2436.T

• 2025 Consolidated Financial Summary

  • 4 consecutive years of revenue growth, 6 consecutive years of operating and ordinary profit growth, and 3 consecutive years of net profit growth
  • Consolidated revenue: 8.554 billion yen, +16.8% YoY; Operating profit: 1.302 billion yen, +21.2% YoY; Ordinary profit: 1.307 billion yen, +20.9% YoY; Net income attributable to parent shareholders: 863 million yen, +64.1% YoY
  • Standalone revenue: 5.473 billion yen, +14.1% YoY; Operating profit: 958 million yen, +15.7% YoY
  • Net debt decreased: 159 million yen in long-term debt was repaid, ending the period with total equity ratio of 62.9% and 3.543 billion yen in cash and cash equivalents
  • 2025 dividend set at 14 yen per share, a 2 yen increase from 2024

• Key Operational Highlights by Segment

  • PR Business: Completed public relations support for the Osaka-Kansai World Expo, supporting PR for approximately 10 country pavilions; Led PR for a special 6-top-Japanese-boxer event in the Middle East tied to 70 years of diplomatic relations, plus large-scale domestic press conferences; Led successful large-scale PR campaigns for Mission: Impossible and Jurassic World films via subsidiary Manhattan People
  • Influencer Marketing Business: Popular influencer group Merupuchi (420,000 YouTube subscribers) was appointed as an official support supporter for the 2026 Asian Games and Asian Para Games in Nagoya; Influencer Osaki (affiliated with VAZ and a Merupuchi alumna) surpassed 1 million YouTube subscribers, becoming the third 1-million+ follower female influencer from the company's portfolio
  • AI & Big Data Solutions Business: Launched full-scale implementation and operation support services for generative AI platforms (e.g. Dify) starting May 2025, with a client (Aeon Delight) reporting that the solution handles over 10,000 internal inquiries monthly and delivers notable operational improvement; Subsidiary Keywalker was selected for the 2026 Best Venture 100; 3 Keywalker employees were selected as DataFam Rising Stars 2025 out of 90 total selected from 17 countries, a validation of the company's professional talent development goals

• 2026 Strategic Growth Priorities

  • Company-wide transformation: Transition from a 'company that uses AI' to a 'company that wins with AI', targeting an organizational growth rate of 130%+ per capita post-2026 via AI adoption; Established the new AI Innovation Core (AIC) Center, led by the Chairman of the Board to drive management-aligned AI strategy, with three core missions: develop and implement AI to improve operational efficiency, service quality, and client value; upskill all employees and cultivate advanced AI talent; develop new AI-powered services and products
  • AI talent development target: 80% of all employees will reach at least Level 5 (out of 7 scale) on the internal AI proficiency certification by the end of 2026, with 30% (60+ employees) reaching Level 6+ for advanced AI skills; the 2025 target of 80% of employees reaching Level 4+ was achieved
  • PR Business Growth: 1) New subsidiary Kyodo PR Ring was launched to serve the growing trend of in-house PR, offering AI-powered press release generation (AI-Press), media list distribution (PR-FORCE), and SaaS media matching to serve large enterprises that insource operations, startups, and SMEs that do not need full retained PR services; 2) Deepen existing client relationships: The proprietary SAKAE PR operations database (containing data for 20,000 journalists, 3 billion+ media articles, and client distribution results) will add a free PR Analytics Dashboard for clients in 2026 to enable real-time sharing of campaign results, automated reporting, and more transparent, data-driven decision making
  • Influencer Marketing Business Growth: Pursue revenue diversification via Asian expansion and IP development: 1) Co-producing the new idol group α+ (Alpha Plus) with Twin Planet, set to debut in February 2026; 2) Build out local influencer networks across Asia starting from Merupuchi's existing domestic fanbase, with the 2026 Asian Games supporter role as the first step; 3) Develop an original cosmetics brand leveraging influencer insight, pursuing a D2C private label model; 4) Monetize influencer IP via physical products like trading cards and board games to expand fan experience value

• Medium-Term Strategic Progress

  • The first two years (2024-2025) of the medium-term plan have progressed broadly as planned; 2024 saw new partnerships with Ballard Partners (public affairs) and Seitaro Design (branding), plus the opening of the Osaka branch and launch of internal AI implementation support; 2025 saw an investment in AI Model Inc., acquisition of Total Communications, and company-wide AI proficiency upskilling, putting the company on track to hit the final year targets
  • Long-term vision: Centered on 'Creating industry standards via PR × AI', with four core goals: build a group of multiple IPO-bound public companies with collaborative group-wide operations; establish the de facto standard for AI utilization in the PR industry and become the industry leader; build a continuous new business creation engine via corporate venture capital; achieve full group expansion across Asia and global markets

• For the 2026 December fiscal year, the final year of the medium-term management plan, Kyodo PR maintains its original medium-term target of 10 billion yen in consolidated revenue, 1.6 billion yen in operating profit, and 1.6 billion yen in ordinary profit, with planned net income attributable to parent shareholders of 900 million yen
• The 2026 dividend is planned at 16 yen per share, a further 2 yen increase from the 2025 dividend
• Management expects to achieve another record-high revenue and record-high operating profit in 2026, to continue driving corporate value growth

All three of Kyodo PR's business segments achieved record-high results in 2025, driving top-line and bottom-line growth:

1. PR Business: Revenue reached 6.184 billion yen, a 13.6% increase compared to the prior year. This segment contributed 72.3% of total consolidated revenue. Segment profit hit 1.14 billion yen, a 20.3% year-over-year increase. The addition of Total Communications as a consolidated subsidiary from August added approximately 50 million yen in revenue and 10 million yen in profit. Growth was driven by an increase in retained client contracts and a 20% increase in spot project revenue compared to the prior year.
2. Influencer Marketing Business: Revenue was 1.294 billion yen, a 31.2% year-over-year increase, contributing 15.1% of total consolidated revenue. Segment profit reached 111 million yen, a 33.9% increase compared to the prior year. Growth came from strong performance of collaboration projects for cosmetics and apparel from the segment's ~100 affiliated creators, as well as increases in events and collaboration projects tied to the three owned media properties operated by subsidiary VAZ.
3. AI & Big Data Solutions Business: Revenue hit 1.075 billion yen, a 20.7% year-over-year increase, contributing 12.6% of total consolidated revenue. Segment profit reached 192 million yen, an 11.8% increase compared to the prior year. Growth was driven by a near 30% increase in business for the proprietary ShtockData service, as well as a near 20% increase in data infrastructure services and BI tool implementation support services.

No material risks or operational failures were explicitly discussed in the provided earnings call transcript.

Q: You mention targeting an IPO for group companies, and Keywalker has been discussed as an IPO candidate with timing under review. Is there now a clear timeline for Keywalker's IPO?

A: We can share that we are aggressively moving forward with management preparations for the IPO at this time. We view this as a matter of appropriate timing rather than an issue of unresolved problems, and we aim to share an update as soon as possible.

Q: For the 2026 target of 10 billion yen in revenue and 1.6 billion yen in operating profit, are there any large cost factors that will impact results this year, such as large increases in personnel expenses or development costs?

A: We plan to hire new graduates and mid-career hires at the same pace as previous years, and we are not planning to double or triple hiring volume, so personnel investment will remain in line with historical levels. While we do expect some increased investment for AI-related development, we are not currently planning any large investments that would pressure operating profit.

Q: Compared to historical levels, net income this year looks relatively low: 2025 had 1.3 billion yen in ordinary profit with 860 million yen in net income, and 2026 is guided to 1.6 billion yen in ordinary profit with only 900 million yen in net income, which means net income is growing much slower than ordinary profit. What is the reason for this?

A: For 2025, the 863 million yen in net income includes a one-time 104 million yen tax reduction from a reclassification of deferred tax asset recoverability; excluding this impact, net income would have been 759 million yen on 1.307 billion yen in ordinary profit, which matches the expected proportion. For 2026, the lower relative net income comes from the fact that we only record net income for subsidiaries VAZ and Keywalker proportional to our ownership stake. We own 61% of Keywalker and 41% of VAZ, and both subsidiaries are planning strong high growth in 2026, so only the proportional share of their profit is included in our consolidated net income, which leads to the lower net income relative to total consolidated ordinary profit.