Pixie Dust Technologies(PXDT) - 2024 Q4 - Annual Report

Financial Performance - For the fiscal year ended April 30, 2024, the company generated revenues of ¥993,021 thousand ($6,303 thousand), an increase from ¥704,712 thousand in the previous year, representing a growth of approximately 41%[393] - The company incurred net losses of ¥1,974,536 thousand ($12,534 thousand) for the fiscal year ended April 30, 2024, compared to a net loss of ¥1,965,491 thousand in the previous year[393] - Total revenue increased by 40.9% from ¥704,712 thousand for the fiscal year ended April 30, 2023 to ¥993,021 thousand ($6,303 thousand) for the fiscal year ended April 30, 2024, driven primarily by a ¥340,205 thousand increase in product revenue[410] - Net loss for the fiscal year ended April 30, 2024 was ¥1,974,536 thousand ($12,534 thousand), slightly improved from a net loss of ¥1,965,491 thousand in the previous year[421] Revenue Sources - Product revenue accounted for 53% of total revenue for the year ended April 30, 2024, indicating a significant shift towards product sales as a revenue source[393] - Product sales accounted for approximately 53% of total revenue for the year ended April 30, 2024, indicating a strategic shift towards commercialization[420] - Revenue from product sales for the year ended April 30, 2024, was primarily generated from three products: kikippa, SonoRepro, and iwasemi, with revenue recognized at the point of delivery[444] - The company recognizes revenue from solution services, including hackke and VUEVO services, based on distinct performance obligations, with revenue recognized at the time of delivery for products and monthly for services[449] Product Development and Launches - The company launched three personal care products in Japan: SonoRepro in November 2022, VUEVO in March 2023, and kikippa in April 2023, focusing on enhancing personal care and quality of life[390] - In the Workspace & Digital Transformation field, the company launched iwasemi in July 2022 and conducted a soft launch in the U.S. in March 2023, with plans to expand its market presence[391] - The company plans to focus on marketing and expanding features of its existing products while commercializing new products, particularly in Japan[392] - The commercialization of wave control technology and related products is expected to drive future revenue growth, with a focus on expanding sales of kikippa, SonoRepro, VUEVO, and iwasemi[401] Expenses and Financial Challenges - Cost of products surged by 271.8% from ¥77,035 thousand to ¥286,428 thousand ($1,818 thousand) due to expanded sales of new products launched since April 30, 2023[412] - Research and development expenses decreased by 25.3% from ¥686,557 thousand to ¥512,997 thousand ($3,256 thousand) as focus shifted from R&D to product commercialization[412] - Selling, general and administrative expenses rose by 16.2% from ¥1,856,056 thousand to ¥2,155,860 thousand ($13,684 thousand), primarily due to increased marketing and personnel costs[413] - The company anticipates increased general and administrative expenses due to costs associated with being a public company, including hiring and compliance-related expenses[407] Cash Flow and Liquidity - Cash and cash equivalents decreased from ¥2,135,513 thousand as of April 30, 2023 to ¥1,607,763 thousand ($10,205 thousand) as of April 30, 2024, indicating liquidity challenges[418] - The company plans to raise additional capital through equity or debt financing to address liquidity needs and support ongoing operations[424] - For the year ended April 30, 2024, net cash used in operating activities was ¥2,090,202 thousand ($13,268 thousand), an increase from ¥1,813,442 thousand in 2023, primarily due to a net loss of ¥1,974,536 thousand ($12,534 thousand) adjusted for non-cash charges[429] - Net cash used in investing activities increased to ¥183,911 thousand ($1,167 thousand) in 2024 from ¥89,284 thousand in 2023, mainly due to lease improvements for the new headquarters and increased acquisitions of property and equipment[430] Corporate Governance - The company’s board of directors includes members with diverse backgrounds in technology, finance, and medicine, enhancing strategic decision-making[465] - The board consists of 5 directors, with 1 female and 4 male members, reflecting a commitment to increasing diversity[478] - The company has not adopted a formal board diversity policy but is committed to considering diversity in future director searches[478] - The corporate governance structure includes a separate board of corporate auditors, with a maximum of three auditors, all of whom must meet independence requirements under the Companies Act[498] Stock and Compensation - Total remuneration for executive directors amounted to ¥45,283,600 ($287,442) for the fiscal year ended April 30, 2024, with 4 individuals in this category[481] - Outside directors received a total of ¥2,400,000 ($15,234), with 2 individuals in this category[481] - Outside corporate auditors received ¥9,840,000 ($62,460), with 3 individuals in this category[481] - The company’s stock-based compensation includes stock options, with expenses recognized over the requisite service period[454] Risk Factors - The company is exposed to foreign exchange risks, particularly with expenses primarily denominated in Japanese yen, which may increase as international sales grow[577] - Credit risk is primarily associated with trade receivables, and the company performs ongoing credit evaluations of customers[579] - The company has not experienced significant credit losses historically, but certain customers represent over 10% of total revenues, posing a potential risk[580] - As of April 30, 2024, the company's borrowings were only at fixed rates, exposing it to fair value interest rate risk[582]