FAQ (Search categories)

FY08/21_Q2

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• Why did the operating profit in first half of FY08/21 exceed the forecast? Also, why did the company not revise up its full-term forecast?

  The overshoot in operating profit is mainly attributable to receipt of the Employment Adjustment Subsidy, which was booked as non-operating income. Since the subsidy is a one-time payment, and also in light of the uncertainties due to the recent situation, we have kept the full-term forecast unchanged.

• How many new graduates did the company hire? What is the ratio of new graduates within total new recruitment?

  We hired 61 new graduates. However, mid-career recruitment accounts for more than 90% of those that we recruit, as we actively recruit experienced workers.

  Please follow the link for the number of new graduates that we hired in previous years.
  https://en.shiftinc.jp/ir/esg/performance/

• Are there any seasonal factors relevant to earnings in Q2 FY08/21?

  There are no particular seasonal factors relevant to Q2 earnings.
  However, there is seasonality in the sense that we see a peak in net sales during Q3 (March-May) at the SHIFT Group given that, for most of SHIFT’s customers, fiscal year end falls in March.

• How is it possible to execute M&A transactions at a discount?

  Because we focus on post-merger integration, we have successfully built a track record of proven growth by companies that join the SHIFT Group, and as this reputation has grown, owners have often approached us to take over their businesses. Thanks to this, we have often been able to execute M&A activity at a discounted acquisition price.

• What is the main business of A-STAR Co., Ltd.?

  A-STAR runs a platform that matches freelance engineers to software development projects. In addition to this, A-STAR operates owned-media, mainly focusing on companies that are growing fast. The synergy between the matching business and the media business has enabled A-STAR to achieve accelerated growth. It aims to “be a company that always supports IT professionals, makes the greatest contribution to reform of the way that IT professionals work, and also grows with them.” The company also aims to make the greatest contribution to the “IT freelance revolution.”
  For more information, please follow the link.
  https://en.shiftinc.jp/news_en/announcement-of-acquisition-of-a-star-co-ltd/

• What is meant by “the infrastructure domain”? What were the factors behind its growth?

  The term refers to the overall infrastructure required for software development, including platform grand design, database, middleware, OS, server, and terminal. As the scope of service has expanded on a group-wide basis through M&A activities, it has become possible for the group as a whole to provide an infrastructure service, regardless of the type of cloud service.
  Please refer to Q2 FY08/21 results presentation material for details.
  https://contents.xj-storage.jp/xcontents/AS95685/8ecf6051/c223/426b/8a31/43f7c66a606a/20210408201910247s.pdf

• Is it correct to understand that the company is considering a new equity finance?

  To further accelerate our future growth, we are considering a wide range of financing options, including debt as well as equity.

• What is the operating structure of the company as of Q2 FY08/21?

  Under the leadership of Vice President Sasaki, who assumed his role in November 2020, we will continue to strengthen our sales structure.
  Up until Q1 FY08/21, we worked on the visualization of current sales activities as well as “quantity” expansion with the aim of improving basic strength. In Q2, we are working on enhancing the “quality” of the sales in order to maximize productivity. The fact that many of our employees previously worked in corporates (customers side) enabled us to thoroughly identify and list SHIFT’s issues and challenges from the customer’s perspective. And, using roleplay based on countermeasures to those issues and challenges, we are working on improving the “quality” of sales.

• Why did gross margin improve in Q2 FY08/21?

  The improvement in gross margin is attributable to the improvement in utilization rate. There had been a drop in utilization rate due to the COVID-19 pandemic, but the utilization rate picked up from February 2021 thanks to staffing activities and the increase in demand. The utilization rate improved by 5.7pt in February 2021 compared to Q4 FY08/20.
  Please refer to the FY08/21 Q2 results presentation materials for more details.
  https://contents.xj-storage.jp/xcontents/AS95685/8ecf6051/c223/426b/8a31/43f7c66a606a/20210408201910247s.pdf

• What was the progress rate in recruitment against target as of Q2 FY08/21?

  Recruitment activities have been progressing steadily.