3983.T

• Consolidated Overall Performance

  • Consolidated sales revenue reached 8.307 billion yen, an increase of 5.2% year-over-year. Consolidated operating profit reached 2.649 billion yen, a decrease of 2.6% year-over-year, resulting in full-year top-line growth but bottom-line decline.
  • Long-term, consolidated sales revenue has continued a steady upward trend, and operating margin has been maintained at a high level above 30% overall.
  • Cash and deposits continue to accumulate alongside operating profit generation, and there are no notable issues on the balance sheet.
  • Dividend Policy
  • The company maintains a progressive dividend policy as its baseline approach. The planned dividend for the next fiscal year (2026 December period) is set at 50 yen per share including interim dividend, unchanged from the current fiscal year.
  • License Model Transition
  • Buy-out type licenses were discontinued on December 31, 2022. Deferred revenue recognition for legacy buy-out licenses will be fully completed by the end of the 2026 December period, and starting from the 2027 December period, all revenue will be recognized only from SaaS-type contracts.
  • For new ZAC SaaS contracts, implementation support fees are recognized per the percentage-of-completion method, while all other recurring revenue is recognized monthly per the standard SaaS model.
  • Generative AI Development
  • The core ZAC product is highly complex, so building ZAC entirely from scratch using generative AI is not feasible, as significant workflow customization aligned with client business requirements is still required.
  • The company expects future operating environments will shift to generative AI agents interacting with ZAC, so it is continuing development of user-friendly peripheral interfaces and adding generative AI-enabled features directly inside ZAC. Several internal releases are already complete, and the first public external releases are planned during the 2026 December period.
  • Organizational Changes
  • Starting January 2026, the Marketing Solution segment implemented major organizational changes: the division head role was transitioned to a younger leader, and a unified Development Headquarters was established by merging the previously separate development teams for the CS and MS segments. This merger is intended to improve knowledge sharing for product development innovation, strengthen shared development knowledge, and enable more system capability-rich proposals for the MS segment.
  • The company will continue acquiring new customers, but in 2026 December period, the priority will be strengthening communication with existing customers under the new organizational structure to drive revenue growth from the existing client base.
  • Workforce Planning
  • Total headcount continues to grow gradually. Approximately 25 new graduate hires are planned to join the CS segment in April, and approximately 10 new graduate hires are planned for the MS segment. For the MS segment, the company is controlling external outsourcing costs and prioritizing in-house development while continuing planned hiring amid uncertain external market conditions, with the goal of full performance recovery after the new organizational structure is established.
  • Cost Structure
  • The main driver of consolidated cost increases is headcount growth aligned with company scale expansion, and there are no other notable extraordinary cost items.

• For the 2026 December fiscal year, management expects sales revenue to increase 15.2% year-over-year, and operating profit to increase 10.6% year-over-year.
• For the 2028 December fiscal year, management targets total sales revenue of approximately 12.9 billion yen and total operating profit of approximately 4.5 billion yen.
• For 2028 key performance indicators: ARPA (Average Revenue Per Account) is expected to continue increasing gradually as client accounts grow larger, and the company will prioritize improving customer satisfaction to maintain the current low churn rate.
• The 2025 and 2026 fiscal years are considered an investment phase. The company does not plan to reduce the profitability of individual client projects, but it is making investments in AI-related development capability and other strategic initiatives to prepare for strong growth starting three years from now.

1. Cloud Solution (CS) Segment: Delivered double-digit growth in both revenue and operating profit. Total contracted license numbers increased 9.2% year-over-year, with average licenses per client also increasing slightly, indicating steady expansion of customer scale. Monthly Recurring Revenue (MRR) grew 10.7% year-over-year to 375 million yen. Monthly churn rate remained stable at around 0.3%, staying at a low level. In Q4 2025, revenue from ZAC implementation support and customization grew driven by increased large client acquisitions and migration of existing clients to new environments. The recurring revenue stream from ZAC license fees, maintenance fees, and other monthly SaaS service fees grew steadily. Advertising and promotion expenses for core products ZAC and Reforma PSA totaled approximately 118 million yen, and customer acquisition progress was broadly in line with plan. The segment accounts for a growing majority of the company's total consolidated revenue.
2. Marketing Solution (MS) Segment: Delivered a large decline in both revenue and operating profit for the full year, driven by significant budget cuts from major clients. The segment struggled heavily from Q1 to Q3, though trends improved notably in Q4. Overseas revenue continued growing and reached 450 million yen for the full year. Revenue contribution of the segment declined year-over-year as a result of underperformance.

• The Marketing Solution segment faces continued external pressure from major client budget cuts and the trend of clients bringing digital advertising operations in-house, which led to a large full-year decline in revenue and profit in 2025. Though the company expects to recover through organizational changes and in-sourcing, uncertainty around external market conditions remains high.
• In the Cloud Solution segment, the projected shift to AI agent usage may reduce the number of human end-users, creating pressure to adjust the current per-user pricing model to maintain revenue levels.

Q: Will the market for ORO's Marketing Solution business shrink further as clients use AI to bring digital advertising operations in-house?

A: ORO confirms that in-house adoption is progressing among its large enterprise clients, but even with in-house operations and AI utilization, clients still need external support. ORO can continue to support clients by providing tools and consulting services, so a large contraction of the overall business is unlikely. As long as the agency maintains knowledge of best practices across different client operation models, consulting support and outsourced operation services will remain in demand.

Q: What caused the increase in ZAC license cancellations in December and January?

A: The temporary uptick in cancellations was not driven by broad market changes or external factors. The increase was entirely caused by the departure of one large group client. New customer acquisition has been very strong recently, so there is no underlying structural issue driving higher churn.

Q: What initiatives is ORO considering to improve corporate value and maintain TOPIX inclusion, particularly around increasing floating market capitalization and strengthening shareholder returns?

A: ORO does discuss TOPIX retention as a strategic priority. The core priority is increasing corporate value to drive higher share prices, and strengthening shareholder returns is one potential policy option under consideration. To increase the free float ratio and floating market capitalization, ORO is evaluating multiple options including secondary sales of holdings from major shareholders to increase the volume of publicly traded shares.

Q: What is ORO's medium-to-long term pricing strategy for the Cloud Solution business?

A: Price strategy is a high priority for the business. ORO will not pursue abrupt large price increases, but will continuously evaluate moderate price increases aligned with changes in overall price levels. Looking forward, as AI agent usage reduces the number of human end-users, the per-user pricing model will need to be adjusted to capture appropriate revenue from clients. ORO is also evaluating introducing usage-based tiered pricing for AI-enabled features, so overall, the company will need to adjust its pricing structure to align with changes in how the product is used.

Q: What is the plan for advertising and promotion expenses in the 2026 fiscal year?

A: The 2026 advertising budget is planned to be moderately higher than 2025 spending. There are no plans for large-scale mass advertising campaigns; the budget increase aligns with higher customer acquisition targets. Since ZAC is a solution focused on specific industries, advertising spending will be prioritized on targeted outreach to those industries for maximum efficiency. Trade shows were very effective for customer acquisition in 2025, so ORO plans to continue active participation in trade shows in 2026.

Q: Does ORO have set cost reduction targets for internal AI utilization?

A: ORO is actively using AI across the business to drive cost reduction, but it has not set a formal quantified target KPI for cost savings. The company is currently in the process of changing core work processes with AI adoption, so cost reductions are expected to progress over time, but no specific target has been established at this point.