Kokopelli Inc. Q4 FY2025 earnings call

• Overall Financial Performance • Cocoperi achieved an all-time high consolidated revenue for the FY2025 March term, with all core financial metrics (revenue, operating profit, ordinary profit, EBITDA) meeting the twice-upwardly revised full-year guidance. • Large profit growth was driven by both top-line revenue expansion and significant development cost reduction from aggressive adoption of AI and process automation, with a 2.4 percentage point improvement in gross profit margin year-over-year.

• Product Development & New Service Launches • Added three new services to the product portfolio: BM Portal (business matching management for financial institutions, first launched at Kyoto Bank in April 2025), SAF (specialized AI FAQ for internal financial institution inquiries, first launched at a Kinki region financial institution in January 2025), and prepared for the June 2025 launch of BIG ADVANCE GLOBAL, the company's first global expansion initiative. • Achieved 20%+ reduction in development man-hours and 60%+ reduction in testing man-hours via AI automation, directly driving margin improvement. • Integrated generative AI across existing Big Advance features: automatic text generation for websites, automatic creation of business matching demand, AI-recommended matching candidates, and launched the new AI Agent concept to deliver autonomous, end-to-end support for SME management. • Expanded the Fukuri employee benefits feature via a partnership with Relo Club, increasing available coupons to over 10,000 locations nationwide and improving UI/UX. • Launched owned media Connect to share success stories of Big Advance member SMEs.

• Key Partnerships & Deployment Progress • SAF has recorded over 1,000 staff inquiries within 3 months of first deployment, delivering 80 hours of labor savings and is ready for cross-deployment to other partner financial institutions. • Launched a new corporate portal service at Higo Bank, and deployed GrpMail/WebFile at Tokushima Taisho Bank. • Signed a basic agreement with Thailand's Office of Small and Medium Enterprises Promotion (OSMEP) to support BIG ADVANCE GLOBAL's Thailand launch, with plans for further expansion into other ASEAN countries, and signed a memorandum of understanding with Mizuho Bank to leverage its global network for regional expansion. As of pre-launch, 19 domestic financial institutions have already committed to joining BIG ADVANCE GLOBAL.

Cocoperi operates two core business segments: 1) Big Advance Business: A中小企業向け経営支援B2B SaaS platform distributed via partner financial institutions. As of FY2025 March term, it has 78 partner financial institutions, 60,172 member companies, 221,518 total users, a 1.35% average churn rate, and cumulative business matching requests exceeding 200,000 units. Its website creation feature is used by 15,000 companies, and it contributed approximately 85% of total group recurring revenue. 2) DX Solutions Business: This segment provides digital transformation services for financial institutions, including the new AI FAQ service SAF, file sharing services GrpMail and WebFile, and business matching management portal BM Portal. It contributed the remaining ~15% of recurring revenue. Overall group consolidated performance for FY2025 March: Total consolidated revenue reached 2.007 billion yen, up 10.2% year-over-year; EBITDA reached 0.4 billion yen, up 100.2% YoY; operating profit reached 197 million yen, up 483.8% YoY. Recurring (stock) revenue accounts for approximately 85% of total revenue, and group-wide ARPA currently stands at 19,911 yen.

• Full-year FY2026 March term earnings guidance is currently withheld, due to the lack of a reasonable quantitative basis to forecast adoption growth for BIG ADVANCE GLOBAL, the company's first large-scale overseas expansion launching in June 2025. Guidance will be disclosed promptly after launch once reasonable forecasting is possible.
• The original medium-term management plan target (4 billion yen revenue and 0.8 billion yen operating profit (20% operating margin) for the FY2027 March term) remains unchanged and on track.
• Key strategic priorities for FY2026 March term: 1) Rebuild a growth trajectory for Big Advance member count, strengthen relationships with partner financial institutions, and enhance member support; 2) Scale BIG ADVANCE GLOBAL's Thailand launch starting June 2025; 3) Expand cross-deployment of new services including BM Portal, corporate portals, SAF, and GrpMail/WebFile to additional financial institutions; 4) Expand subsidy consulting services via subsidiary Cocoperi Management Support.
• The 3-year, 0.5 billion yen investment plan for BIG ADVANCE GLOBAL has been accelerated after being selected for the Ministry of Economy, Trade and Industry's Global South Subsidy program.

• Big Advance member enterprises decreased by 893 sequentially from the third quarter, creating pressure to rebuild member growth momentum in the next fiscal year.
• BIG ADVANCE GLOBAL is Cocoperi's first overseas expansion initiative, with unproven market demand and adoption speed that introduces uncertainty to future growth forecasts.
• Continued in-house development expansion has led to increasing personnel costs, which partially offset cost savings from AI-driven efficiency improvements.

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