3908.T

• Overall Financial Performance (2nd Quarter FY2026):

  • Total revenue: 885 million yen, down 98 million yen YoY
  • Operating profit: 58 million yen, up 21 million yen YoY, driven by 118 million yen of cost reduction in cost of goods sold and 1 million yen of selling, general and administrative cost reduction
  • Interim net profit: 56 million yen, including a 24 million yen extraordinary gain from stock option forfeiture
  • Free cash flow remained healthy: operating cash flow was 72 million yen, investment cash outflow was 15 million yen

• Mid-Term Management Plan Progress:

  • The current mid-term plan (finalized in 2023) has FY2026 March term as its final year, and there is a material gap between original targets and current performance projections. Key reasons include unanticipated early end of post-COVID special demand, faster-than-expected shift in client demand toward AI-enabled services following generative AI advancement, unanticipated business contraction at major anchor clients, and a 1-year launch delay for VLOOM that missed the initial window of high AI demand.
  • Management retains the original two-pillar strategy: stable growth for @nyplace, and explosive growth for proprietary AI services, to accelerate the transition of the revenue base.

• Product Updates:

  • UZ received two large version updates in 2025, adding Gemini integration for automatic content generation, bulk download of speech recognition results, and seamless integration with VLOOM to shorten voice data import time and enable easier automated FAQ and script generation.
  • VLOOM received updates doubling transcription speed, improving automatic summary accuracy via Gemini, and improving UI accessibility to reduce operational load and improve response quality.

• New Client Wins:

  • UZ was adopted for municipal public window operations to analyze citizen inquiry calls for AI chatbot training and staff knowledge standardization.
  • UZ was adopted for BPO operations at a non-life insurance client, cutting operator evaluation feedback time by 75% and eliminating subjectivity in performance reviews.

• Governance and Capital Strategy:

  • Starting in FY2026 March term, Collabos will implement an annual year-end dividend policy, balancing internal retention for growth with clear shareholder returns.
  • The company is currently only non-compliant with the Tokyo Stock Exchange (TSE) Growth market capitalization requirement, and is pursuing four initiatives to reach compliance by the March 2026 deadline: improve profitability, strengthen IR/PR, implement shareholder returns, and evaluate a step-up listing to the TSE Standard market or listing on other domestic exchanges.

• The company upwardly revised its full FY2026 March term earnings guidance from the initial May 2025 projection, driven by contract extensions and business expansion at existing clients of @nyplace and COLLABOS PHONE.
• Full-year revenue is now projected at 1.7 billion yen, and operating profit is projected at 50 million yen, both above prior guidance, even after accounting for expected cost increases from sales promotion, IR activities, and headcount expansion.
• Net profit is also projected to come in above prior guidance due to the recognition of the stock option forfeiture gain in the 2nd Quarter.
• Management expects proprietary AI services to grow ~100 million yen YoY in the full year, reaching 20% of total revenue and driving an overall shift to an upward earnings trend.
• The company is targeting revenue growth exceeding guidance via multi-channel sales initiatives for proprietary services.

1. Existing Services (@nyplace, COLLABOS PHONE): Total revenue declined 98 million yen year-over-year (YoY) for the half-year, due to large client business contraction, company-wide cost reduction at major clients, and client shifts to the firm's higher-function AI-enabled VLOOM. For the 2nd Quarter, these services still account for ~60% of total company revenue, and their gross margin improved 2.8% YoY due to operational optimization. Management expects the overall revenue decline to bottom out in the full FY2026 March term, and the segment maintains a stable profit base via ongoing cost optimization.

2. Proprietary AI Services (VLOOM, UZ, GROWCE, GOLDEN LIST): VLOOM (AI call center system) grew 60% YoY in revenue, driven by new client acquisition, client migration from existing services, and strong demand for AI and cost reduction features. The full FY2026 March term expects proprietary services revenue to grow ~100 million yen YoY, reaching ~20% of total company revenue. UZ (AI marketing system) and GOLDEN LIST (AI customer analysis/prediction tool) both saw growing order volume driven by demand for DX, operational efficiency, and VoC analysis. GROWCE (CRM service) also grew via client migration from competing CRM tools.

• The company is currently non-compliant with the TSE Growth market capitalization requirement (needs 4 billion yen, current market capitalization is below 2 billion yen), and management acknowledges meeting the requirement by the deadline is very challenging; the firm is pursuing alternative listing options as a contingency.
• The 1-year launch delay for VLOOM caused the company to miss the initial window of high market demand for AI call center services, delaying overall revenue and profit growth relative to original mid-term plan targets.
• Overall demand for traditional human-staffed call center services is in gradual decline in Japan due to population decrease, rising labor costs, and a shift to digital/automated inquiry channels, driving ongoing revenue pressure on existing legacy services.
• The legacy service revenue decline was larger than originally projected in the mid-term plan, driven by faster-than-expected client demand shifts toward AI-enabled services and unexpected large client cost-cutting and business contraction, leading to a material gap between original mid-term targets and current performance.

Q: Who are Collabos's main competitors, and what is the company's competitive advantage?

A: Collabos divides its services into three categories with different competitor sets. For legacy telephone infrastructure services (which make up 60% of revenue), competitors include legacy on-premise vendors like AVAYA, NEC, and Oki Electric, plus cloud competitors like Genesys, Amazon Connect, BIZTEL, and Comdesign. For CRM services, competitors include Salesforce, kintone, and FastHelp. For new AI/DX services like UZ and GOLDEN LIST, direct competition is still limited. Collabos's core advantage is that it is the only provider that offers a full one-stop suite of services for call centers and marketing firms, covering infrastructure, CRM, and AI analytics.

Q: What is the current state of the Japanese call center market, and what is driving the legacy service revenue decline?

A: Japan's total population decline means the overall number of human-staffed call centers is not growing, and is gradually declining. Rising labor costs and a shift from telephone to digital/chat inquiry channels have also contributed to the gradual contraction. However, the automated/AI call center market is growing, as automation replaces human labor for simpler inquiries, and Collabos is positioned to capture this growing segment.

Q: What are the main use cases for VLOOM and UZ, and what types of clients use them?

A: The most common combined use case is VLOOM handling call routing and transcription, with UZ automatically summarizing calls and pasting results into the client's CRM, cutting per-call operator time. Other common uses include automated FAQ generation from call data and automated operator performance evaluation. UZ is also widely used by BPO and telemarketing clients to reduce the time required to prepare regular client reports, with lower price points that make it accessible for many use cases, keeping demand strong.

Q: How does Collabos view the difficulty of meeting the TSE Growth market listing maintenance requirements?

A: Management acknowledges that meeting the 4 billion yen market capitalization requirement is very challenging, as the current market capitalization is below 2 billion yen and the requirement could be raised further. As a result, the company is actively evaluating a step-up listing to the TSE Standard market or an alternative domestic exchange as a contingency.