MIT Holdings CO.,LTD. Q2 FY2025 earnings call

Overall Interim Financial Performance

• All core financial metrics hit all-time interim highs: Total revenue is 2.615 billion yen (2.9% year-over-year increase), gross profit 597 million yen, operating profit 128 million yen (17.0% year-over-year increase, operating margin 4.9%), ordinary profit 124 million yen, net profit 80 million yen (30.4% year-over-year increase).
• Q1 saw large operating profit growth driven by system integration service revenue gains, while Q2 saw temporary revenue slowdown between large project cycles and overlapping new graduate training leading to lower quarter-on-quarter profit.

Group Structure and Human Capital

• The group has four operating subsidiaries: System Io (core system integration, prior year revenue 4.041 billion yen), APS (mixed system integration and DX, prior year revenue 395 million yen system integration / 142 million yen DX), Vigal (proprietary Wisebook / DynaCAD products, prior year revenue 509 million yen), and Netwinks (DX drawing services for large renovation projects, prior year revenue 189 million yen).
• As of April, total group headcount is 397, average age 35.7, 70% male / 30% female, with 5.9% average wage increase implemented in April 2025, up from 4.9% in 2024.

Growth Strategy

• System Integration Service, the core stable business, targets 7.0% average annual growth, building on 35 years of experience delivering social infrastructure systems for public, financial, communications, and energy sectors.
• DX Solution Service, the high-margin growth segment, targets 25.6% average annual growth to reach 985 million yen in 2025 revenue.
• Wisebook, the company's flagship digital marketing digital book solution, is a key growth priority: it offers low-cost short-term plans, customizability (industry-unique feature), enables paperless cost reduction amid rising printing costs, and includes heatmap access analytics to track user engagement for marketing use. It is seeing growing adoption in education and corporate training, with OEM partnerships with large corporations ongoing.

Long-Term Targets

• By 2030, the company targets 10 billion yen in total revenue and 10% operating profit margin, with DX Solution Service increasing its revenue share from ~15% to ~30%.

1. System Integration Service: Revenue of 2.209 billion yen, accounting for 84.5% of total interim revenue, representing a 3.3% year-over-year increase. This segment is the company's core stable business focused on social infrastructure core systems and network infrastructure construction, and maintained growth after a large logistics sector project concluded with new large project wins in the energy sector. 2. DX Solution Service: Total revenue of 405 million yen, accounting for 15.5% of total interim revenue, with a slight year-over-year increase. It is further divided into three sub-segments: - Digital Marketing: 85 million yen in revenue, 27.6% year-over-year decrease, as growing in-progress educational institution digital book projects require longer lead times before revenue recognition. - Drawing DX Solution (DynaCAD): 194 million yen in revenue, 8.8% year-over-year increase, driven by steady growth in DynaCAD maintenance contracts and new customer growth for CAD drawing services. - Cloud System Solution: 125 million yen in revenue, 18.6% year-over-year increase, driven by expanding orders for cloud services including the face-authentication cafeteria reservation system The Meal and unmanned bicycle parking lot management systems.

• Full-year 2025 November fiscal year guidance is maintained at 5.7 billion yen total revenue and 285 million yen operating profit. Interim revenue progress hit 45.9% of full-year plan, and interim operating profit progress hit 45.0% of full-year plan, which is slightly below the 50% halfway benchmark, but management retains the full-year target and expects to grow revenue and profit in the second half.
• A planned full-year dividend increase is scheduled: total year-end dividend is 30 yen per share, consisting of a 26 yen regular dividend plus a 4 yen special commemorative dividend marking the 35th founding anniversary of core subsidiary System Io, consistent with the company's dividend policy targeting a 30%+ consolidated payout ratio while retaining sufficient internal reserves.

The provided transcript does not contain explicit discussion of material business risks or operational failures.

The full Q&A section content is incomplete in the provided transcript, only question topics are listed with no full answers. The primary listed question topics are: 1. Interim period performance trends and the Q2 quarter-on-quarter decline in revenue and operating profit; 2. Seasonality patterns in revenue and operating profit trends; 3. Differences between Wisebook digital books and standard PDF documents; 4. Key unique features of the Wisebook product; 5. Compliance with exchange listing maintenance requirements.