to sales activities and recruitment- related expenses increased. As a result, selling, general and administrative expenses amounted to 1,425,268 thousand yen (up 4.4% year-over-year).

As a result, EBITDA for the fiscal year was 658,755 thousand yen (down 3.5% year-over-year), a decrease of 24,067 thousand yen from the same period last year. Operating profit was 176,223 thousand yen (down 24.9% year-over-year), a decrease of 58,343 thousand yen.

In addition, forward exchange contracts are used to reduce foreign exchange risks associated with transactions denominated in U.S. dollars, and the recent depreciation of the yen resulted in foreign exchange gains related to these contracts as non-operating income. As a result, ordinary profit was 208,984 thousand yen (down 11.6% year-on-year), a decrease of 27,447 thousand yen.

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Since the Group's reporting segment is the single segment of the "Cloud Solution Business," segment performance is omitted.

(2) Financial Position

① Assets

The Assets as of the end of the fiscal year were 2,540,599 thousand yen, an increase of 183,539 thousand yen from the end of the previous consolidated fiscal year.

The main factors behind this increase were an increase of 157,979 thousand yen in software, and an increase of 47,304 thousand yen in work in progress related to SaaS add-on and introduction support projects.

②Liabilities

Total liabilities at the end of the fiscal year were 593,879 thousand yen, an increase of 71,915 thousand yen from the end of the previous consolidated fiscal year.

The main factors behind this increase were 43,977 thousand yen increase in advances received in conjunction with an increase in SaaS monthly fees received in advance from customers, and an increase of 31,682 thousand yen in accounts payable.

③Net assets

The balance of net assets at the end of the fiscal year were 1,946,719 thousand yen, an increase of 111,624 thousand yen from the end of the previous consolidated fiscal year.

This is attributable to an increase of 146,131 thousand yen due to the recording of Net income attributable to the shareholders of the parent company, and a decrease in retained earnings of 34,507 thousand yen due to the implementation of dividends.

(3) Cash Flow

The balance of cash and cash equivalents as of the end of the fiscal year was 739,371 thousand yen, a decrease of 67,600 thousand yen from the end of the previous consolidated fiscal year. Cash flows and their major factors are as follows.

• Cash flows from operating activities

Net cash provided by operating activities was 618,327 thousand yen, (635,758 thousand yen in the same period of the previous year). The main sources of income are depreciation of 482,531 thousand yen and profit before income taxes of 208,984 thousand yen.

• Cash flows from investing activities

Net cash used in investing activities was 656,485 thousand yen, (525,402 thousand yen in the same period of the previous year). The main expenditure was 637,556 thousand yen for acquisitions of intangible Non-Current Assets related to new SaaS development and functional expansion.

• Cash flows from financing activities

Net cash used in financing activities was 34,484 thousand yen, (34,481 thousand yen in the same period of the previous year). Cash dividends paid amounted to 34,484 thousand yen.

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(Cash flow indicators)

	Fiscal Year	Fiscal Year	Fiscal Year	Fiscal Year	Fiscal Year
	Ended March 31, Ended March 31, Ended March 31, Ended March 31, Ended March 31,
	2020	2021	2022	2023	2024
Capital-Asset ratio（％）	81.0	83.0	78.2	77.9	76.6
Market value-basedCapital-Asset ratio (%)	115.3	204.9	125.9	149.3	166.0
Cash Flow Ratio to Interest-Bearing Debt (Year)	0.1	0.0	0.0	0.0	0.0
Interest coverage ratio (times)	2,002.3	4,179.9	50,250.2	167,084	3,306,566

Capital-Asset ratio: Shareholders' Equity / total assets

Market value-basedCapital-Asset ratio: Market capitalization/total assets

Cash flow to interest-bearing debt ratio: Interest-bearing debt/cash flow

Interest Coverage Ratio: Cash Flow/Interest Payment

Note 1. Indicators are all calculated using consolidated financial figures.

Note 2. Market capitalization is calculated on the basis of the closing price of shares at the end of the fiscal year x the total number of shares outstanding at the end of the fiscal year (after deducting treasury stock).

Note 3. Cash flows utilize cash flows from operating activities in the consolidated statements of cash flows.

Note 4. Interest-bearing debt covers all liabilities recognized in the consolidated balance sheets for which interest is paid. Interest payments are based on interest payments in the consolidated statements of cash flows.

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(4) Outlook

Our outlook for the fiscal year ending March 31,2025 is as follows.

				Profit attributable	Basic earnings per
	Net sales	Operating profit	Ordinary profit	to owners of parent	share attributable
	(Millions of yen)	(Millions of yen)	(Millions of yen)	(Millions of yen)	to owners of the
				parent (Yen)
Forecast (A) for the Fiscal Year	3,119	100	99	67	9.72
Ending March 31, 2025
Fiscal year ending March 31, 2024	2,808	176	208	146	21.17
Results（B)
Increase (decrease) in A-B	311	△76	△109	△79
Percentage change (%)	11.1	△43.2	△52.4	△54.1

In March 2024, the Bank of Japan lifted its negative interest rate policy and decided to raise interest rates for the first time in approximately 17 years since February 2007. The financial authorities have also indicated that they will raise interest rates further if excessive fundamental inflation continues to be observed. In the domestic Japanese real estate market, which is the Group's main business domain, variable interest rate mortgages, which are said to be chosen by 70% of mortgage borrowers, will also be affected, and we believe that the predictability of the future is somewhat more uncertain.

In the real estate market, real estate brokerage and resale businesses rely on flow-type revenues, and so they may be directly affected by interest rate trends. On the other hand, the main users of our SaaS lineup are medium-sized and larger real estate rental management businesses, and since such businesses have a stock-type revenue structure based mainly on monthly management fees, we expect the short-term impact to be limited. In addition, we have been operating without debt since our founding, and have extremely stable operating cash flows based on a solid customer base, so we believe there is no need to worry about the strength of our financial base in the face of rising interest rates.

Therefore, while keeping a close eye on monetary policy trends and real estate market conditions, we would like to see this year of change as a major opportunity and strengthen investments in SaaS development and marketing and sales activities aimed at medium-to-long term growth.

As a market leader in real estate tech, our group will continue to develop our business to further accelerate DX in the real estate market. In particular, we will focus on promoting the introduction of our SaaS to major real estate rental management companies that have previously used on-premisesin-house systems and supporting smooth system operation, resulting in sales growth in both subscription and solution categories.

In terms of SaaS development investment, we will accelerate the pace of product development and improvement and increase the number of development teams to expand our product lineup in order to further accelerate future sales growth. Our company is a vertical SaaS that specializes in fields, and we not only spread our products widely in the industry, but also have a multi-product strategy in order to deeply respond to various business needs within the field and achieve overall optimization for our customers. In the fiscal year ending March 2025, in addition to improving and strengthening

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