SOURCENEXT reported a preliminary operating profit of ¥204mn for July to September, against a ¥307mn operating loss a year earlier on an adjusted basis. The company said it is the first quarterly operating profit in 20 quarters.
Quarter versus nine months
The quarter does not erase the year to date. For January to September, SOURCENEXT expects sales of ¥8.48bn, down 2.8% on the adjusted prior-year period, and an operating loss of ¥601mn, narrowed from ¥2.32bn. The nine-month ordinary loss is ¥847mn and the net loss attributable to owners of the parent is ¥720mn.
Quarterly sales were ¥3.11bn, down 3.0% on the adjusted year-earlier quarter. The prior-year comparisons are adjusted because the company moved its year-end from March to December.
Where the improvement came from
SOURCENEXT credits the overseas business of its subsidiary Pocketalk, which moved to an operating model focused on profitability. Pocketalk's July-September operating profit improved by ¥151mn at its US entity and ¥56mn at its European entity, ¥207mn combined. September operating margins were 31.8% in the US, a record, and 26.7% in Europe.
The company also named stronger sales and better margins on the Pocketalk Sentio AI interpretation series in Japan and abroad, higher orders for its main PDF software and continued fixed-cost reviews. Pocketalk's own consolidated operating result turned positive in September alone.
On the nine-month figures, the company points to the absence of a write-down on older Pocketalk devices, which it booked in the prior year.
Below the operating line
The quarterly ordinary profit was ¥20mn after an equity-method investment loss of ¥75mn and a foreign-exchange loss. The company also booked a ¥43mn special loss for contract cancellation, tied to a review of a Pocketalk product development plan. Quarterly net profit attributable to owners of the parent was ¥55mn, against a ¥120mn loss a year earlier.
The figures are preliminary, based on tallies to date, and actual results may differ. SOURCENEXT said it will give formal results on 13 November.