4176.T

Company Vision & Positioning

• The company maintains its unchanged vision of creating a world where every person can live their own unique story, building a one-stop matching platform for all types of skilled work.
• The company operates under the "Cocorara Economic Zone" concept, with 9 total services spanning the original marketplace model and agent models, targeting a total addressable market of over 30 trillion yen that includes large enterprises and ongoing service contracts, in addition to the core small business and individual one-off contract segment.

Core Company Assets & Competitive Advantages

• The company holds one of Japan's largest skilled talent databases, with over 1.4 million registered skill providers and more than 1 million listed services, covering nearly every service category. The customer base has grown to nearly 6 million total registered members, with over 600,000 corporate members, supported by a strategic alliance with Mizuho Bank to access new corporate clients.
• A common shared product platform covering registration, matching, payment, and user management has been built, enabling fast deployment for new internal services and acquired M&A targets.

Four Core Growth Priorities

• 1. Marketplace matching expansion: Shift focus to growing high-value, specialized, ongoing service transactions that are not easily automated by AI, while strengthening features like client recruitment and candidate scouting to increase business and large enterprise utilization. The company will continue to identify, develop, and scale fast-growing new categories, leveraging current growth in AI-related categories, handmade goods, and on-site services.
• 2. Agent business launch and expansion: Expand upstream value provision across the four existing agent services (Cocorara Tech, Cocorara Assist, Cocorara Pro, Cocorara Consul), shifting from core freelance placement to higher-value upstream project solutions. Leverage the company's existing large talent and customer databases to gain competitive advantage over peer firms that lack sufficient in-house talent pools. Centralize information for Cocorara Tech and use AI to improve matching speed and accuracy.
• 3. AI optimization of economic zone matching: Launch a full AI assistant function in spring 2026, a chat-based tool that helps clarify vague customer needs and match users to required services, providers, or talent, lowering the barrier to use for non-technical users. The company also created a new Asset & AI Headquarters led by the CEO to drive company-wide operational efficiency and quality improvements, rolling out Gemini for all employees and Claude Code for advanced users.
• 4. M&A as a core growth strategy: Pursue M&A primarily to accelerate growth via speed and synergies, building on successful early experience in the agent segment. The company focuses on two main target areas: expanding existing service categories and entering new adjacent segments including agent sub-fields. The company follows a disciplined investment approach focused on small-to-medium sized targets, with reasonable valuation multiples that do not rely on uncertain synergies, and requires a path to operating profit profitability after goodwill amortization, to deliver compound growth.

• Full-year 2026 August term results are tracking ahead of plan, with EBITDA and operating profit already exceeding 50% of the full-year target at the midpoint (end of Q2), indicating high achievement certainty for full-year guidance.
• Revenue and net income attributable to parent shareholders are intentionally weighted to the second half of the full year based on projected Agent segment growth, and management remains confident of hitting the full-year target with ongoing execution in the second half.

1. Marketplace segment: Gross transaction value saw a slight year-over-year (YoY) increase, with sequential decline from the prior quarter explained by seasonal holiday and calendar effects. Quarterly revenue and segment profit grew, driven by cross-organizational synergies where the Agent segment's sales team acquires postings for the Marketplace. For non-legal Marketplace transactions, unique purchasing users declined, with most of the drop concentrated in transactions under 4,000 yen impacted by AI automation, while average spend per user grew due to 20,000+ yen high-value transactions that increased YoY. The legal consultation sub-segment saw both paid registered lawyer count and ARPU grow, with increasing revenue and profit. AI-related categories and in-person/handmade service categories recorded strong growth. 2. Agent segment: Achieved record high revenue and gross profit, growing 9.4% YoY after hitting a bottom in Q3 FY2025, with ongoing V-shaped recovery. Both new client acquisition and active contractor count hit new all-time highs. Recently added Frame Career, a full-time engineer staffing firm, to the group to expand capabilities alongside existing freelance-focused Cocorara Tech, aiming to create synergies, expand customer reach, and enable upsell. Within the Agent business, Cocorara Assist has restructured its organization to adopt specialized sales KPIs similar to the successful Cocorara Tech model, and expanded its service coverage to include HR BPO services.

No explicit material operational or financial risks were discussed in the provided transcript.

Q: What criteria does Cocorara use to define M&A targets that will best amplify its competitive advantage?

A: Management evaluates opportunities separately for the agent and marketplace segments. For agent targets, the company looks for small-to-medium firms that lack structured KPI management or mature incentive/personnel systems. Cocorara can contribute its expertise in structured sales operations management to scale the target's existing strengths, while integrating the target's talent and customer assets into Cocorara's centralized structured database to enable cross-organizational synergy through shared asset access. For marketplace targets, Cocorara's shared common product platform allows it to quickly handle heavy development tasks like membership and payment functionality, and it will leverage AI to further improve this capability and increase the value it can add to acquired targets.