Money Forward, a Japanese financial technology company, held a financial results briefing for the third quarter of the fiscal year ending November 2024 on October 15, 2024. The company provided an upbeat outlook for the quarter, highlighting strong performance across several key metrics, including steady progress in sales and EBITDA. , the quarter’s EBITDA surplus continued and the SaaS business grew steadily.
strong overall performance
Money Forward delivered solid performance overall in the third quarter, with both sales and EBITDA showing steady progress toward achieving full-year forecasts. Notably, the company maintained a positive EBITDA for the quarter, strengthening its financial stability. This positive momentum is due to strong growth in both the home and business domains, especially SaaS businesses.
Consolidated sales and EBITDA results
Consolidated sales for the third quarter were 9.81 billion yen, an increase of 31% compared to the same period last year. This growth was primarily driven by business areas, with sales increasing 35% year-on-year. However, it is important to note that sales in the third quarter were slightly lower compared to the previous quarter due to the absence of proceeds from the sale of HIRAC FUND, our venture capital business, recorded in the previous quarter. Excluding this one-time impact, consolidated sales continue to show an increasing trend.
EBITDA for the third quarter was 410 million yen, and gross profit was 6.53 billion yen. The company emphasized that its EBITDA margin has significantly improved from approximately -30% in 2022 to nearly 20% in the previous year, and is in a positive trend. Management expressed confidence in achieving a 10-15% improvement in EBITDA margins this year and continuing this positive trajectory in the future.
SaaS business: key growth driver
The SaaS business emerged as a key growth driver for Money Forward, with SaaS ARR reaching JPY 27.96 billion, up 32% year-on-year. This growth was completely organic and was driven by strong performance in both enterprise and individual user segments. In the business domain, corporate ARR recorded 35% year-on-year growth, and in the individual user segment, it recorded 41% year-on-year growth. This positive momentum is a testament to the company’s strategy of focusing on product development and customer acquisition in the SaaS space.
However, the Money Forward X business, which focuses on subscription services with financial institutions, remained flat compared to the previous quarter. This was due to the difficulty of joint sales with regional banks due to the rising interest rate environment. The company expressed its determination to overcome these challenges by leveraging various strategies and measures to restore growth in this sector.
Main initiatives and future prospects
Money Forward has outlined several key initiatives aimed at further strengthening its market position and driving future growth. These efforts include:
Improving the user experience with continuous feature updates: The company is committed to improving the user experience by introducing new features and improving existing features. This includes leveraging generative AI to automate tasks, integrate with external services such as tax preparation software, and provide enhanced data visualization and reporting capabilities. Expansion to companies with more than 300 employees: Money Forward is actively expanding its customer base to include larger companies. The company achieves this by developing features tailored to the needs of large enterprises, accumulating knowledge in the medium-sized enterprise space, and providing dedicated customer support to new and existing users. Deploying a flexible, scalable, and configurable ERP model: Money Forward focuses on providing flexible and scalable ERP solutions that easily integrate with your existing systems. This allows customers to implement individual functions as needed and gradually add new functions, reducing the implementation burden and increasing flexibility. Reorganization of financial services to strengthen SaaS/Fintech strategy – Money Forward announces reorganization of financial services to further accelerate SaaS x Fintech strategy. The purpose of this reorganization is to integrate financial services into Money Forward Kessai Co., Ltd., with sales and marketing operations being handled by Money Forward. The move is expected to streamline operations and enhance customer reach.
Partnered with Sumitomo Mitsui Card (SMCC)
Money Forward highlighted its strategic partnership with Sumitomo Mitsui Card (SMCC) in the household business. The company established a joint venture with SMCC to combine the popular personal finance management service “Money Forward ME” with SMBC Group’s financial services “Olive” and “V Point.” This partnership is expected to provide more personalized and convenient financial services for users and increase Money Forward’s presence in the personal finance market.
financial outlook
The company has reiterated its full-year outlook for FY11/2024, predicting that the ratio of advertising expenses to sales will be 15% to 17%, and that the EBITDA margin will improve by 10% to 15% compared to FY11/2023. Money Forward also emphasized its medium- to long-term goals of achieving sales of over 100 billion yen and EBITDA of over 30 billion yen by 2028.
Overall, Money Forward provided an upbeat outlook for the third quarter of the fiscal year ending November 2024, highlighting strong performance in key areas such as its core SaaS business and strategic partnerships. The company’s continued focus on innovation, customer acquisition and operational efficiency positions it well-positioned for sustained growth in the rapidly evolving fintech environment.
