Earnings call transcript: Raksul’s Q4 2025 revenue hits record ¥16.1B

Raksul Inc. reported a record-setting fourth-quarter revenue of ¥16.1 billion, marking a 21% annual growth. The company’s strategic expansions and product innovations have contributed to this robust performance, with InvestingPro data showing a strong 22.41% revenue growth over the last twelve months. In the wake of these results, Raksul’s stock saw a 0.73% increase, closing at ¥1,365, giving the company a market capitalization of $542.26 million. According to InvestingPro’s Fair Value analysis, the stock appears to be trading below its intrinsic value. The company has set ambitious targets for fiscal 2026, aiming for revenue growth of 21-24%.

Key Takeaways

• Raksul achieved a record quarterly revenue of ¥16.1 billion.
• Annual revenue and gross profit grew by 21% and 26%, respectively.
• Stock price increased by 0.73% following the earnings report.
• Raksul plans to double its Salesforce in fiscal 2026.
• The company acquired Fusion, enhancing its video creation capabilities.

Company Performance

Raksul’s performance in Q4 2025 was marked by significant revenue growth, driven by strategic acquisitions and product innovations. The company has expanded its service offerings with the launch of Raxle Bank and Raxle Business Mall, contributing to its strong market position. The focus on small and medium enterprises (SMEs) and a growing ecosystem across transaction, finance, and software sectors have bolstered Raksul’s competitive edge.

Financial Highlights

• Revenue: ¥16.1 billion, a 21% increase year-over-year.
• Annual gross profit growth: 26%.
• Annual EBITDA: ¥6.09 billion, exceeding guidance.
• Q4 EBITDA growth: 53%.
• Cash and Equivalents: ¥15.5 billion.

Outlook & Guidance

Raksul has set a revenue growth target of 21-24% for fiscal 2026, with a gross profit growth target of 20-24%. The company aims to achieve an EBITDA of ¥7.2-7.7 billion. Strategic investments in Salesforce expansion and new product development are expected to drive organic growth and ecosystem expansion.

Executive Commentary

Masary Sugiyama, CFO, emphasized Raksul’s ambition to become an end-to-end technology platform for small businesses, stating, "Our aim is to become the end to end technology platform for small businesses." He also highlighted the company’s focus on becoming a central hub for procurement needs, saying, "We’re going to be the go-to place for every procurement need for small businesses."

Risks and Challenges

• Market penetration: E-commerce printing penetration in Japan is only 6%, compared to 30-50% in Europe, indicating a potential growth area but also a challenge in market adoption.
• Competitive pressures: As Raksul expands its ecosystem, it faces competition from established players in transaction, finance, and software.
• Integration risks: The ongoing M&A strategy, including the acquisition of six companies in the past year, poses integration challenges.

Raksul’s strategic initiatives and robust financial performance position it well for future growth, though it must navigate competitive and market penetration challenges. InvestingPro subscribers have access to 8 additional ProTips and comprehensive analysis of Raksul’s financial health, which currently rates as GOOD with an overall score of 2.88. For deeper insights into Raksul’s valuation and growth prospects, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.

Full transcript - Raksul Inc (4384) Q4 2025:

Masary Sugiyama, CFO, Raxle: Hello. Thank you for watching this video. I’m Masary Sugiyama, CFO at Raxle. Today, I wanna briefly go through our fiscal twenty twenty five earnings announcement as well as the budget for the next fiscal year. And here at Raxle, we continue to expand as a platform for small businesses.

Our aim is to become the end to end technology platform for small businesses. And as you can see on the graph on the right, we continue to expand our user base. This is the Raxle IDs. We have exceeded 3,300,000 users at this point. And in terms of revenue, we’re growing various areas.

Our quarterly revenue for q four was 16,100,000,000.0, yet another record setting quarter. And in summary, in terms of the year that ended, we’ve grown 21% in revenue, 26% in gross profit. EBITDA has reached 6,090,000,000.00, exceeding the guidance, that we published in June. And in terms of the fourth quarter, the highlight was the acceleration of organic growth rate in the procurement platform business to about 15.2%. And also within the marketing platform business, we have achieved full year profitability.

And, also, we had some onetime expenses in q four, yet our e EBITDA for the quarter has grown about 53% within the quarter. And in terms of the next twelve months, in terms of the fiscal year July 2026, what I wanna tell you is that we are investing in growth. I’ll go through a slide later, but we think we’re ready to invest into growth as a platform. So the revenue that we’re shooting for is 21 to 24% growth year over year. And in terms of the organic growth, you can see around the the bottom middle part of the document, whereas we grew 14% organically in revenue last year, we’re going to be aiming for 16.6 to 19.8% growth in terms of revenue.

Gross profit, roughly in line with that. On the other hand, in terms of EBITDA, we’re not gonna be going for a big margin expansion this year. Some of the margin expansion will be reinvested into marketing, reinvested into technology, and reinvested into Salesforce and additional services. So we will try to create a next angle, next curve in terms of growth while we invest reinvest some of the margin expansion back into our business. This is, the track record for growth, since, going public.

So far, we’ve grown 27% in revenue, higher growth rates, in terms of profits. And at this point, we have been, aggressively acquiring companies in the peripheral area, while, utilizing leverage. However, our net debt to EBITDA ratio continues to be at around 0.26%, so there’s plenty of room for further, investment. And this year, we’re going to be picking up the growth rate a little further in terms of profits and gross profit. And this is the the rule of 40, summary of what we’ve done so far.

In 2025, our gross profit growth was at 26%. Our EBITDA margin versus the gross profit was 28%. So in light of things like rule 40, we’re exceeding 50% in that sense. And this is the highlight of the financials for the year. This year, we’ll be paying a dividend of 3 yen per share as per guided in June.

And this is the revenue growth so far, throughout the year. We have grown in all segments, and we are diversifying away from printing and solutions, while the printing business itself continues to grow, plus 10 plus percent, throughout, the quarters, throughout the year. And in terms of our gross profit, we continue to expand our GP margin, this year. So within the procurement platform business, we saw scale kicking in and also further internalization of manufacturing. And things like digital printing and some of the novelty categories have contributed to higher gross profit margin.

So we guided for 30 to 33% GP margin for the longer term in the procurement platform business. We’re pretty much at the higher end at this point. And in terms of the marketing platform business, our exposure to software continues to expand as opposed to advertise advertising agency business. So we’re now revising our medium term guidance here from 50 to 60% to about 55 to 65% up in this business. And this is the trend of our EBITDA and also the JGAP operating profit.

This year, we tried to find investment opportunity for to to grow as the platform throughout the year. So as opposed to last couple of years where we invested more in the q four, This year, we invested throughout the year. So you’re seeing a little less volatility in terms of quarterly profits. However, we have maintained a course of a good, worldwide growth rate throughout every single quarter. And this is our cost structure.

In the fourth quarter, we had about 200,000,000 yen of onetime expenses related mainly to our m and a activities. And, also, this is the season where we are paying our bonuses as well as we’re hiring a lot of new Salesforce. So this is a bit of a cost heavy quarter. However, we continue to expand in terms of margins. And going into specific businesses, procurement platform business continued to grow very steady.

So, GP margin for the q four is up by about 1.7, percentage points, versus the previous year. As I mentioned earlier, the larger scale internalization has factored into profitability. In terms of the organic growth rate for this business, q three was around 13% year over year. Q four was around 15.2%. Multiple things like accelerating direct mail solutions, enterprise, and also generally improving customer acquisition trends across ecommerce businesses have contributed to better organic growth rate over the quarter.

And this is where our user base is. We’re at 3,300,000 users. And this time, we have started providing a per company analytics as well. So I’ll through that later. And this is our usual KPIs.

In terms of our user base, the RackSol ID purchasing users have grown by about 37% this quarter. Organically, that represents an 8.2% growth. In terms of average revenue per order, we’ve grown by 2%. Average number of purchases per user have grown by about 4%, all combining to about 15% organic growth rate in the quarter. And this is the per company analysis we started from this quarter around.

As we’re building the bank’s business and as we focus more on the larger enterprises, instead of focusing on user activity by every single ID, which we still do, we’re adding a new angle. We’re looking at our customers by companies instead of every single ID. This is what what it looks like. On the right, we have the cohort analysis depending on which year your company has registered on Raxo. We’re splitting up the revenue by the year of registration.

What you see on that graph on the right is basically that every year, the existing customers are purchasing more items from Raxle. So someone from department a refers to department b, or a customer buying one product starts to buy different products, perhaps with different employee IDs. But in terms of the company exposure to Raxo, every year, your business is growing with Raxo. The graph on the left shows average purchases per year by company in the bar graph, and, also, the, the line graph, basically shows how many services that we offer. We offer nine services under the Raxo umbrella.

And within the nine services, this is the average number of services that each company is using. What you see here is a growing trend of average purchase purchase amount per year as well as we’re seeing growth in number of services that companies are using. So once we acquire a new user, a company, we see a trend where companies are purchasing more different categories of products. And as a result, they’re purchasing more in amounts from Raxo at the same time. And what you’re seeing is that every year, the existing customers are driving decent amount to revenue growth.

And now focusing turning our attention to some of the larger companies. As you’ve seen in the previous few quarters, Raxle Enterprise has been a big growth driver, for Raxle. So including Raxle Enterprise, this this Raxle service to larger companies, represents about 6,900,000,000.0 yen, of revenue, around 12% of our total revenue. So this is a very important business to us, and this is a very high growth part of our business. You’re seeing very good, user metrics.

The graph on the left shows you the same average purchases per company, for companies exceeding 500 employees. So every year, companies with more than 500 employees are purchasing around 1,000,000 yen worth of products from Raxle. And in terms of the net revenue retention rate, this is a staggering a 130% in the last year. Even there, even for the last several years, it’s never been below a 120%. A very good a very healthy, user metric that we’re seeing from some of the larger, customers.

And the core of this larger customer strategy is our Raxo enterprise, which is a semi customized sales led ecommerce activities for larger customers. And yet again, we have seen a 100% year over year growth within this business line, and we continue to see both the user base growth and also the growth from existing user spend as well. And moving on to the marketing platform business. Here, basically, what I wanna say is that for, the first time, despite, investments, we have seen four year profitability, in terms of EBITDA, for this business for the twelve months. Fourth quarter was a slight loss.

This is partly due to onetime expenses, but the profit structure, the cost structure for this business has improved significantly. And from next year onwards, when you see revenue growth in this business, we are we can assure you that this will see profit profit growth at the same time as well. This is the key metrics for the marketing platform business. We continue to see sequential growth of the SaaS business and also the marketing for marketing business for SMEs. The advertising agency business continues to have a little bit of volatility, but with introduction of artificial intelligence, we are now automating a lot of process of making proposals for, medium enterprise companies.

So the focus is changing a little bit, and there’s going to be more synergy with existing Raxle user base as well. And this is a company that we acquired, within the marketing platform business, Fusion. The company specializes in video creation, for SMEs online. This company plays within the growing Internet video advertising business, and this will be part, of the marketing platform business. And this is the track record, for m and a, all over the company.

This year, the past year that ended, we have acquired total of six companies. And over the last two years, we have spent 6,000,000,000 yen into acquisition, and the average EBITDA AB to EBITDA multiple is, around four times, range. And this is what our balance sheet looks like today, 15,500,000,000.0 of cash and equivalents, and also at the same roughly similar amount of debt, on the other side, bringing us to a net debt of about 1,570,000,000.00. Despite, the consecutive investments that we have seen, our cash generation continues to be very strong. So, while while we invest, we have been creating cash, in our operating businesses as well.

And this is a review on the capital allocation that we mentioned, back in 2024. So this was a plan for, capital allocation between 2024 to twenty twenty twenty eight, so basically five years. And so far, we have gone through two of the five years. And we’re here. We’re basically saying we’re going to either earn or borrow about 50,000,000,000 yen, and we’re going to invest or return around 50,000,000,000 yen as well.

So so far, what happened is that we have either financed or earned around 20,000,000,000 in the last two years. In the meantime, we have invested around 17,000,000,000 up until this point. So we are tracking relatively well against the capital allocation plan. We continue to see a lot of m and a opportunities around us, so we will continue to to exploit. We’ll continue to shoot for the best acquisition deals, accelerating the platform’s value.

And this is the cash flow trend for the last few years. We have since 2022, we have gone to our quality growth phase where we earn cash and also deploy as well. So that balance has been going well. And, also, our EBITDA to operating cash flow conversion has been relatively steady. Basically, our EBITDA minus tax is operating cash flow.

So highly cash flow, cash generative business and good deployment of capital has been going on as well. And now moving on to what we’re thinking for fiscal July twenty twenty six, and here’s the plan. So the revenue wise, we’re going to grow by about 21 to 24%. Gross profit wise, we’re going to grow from 20 to 24% as well. EBITDA, 7.2 to 7,700,000,000.0.

So you’re seeing roughly similar range of growth between revenue to EBITDA line. Operating profit and below, the growth rate varies a little bit, but essentially same trend from EBITDA downwards as well. And in terms of what we’re looking at for the first quarter, operating gross profit growth, we’re expecting around 18% for the procurement platform. And we accept expect as we invest into marketing, ID integration, coupons, cross selling, we expect acceleration of growth towards the end of the year. And in terms of marketing platform business, there’s a bit of a a volatility, but around 30% growth within the business.

In terms of first quarter EBITDA, we’re expecting roughly similar, number to the year before, partly because we’re going to be frontloading investments into the early parts of fiscal twenty twenty six. And this is what our plan for this year compares against the medium term plan that we provided back in 2023. So we’re expecting 26 to 27,000,000,000 in this year’s gross profit versus 30,000,000,000 that we’re expecting in 2027. So we’re tracking pretty well against this one. And in terms of EBITDA, we’re expecting, 7.2 to 7.7 versus 10,000,000,000 in 2027.

We think this is tracking well, and this is a particular year where we invest. And we believe that next year onwards, some of these investments will return, to margin expansion. Hence, 10,000,000,000 to us at this point, sounds quite feasible. We’re on a good track against, this target number. And in terms of the initiatives for 2026, there’s two things that’s important to us.

One is accelerating organic growth. Two is expanding the ecosystem. I’ll go by one one by one. In terms of accelerating organic growth, there are two things that we’re seeing that warrants additional investments. One is that we have realized that our users are using more services from us every single year.

The graph on the left shows you how corporate users and individual retail users are, using our platform. So out of the nine services, the corporate users have grown every year in terms of number of services that they use, on Raxle platform. This warrants that adding new services, adding new features, integrating integrating IDs are working, in times of encouraging users, to purchase more from Raxle, especially for corporate users. The graph on the right, is the same graph that I showed you earlier about the growth of the Raxle enterprise. By employing Salesforce, by encouraging customization and, providing guidance, we’re unlocking, greater value, from our larger corporate user base.

So there are two things we’re gonna do, to accelerate organic growth. One is to invest into, user interface and campaigns and marketing to to encourage cross selling within the ecommerce relating to the graph on the left. The other one is investing into Salesforce. We’re going to double, the size of our Salesforce this year, whether it be Ruxo Enterprise, Direct Mail, or some of the marketing businesses. We’re going to be investing extensively into Salesforce personnel.

The other focus, for fiscal twenty twenty six is launching new products, in order to expand the ecosystem. There are a few services that we announced recently. One is Raxle Bank, which is coming out within this year. This is going to be the most frictionless digital banking experience for corporates in Japan. We’re going to provide lowest transfer fees in the industry.

We’re going to provide 2%, loyalty points back, with debit cards. And also future services, we’re still considering, but we’re thinking about things like corporate credit cards and cash flow management solutions. And then the other one is Waxle Business Mall, which we announced today. This is a general ecommerce, site with half a million products offered, and we are going to be become a go to place for every procurement needs for small businesses. And the third one is something we announced yesterday, digital signage, service.

So we have managed to network over 300,000 digital signage displays across Japan, and we have made small investment into a geolocation company called Crosslocations, and we can provide a very good visualization of how foot traffic data, relates around, digital signage. So this is a very data driven, first time first in the industry, type of digital signage business that we’re going to be launching. And lastly, in terms of our future direction and what our competitive edge are, this is what we think, Raxle’s competitive edge are. Our edge is business model, the size of the market, where we are positioned with small customers, our organization technology, and also lastly, m and a and execution. And briefly going through the business model, we have the users on the left, millions of Raxo ID users who are using our services on a day to day basis.

And we have a variety of products right in the middle, and then the supplier network basically provides a crucial and very defendable business to these small businesses. And, basically, the the value creation how the value creation works is that, with more services being offered, this warrants more transactions and improved productivity for our suppliers and improvement in quality, which leads to additional improvement and increase in number of users. This is the cycle, that we have been revolving for the last fifteen plus years, and this has been going around stronger than ever at this point. And in terms of the size of the market, we have been facing increasingly larger markets by expanding our businesses horizontally. In terms of transaction, we see the total addressable market around our business to be around 7,900,000,000,000.0 yen.

This is expanding every year because we’re expanding our product lineup. And in terms of the software business, same can be said, as we expanded from simple advertising agency business to automation, digital advertising, we’re facing a larger and larger market. And in terms of additional services that our small customers small business customers may use, there’s plenty of businesses that serves day to day needs of SMEs. And in terms of our dominance in the digital space and also the TAM ex potential for TAM growth here, Currently, the ecommerce penetration of printing, stays at around 6% here in Japan, whereas the same number is around thirty thirty to 50%, in parts of Europe. So we see while it takes time, we see plenty room for digital transformation within the markets that we’re facing, and same can be said for a lot of other categories of products that we serve, where we have seen we have been seeing, superior, market CAGR over the last few years.

And in terms of our customer base, we continue to have a very strong footing within the SMEs. And, also, what we’ve been finding out is that we also have a very strong footing as well in the medium to slightly larger companies as well. And how we fight in the market is that with is through our strength in technology, operation, and also marketing. And technology continues to be a very important part of our core competence. Last time we published this this slide, we talked about our focus being the user ID and payment integration.

That is somewhat complete, although there are still work to be to be done. At this point, our focus in technology is to make sure making sure that our financial platform, comes out, to be to be extremely good towards the end of this year. And in terms of m and a’s, we continue to review a lot of deals. We have multiple LOIs outstanding at this point. And acquisition activities for us, the focus is two things, buying products in the peripheries, that also our small business customer base wants to purchase and also vertical integration.

And for the companies that we have acquired, we have successfully completed PMIs. This is an example for companies that we acquired in 2024. This is an index, and it’s an EBITDA, representing an EBITDA. So if we take EBITDA for the companies that we acquired in 2024, let’s say it was a 100 before our acquisition. Today, the same number is around a 180.

So we’ve seen 80% increase in the EBITDA of the companies that we have acquired. This is mainly through organic growth and also unifying back office, improving marketing, improving productivities. And, also, in addition to that, the companies that we have acquired have contributed to internalization of manufacturing process, for a lot of Raxall businesses. So in addition to that, there’s another 90% worth of profit contribution from the companies that we have acquired. So, essentially, the companies that we acquired with a profit of a 100 now contributes to about three times that, to the group wide profitability.

And in the longer term, this is what we want to be. This is a slide that we share every time. So we want to become a platform that evolves around transaction, finance, and software. And, what we feed into it is the data, our customer base, and also growing GMV in transaction. Raxle ID is at the very center of it, and our aim is to become an end to end technology platform, for small businesses.

And this is the continuation of, how our profit growth is going to be driven by. And that’s it. Thanks for watching this video. If you have any questions, please reach out to ir@raxle.com. We’re happy to help you, set set up meetings.

Any questions, please let us know.

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