Global Information,Inc. Q2 FY2025 earnings call

• Company and Business Model Overview

  • Global Information has over 40 years of operations, 5 global locations, and agency agreements with more than 200 research firms, focused on delivering high-value cutting-edge market and technology information to clients.
  • The core information provision business uses a low-risk no-inventory model: the firm only places orders with supplier research firms after receiving client orders, after posting translated report information to its website.
  • The company launched its new 3-year mid-term management plan GII Vision 2027, with the core theme of evolving into a comprehensive market information provider to meet increasingly diversified client information needs.

• Core Operational Progress

  • Custom research: A dedicated custom research unit was established in April, and dedicated sales efforts have driven strong growth, with mid-term revenue reaching 2.2x the prior year level. Management will continue to focus on acquiring new clients and upselling higher-value custom projects to existing report buyers.
  • AI integrated market products: The company partnered with a US-based developer to offer the AI system "Rover", which provides secure AI-powered data analysis for client corporate data and accepts custom development requests. The firm won its first custom Rover project for an EC multi-store inventory management system, and has exceeded 200 free trial users as of August, targeting conversion to paid subscriptions.
  • Customer acquisition: The company has accelerated co-hosted seminars and webinars with supplier research firms, holding 3 events in the first half with over 90% client satisfaction, and plans 4 additional events in the second half to increase website traffic and offline engagement.
  • Subsidiary Gibtech (IoT Business): Gibtech sells low-power wide-area ZETA communication devices for IoT applications, and the non-contact exhibition DX tool AiMeet. Smart city project demand from local governments grew strongly in the first half, with TOPPAN leading client engagement and the company supplying hardware. AiMeet was successfully deployed to 5 exhibitions in July, with additional deployments confirmed for the second half, and Gibtech achieved mid-term revenue growth with a smaller operating loss than prior year, on track to hit its full-year operating profit target of 6 million yen.

• Mid-term Management Plan Targets

  • The 7 key priorities for GII Vision 2027 are: focus on custom research, expand AI-integrated market products, strengthen customer acquisition, promote internal AI data utilization, invest in new businesses, recruit and train next-generation talent, and drive profit growth from Gibtech.
  • The target for the final 2027 fiscal year is 3.524 billion yen in consolidated revenue, 580 million yen in operating profit, and a maintained annual dividend of 60 yen per share, representing an 8.6% average annual revenue growth rate over the plan period.

Global Information operates two core business segments. 1. Market and Technology Trend Information Provision: This segment accounts for 98.6% of total consolidated mid-term revenue, with sub-segment revenue contribution as follows: Market research reports (≈80% of consolidated revenue) – 7.6% year-over-year (YoY) revenue decline; Custom research (11.7% of consolidated revenue) – 125.1% YoY revenue growth (more than doubled from prior year); Annual information services (5.9% of consolidated revenue) – 2.0% YoY revenue growth; International conferences and exhibitions (1.2% of consolidated revenue) – 22.2% YoY revenue growth. Total mid-term revenue for this segment is 1.478 billion yen, with a planned 9.2% YoY full-year increase of 249 million yen. 2. Other (IoT-related) Business (via consolidated subsidiary Gibtech): This segment accounts for 1.4% of total consolidated mid-term revenue. Mid-term revenue saw a slight YoY increase, driven by deliveries of IoT communication devices for local government smart city projects. No revenue from the AiMeet exhibition DX tool was recorded in the first half, but multiple deployments are confirmed for the second half. Full-year revenue is projected to increase 58.3% YoY, adding 27 million yen in new revenue. On a consolidated basis, mid-term total revenue is 1.502 billion yen (0.3% YoY growth), gross profit is 718 million yen (0.3% YoY growth), operating profit is 265 million yen (-7.8% YoY), ordinary profit is 255 million yen (-65 million yen YoY), and net profit is 172 million yen (-41 million yen YoY). By region, domestic Japan revenue grew over 5% YoY to 1.282 billion yen, while overseas revenue (especially in South Korea and Taiwan) has been underperforming due to local economic slowdowns.

• Full-year 2025 December fiscal year guidance is maintained from the original announcement: 10% YoY revenue growth to 3.025 billion yen, 9.4% YoY operating profit growth to 479 million yen, 3.1% YoY ordinary profit growth to 480 million yen, and 4.8% YoY net profit growth to 330 million yen.
• The annual dividend per share is maintained at 60 yen, split into 30 yen interim dividend and 30 yen year-end dividend. The existing shareholder benefit program (2,000 yen QUO card for shareholders holding 200+ shares) is also maintained for the current fiscal year.
• Gibtech's full-year target of 6 million yen in operating profit (achieving breakeven on a full-year basis) is maintained, as second half AiMeet revenue is expected to offset the lack of first half revenue.
• The company maintains its dividend policy targets of a 6%+ DOE and 40%+ payout ratio, balancing stable shareholder returns with retained earnings for long-term growth.

• Post-April US tariff-related news caused market uncertainty, which led to a sharp drop in client inquiries through the company's website and yen appreciation that reduced yen-denominated selling prices, resulting in a 10% YoY Q2 revenue decline (to 405 million yen) and a 7.8% YoY drop in consolidated mid-term operating profit due to higher selling, general and administrative expenses.
• Overseas operations in South Korea and Taiwan have continued to underperform for multiple quarters due to prolonged local economic slowdown and (in South Korea) prior political instability.
• Client information demand is shifting away from standardized pre-published market research reports towards customized research solutions, creating downward pressure on core legacy market research report revenue.
• The chemicals/materials product category has experienced declining market share, which has impacted overall category revenue mix.

Q: Will the current strong growth of custom research continue, and will this growth come at the expense of market research report revenue, or be additive to overall growth? / A: Client information demand is shifting from standardized pre-published reports to more customized research solutions, a trend that will continue. While market research report orders declined after the April tariff news, the August finalization of Japanese tariff rates has clarified the business environment for corporations, so demand for reports is expected to recover. Management aims to grow both businesses, expanding custom research while maintaining growth in core market research reports.

Q: Overseas business is underperforming — what is the company's strategy for overseas operations going forward? / A: South Korea and Taiwan are the company's largest overseas markets, and both have seen weak sales due to prolonged local economic sluggishness. South Korea's new administration has now taken office, and management expects economic recovery there will benefit the company's business. Going forward, the company will continue to closely monitor local economic and branch operating conditions while maintaining strict cost control including payroll expenses.

Q: Can you share the regional breakdown of your market research report suppliers, and how do you approach the rising share of emerging market research firms? / A: The company partners with over 200 research firms, most based in Europe, North America and India. Over the past 5-10 years, research firms from emerging markets like India and China have grown rapidly and increased their share of the company's procurement. The company will maintain strong relationships with established high-quality Western research firms (which retain strong research capabilities and industry networks) while continuing to add new suppliers from emerging markets to expand the range of services and meet diverse client needs.

Q: How are the company's IoT devices used in local government smart city projects, do you have any examples? / A: Most projects the company is involved in use the company's ZETA IoT communication devices for environmental monitoring. Common use cases include installing water level sensors in rivers to monitor for flood risks and issue early evacuation alerts during heavy rain, and placing outdoor temperature/humidity sensors at public facilities to calculate heatstroke risk and send alerts to residents. TOPPAN acts as the primary contractor for these projects, so the company will continue to strengthen its partnership with TOPPAN to secure more project deliveries going forward.