3910.T

• Core Business Model & Positioning

  • The group operates two core segments focused on HR and labor technology, with the 社労夢事業 structured as a recurring stock-based business that generates ongoing monthly revenue after initial onboarding fees. The primary target market is ~1.16 million Japanese companies that work with social insurance labor consultants (SRAs).
  • Current market penetration: 8.5% share among independent SRA offices (most of which are single-person operations with many still unpenetrated by systems), and 47% share among the top 105 largest SRA offices, where the company will continue its loyal customer strategy.
  • As of September 2025, the Shalom series has 3,206 client companies, 13,922 issued IDs, 800,000 registered client companies, with ARPU of 53,600 yen and ARPA of 12,300 yen, reflecting continued user base expansion.

• Financial Performance Overview

  • Consolidated interim revenue hit a record high of 1.531 billion yen, up 1.6% year-over-year. Gross profit reached 615 million yen, up 14% year-over-year, with gross margin improving 4.4 percentage points to 40.2%. The company achieved an operating profit of 2 million yen (break-even profitability), representing a 127 million yen year-over-year improvement.
  • Positive operating cash flow of 347 million yen, with cash and cash equivalents increasing by 70 million yen to a stable 677 million yen. Development investment was temporarily lower year-over-year following the prior-period release of the major new product 社労夢FOREVER.
  • Key profit drivers: 24 million yen contribution from revenue growth, 40 million yen from IDC cost cuts, 50 million yen from outsourcing cost cuts, and 25 million yen from sales promotion cost optimization, partially offset by a 31 million yen negative impact from increased personnel costs due to base pay raises and hiring expansion.

• Product & Marketing Initiatives

  • Released API integration between 社労夢 and the Japanese business chat tool Chatwork for 社労夢ハウス plan users, enabling automated information sharing, document delivery, and process notifications between SRAs and their client companies, with additional integrations for process intake and progress tracking scheduled for late November 2025.
  • Runs regular promotional seminars: monthly guest speaker seminars for 社労夢ハウス, monthly product seminars for the GoooN performance management system, and thematic DX product seminars that have drawn positive feedback from attendees.

• Security & Operational Improvements

  • Upgraded cybersecurity based on CIS Controls V8, including building a redundant restore environment in the Osaka AWS region, adding account lockout notification systems, restricting service access to domestic IP addresses only, implementing 24/7 monitoring via external SOC plus increased in-house monitoring staff, and obtaining ISO/IEC 27017:2015 cloud security certification to improve trust and risk management.

• The full-year consolidated guidance is maintained at: 3.2 billion yen total revenue, 1.474 billion yen gross profit, 150 million yen operating profit, and 97 million yen net income attributable to parent shareholders. Interim revenue progress is 47.8% of the full-year target, and gross profit progress is 41.7%.
• Full-year profitability is expected, driven by continued steady profit from 社労夢事業 and a projected recovery/return to profitability for CuBe事業 in the second half. Total full-year revenue is expected to be flat compared to the prior fiscal year, due to the impact of exceptional revenue in CuBe事業 in the prior year.
• The full-year dividend is projected at 8.0 yen per share, returning to the pre-ransomware incident dividend level, with an expected payout ratio of 44.8%, consistent with the company's policy of prioritizing stable returns to shareholders.

1. 社労夢事業: Total revenue of 1.195 billion yen, a 1.3% year-over-year increase, contributing approximately 80% of total consolidated revenue. The segment breakdown is 1.13 billion yen from ASP services, 33 million yen from system construction services, and 31 million yen from system product sales. The business achieved stable operating profit for the third consecutive quarter, with a 143 million yen year-over-year improvement in operating profit, driven by cost reductions for IDC and outsourcing expenses. 2. CuBe事業: Total revenue of 341 million yen, a 2.9% year-over-year increase, contributing approximately 20% of total consolidated revenue. The segment breakdown is 314 million yen from contract development, and 26 million yen from cloud services. An unexpected loss-making project in Q1 led to a 35 million yen operating loss in the first half, but the segment expects larger project sales in the second half and targets full-year profitability.

• The CuBe事業 recorded an unexpected 35 million yen operating loss in Q1 from a project that exceeded its planned labor hours and incurred higher-than-budgeted outsourcing development costs, which reduced interim profitability.
• The large majority of single-person independent SRA offices are still unserved by the company's systems, representing an untapped but still unpenetrated market that requires ongoing product development effort to capture.
• Cybersecurity threats such as unauthorized access, bot attacks, and service outages remain ongoing risks that require continuous incremental investment in countermeasures.

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