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• Company Background & Core Differentiators

  • Open Up Group was formed in April 2021 from the merger of former Yumeshin Holdings (construction dispatch leader with IT focus) and former Binex Group (mechanical/electrical engineer dispatch leader with IT focus), united by shared people-centric, engineer-first values.
  • Three key differentiators from competitors: (1) Creates engineers from inexperienced candidates (most competitors compete for experienced engineers); (2) Engineer-first business model that sources roles aligned with engineer career goals, rather than matching engineers to pre-existing client requests; (3) "Graduation Model" that encourages and supports engineer transfer to client companies, earning placement fees for successful transfers (473 engineers transferred in the 2024 June fiscal year).
  • Growth has been driven by the focus on inexperienced hiring and active M&A, allowing the company to avoid the tight market for experienced engineers that has constrained competitors.

• Operational Model

  • Inexperienced candidates reach mid-level engineer status in as little as 1 year through a customized blended Off-JT/OJT upskilling model, with on-demand retraining and reskilling available to already placed engineers to boost skills and bill rates. IT infrastructure engineering is prioritized as an accessible entry point for inexperienced/liberal arts candidates that still offers competitive compensation.
  • Revenue is calculated as (number of engineers) × (utilization rate) × (average client bill rate). Utilization rate is the core profitability KPI because all engineers are full-time employees, requiring salary payment even when idle.
  • The company has a negative working capital structure, which generates strong, consistent free cash flow that can be allocated flexibly to growth investments or shareholder returns.
  • Cash allocation priorities are: organic growth investment, M&A investment, and shareholder return.

• The company maintains its medium-term management plan targets of 10%+ annual growth for revenue and operating profit, 10%+ operating margin, 10%+ annual growth in domestic engineer headcount, continued investment in employee training, and ongoing active M&A.
  • Full-year 2025 June fiscal year guidance is maintained at 185 billion yen revenue and 15.5 billion yen operating profit, with management confirming the company is on track to meet these targets based on third quarter results.
  • Shareholder return guidance is maintained: 50%+ payout ratio, cumulative increasing dividends (14 consecutive years of increases is nearly confirmed for this fiscal year), and share buybacks considered in years with no large M&A transactions. Current year payout is on track to hit ~58%.
  • Long-term strategic guidance is to transition the company from a traditional engineer dispatch matching business to a full human capital growth support business, focused on increasing engineer lifetime value rather than just providing placement opportunities.

As of the third quarter of the 2025 June fiscal year, Open Up Group has fully reorganized its business portfolio to focus exclusively on engineer dispatch (including mechanical/electrical, IT, and construction engineers). The company divested its low-growth, low-margin blue-collar manufacturing dispatch and light work businesses (which previously generated ~30 billion yen in annual revenue) to concentrate all resources on the high-growth, high-margin engineer dispatch segment. Year-to-date third quarter revenue is 146.8 billion yen against a full-year guidance of 185 billion yen, and year-to-date operating profit is 12.9 billion yen against a full-year guidance of 15.5 billion yen, both on track to meet full-year targets. The company has delivered 10x revenue growth and 11x operating profit growth over the past 10 years, with a compound annual growth rate of ~30% for both revenue and employee count.

• Rising competition for inexperienced new hires, as competitors previously focused on experienced engineers have now entered the inexperienced hiring space, which will likely increase recruitment costs.
  • Current market concerns over industry-wide wage inflation and rising recruitment costs putting downward pressure on profit margins, which have weighed on the company's share price in 2024-2025.
  • Higher turnover among single-person dispatched engineers (15-20% annual turnover) compared to contracted team-based engineers (sub-5% annual turnover), requiring targeted fixes to reduce turnover and improve retention.
  • The need to complete post-merger integration (PMI) and deliver profit improvement for recently acquired businesses, which is a core near-term priority.

Q: What is Open Up Group's core competitive advantage for securing engineers, now that more competitors are entering the inexperienced hiring space? / A: The company's biggest strength is its established, proven training system that can develop inexperienced candidates into client-ready engineers that meet customer requirements. This trusted track record means third-party recruitment agencies proactively refer candidates to Open Up Group, creating a durable sourcing advantage. The company's focus on IT infrastructure engineering also creates a unique niche: it is an accessible entry point for inexperienced and liberal arts candidates that still offers competitive compensation, opening up a larger applicant pool than more technical development engineering paths.

Q: Why has the share price underperformed recently, and why might long-term shareholders see lower dividend returns than in the past? / A: After the merger, the initial share price spike was driven by short covering after a period of heavy short selling, and the price corrected to fundamental levels after this process completed. Since 2024, the share price has been weighed down by broad market concerns over wage inflation, recruitment cost increases, and growth slowdowns for growth-oriented human resource stocks. For returns, the company's policy is prioritizing growth: when M&A is completed, only dividends are paid, but when there is no M&A, share buybacks are executed to maintain high total shareholder return. The commitment to 50%+ payout and cumulative increasing dividends remains unchanged.

Q: Why is reducing turnover such a key priority, and are there any concrete plans to improve retention? / A: Management notes that turnover is far lower for team-based contracted work than for individual dispatched placements, which management attributes to higher belonging and clearer career visibility when working in a team of Open Up Group employees. Open Up Group is testing new initiatives to build connection and community for individually dispatched engineers, such as structured peer networking programs, to lower turnover. Reducing turnover is a core priority because increasing engineer lifetime value is the company's key long-term profitability metric.