Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>Money Forward reported 3QFY11/2022 results. Revenue increased 42.2% YoY to JPY5.45bn (vs consensus JPY5.40bn) while adjusted op.losses further widened to JPY2.5bn vs JPY449m in the same period a year ago.</li>
<li>Though top line growth has resumed following a slowdown in 2QFY11/2022, MF’s margins have further worsened with increased investment in advertising, staff and subsidies.</li>
<li>MF’s share price fell almost 8% following earnings announcement as investors are concerned over deteriorating profitability.</li>
</ul>


Money Forward reported 3QFY11/2022 results. Revenue increased 42.2% YoY to JPY5.45bn (vs consensus JPY5.40bn) while adjusted op.losses further widened to JPY2.5bn vs JPY449m in the same period a year ago.
Though top line growth has resumed following a slowdown in 2QFY11/2022, MF’s margins have further worsened with increased investment in advertising, staff and subsidies.
MF’s share price fell almost 8% following earnings announcement as investors are concerned over deteriorating profitability.


Money Forward: Top Line Beats Consensus but Losses Widen Further

Japan Specialist

Mark Chadwick

<ul>
<li>Money Forward Q3 sales rose +42% YoY to Y5.5bn driven by corporate ARR (+54% YoY)</li>
<li>Net sales, ARR, and EBITDA loss of -Y1.9bn all in line with company guidance</li>
<li>Growth investment starting to pay off as Corporate Client acquisition rate DOUBLES</li>
</ul>


Money Forward Q3 sales rose +42% YoY to Y5.5bn driven by corporate ARR (+54% YoY)
Net sales, ARR, and EBITDA loss of -Y1.9bn all in line with company guidance
Growth investment starting to pay off as Corporate Client acquisition rate DOUBLES


Money Forward (3994) | Major Improvement in Corporate Client Acquisition

Telco/Internet specialist

Kirk Boodry

Redex Research

<ul>
<li>Revenue growth rebounded in Q4 and was the best in six quarters as corporate sales accelerated, particularly in the medium business segment</li>
<li>But EBITDA losses accelerated and whilst management says this is the peak quarter, this is the first time since 2019 that EBITDA excluding advertising costs was negative</li>
<li>Guidance for Q4 is mixed with a conservative revenue target and a only a modest reduction in EBITDA losses</li>
</ul>


Revenue growth rebounded in Q4 and was the best in six quarters as corporate sales accelerated, particularly in the medium business segment
But EBITDA losses accelerated and whilst management says this is the peak quarter, this is the first time since 2019 that EBITDA excluding advertising costs was negative
Guidance for Q4 is mixed with a conservative revenue target and a only a modest reduction in EBITDA losses


Money Forward - Q3 22 Results Reaction: Revenue Is Growing but so Are EBITDA Losses

<ul>
<li>Freee reported 4Q and full-year FY06/2022 results. 4Q revenue increased 31.2% YoY to JPY3.87bn (vs consensus JPY3.9bn) while full-year revenue grew 40.2% YoY to JPY14.4bn beating own guidance by 0.2%.</li>
<li>Operating losses decreased to 18.7% of total revenue from 32.5% of revenue in the same period a year ago. Full-year OP. losses were 15.7% of revenue vs guidance 17.1%.</li>
<li>Improvement in profitability was driven by growth in ARPU from mid-and-large paying users.</li>
</ul>


Freee reported 4Q and full-year FY06/2022 results. 4Q revenue increased 31.2% YoY to JPY3.87bn (vs consensus JPY3.9bn) while full-year revenue grew 40.2% YoY to JPY14.4bn beating own guidance by 0.2%.
Operating losses decreased to 18.7% of total revenue from 32.5% of revenue in the same period a year ago. Full-year OP. losses were 15.7% of revenue vs guidance 17.1%.
Improvement in profitability was driven by growth in ARPU from mid-and-large paying users.


Freee: Medium-Term Plan Seems Attainable but Profits to Delay

Thematic (Sector/Industry)

<ul>
<li>The Nikkei was up 0.6% last week (-2.1% YTD) while the yen weakened 1.2% to 135/$ </li>
<li>Prime Minister Kishida met with US House Speaker Nancy Pelosi. China cancelled a meeting between the Foreign Ministers of Japan and China.  </li>
<li>Record high temperatures of 40c, record high Covid cases, 575k people evacuated due to torrential rain &amp; flooding.....keep calm and carry on.</li>
</ul>


The Nikkei was up 0.6% last week (-2.1% YTD) while the yen weakened 1.2% to 135/$ 
Prime Minister Kishida met with US House Speaker Nancy Pelosi. China cancelled a meeting between the Foreign Ministers of Japan and China.  
Record high temperatures of 40c, record high Covid cases, 575k people evacuated due to torrential rain &amp; flooding.....keep calm and carry on.


Japan Stocks on the Move | Money Forward, Monotaro, CyberAgent

Japan

Money Forward, Inc. develops mobile application software. The Company produces automatic household account book softwares, household account book application softwares, and other products. Money Forward also provides personal financial management, cloud based accounting solutions, and other services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Money Forward (3994 JP)

Money Forward: Top Line Beats Consensus but Losses Widen Further

Though Money Forward's top line continues to expand, losses have further widened as the company invests heavily on advertising, subsidies and...

Shifara Samsudeen, ACMA, CGMA

Money Forward (3994) | Major Improvement in Corporate Client Acquisition

Money Forward Q3 sales rose +42% YoY to Y5.5bn driven by corporate ARR (+54% YoY). Market may dislike the EBITDA loss, but that is backward...

Mark Chadwick

Money Forward - Q3 22 Results Reaction: Revenue Is Growing but so Are EBITDA Losses

Revenue growth rebounded in Q3 helped by robust sales to medium-sized businesses and record new corporate customer adds but EBITDA losses remain a...

Kirk Boodry

Freee: Medium-Term Plan Seems Attainable but Profits to Delay

freee's medium/long-term plan is likely to further impact the company's profitability as it seeks for aggressive user growth. We think the plan is...

Shifara Samsudeen, ACMA, CGMA

Japan Stocks on the Move | Money Forward, Monotaro, CyberAgent

The Nikkei eked out a small gain last week despite negative macro conditions. 3 stocks in particular performed very well - MoneyForward, Monotaro,...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)