4196.T

• Overall Financial & Investment Positioning:

  • 2025 September fiscal year saw record high total revenue at 2.306 billion yen, up 9.9% YoY, but operating profit fell 30% YoY to 10 million yen as the company remained in a proactive pre-growth investment phase.
  • Net profit attributable to parent shareholders declined YoY due to a large special gain from a subsidiary share sale in the prior year.
  • The company holds approximately 1 billion yen in cash on hand to fund future strategic investments including M&A.
  • The company met the Tokyo Exchange Standard Market listing maintenance criteria for traded market capitalization as of September 30, 2025 after previously failing to meet the requirement.

• Core Competitive Advantages:

  • End-to-end fully in-house marketing support provides advantages in communication, cost, and speed for clients.
  • Established a sustainable inbound lead generation system that leverages the company's consumer platform to generate ~14,000 qualified leads per period from organic content such as proprietary research reports and marketing webinars.
  • Accumulated deep proprietary marketing knowledge from over 3,000 annual projects, accessible to all client-facing consultants to improve proposal quality.

• Key KPIs:

  • Total marketing consultants increased by 6 YoY to 58. Mid-career hiring remains challenging, but new graduate hiring is progressing on track.
  • Total clients grew 72 YoY to a record high 792 companies.
  • Average customer revenue per client increased slightly YoY to ~2.8 million yen.

• Q4 Operational Initiatives:

  • Launched Looply, a new micro-influencer marketing support service that leverages 1,000-5,000 follower general creators on Instagram and TikTok to generate trusted experiential word-of-mouth content for client brands.
  • Rolled out a new subscription pricing plan for the self-service online research tool Research DEMO!, switching to a flat monthly model that lets clients buy only the volume they need. The company now handles all consumer monitor incentives in-house to improve client convenience, which is expected to drive stable recurring revenue.

• For the 2026 September full fiscal year, management guides a new record high total revenue of 2.8 billion yen, with operating profit of 0.1 billion yen and ordinary profit of 0.12 billion yen, representing a large year-over-year increase in profitability after the investment phase.
• The company will continue to position this period as a pre-growth investment phase, prioritizing base building for long-term growth over near-term profits.
• Digital Marketing & PR is positioned as the new core growth driver, with projected 93% year-over-year revenue growth to 0.8 billion yen. Management has already put in place dedicated organizational and sales structures from the start of the period to hit this target, supported by the digital marketing market's projected 13.8% annual average growth (far higher than the 5.5% growth of the mature market research industry).
• Core KPIs guidance: target 74 total marketing consultants, 900 total clients, and 3 million yen average revenue per client, all up from 2025 levels.
• Management plans to actively pursue strategic investments including M&A in the marketing support space, prioritizing targets that can create clear synergies with existing business and expand the value the company can offer to clients.
• No downward revisions of prior guidance were noted; this is the initial published guidance for the 2026 fiscal year.

For the 2025 September fiscal year, total company revenue hit 2.306 billion yen, an increase of 9.9% year-over-year. 1. Insight Driven: achieved double-digit year-over-year revenue growth, no specific absolute value provided. 2. Customer Driven: achieved double-digit year-over-year revenue growth, no specific absolute value provided. 3. Digital Marketing & PR: management focused on building out service infrastructure this period as a future growth driver, and customer inquiries have grown sharply recently, no specific absolute value provided. 4. Customer Success & Other: decreased revenue year-over-year, with a 50 million yen negative impact from a former subsidiary removed from consolidation after a share transfer. For 2026 September fiscal year guidance by segment: 1. Digital Marketing & PR: projected 93% year-over-year revenue growth to 0.8 billion yen, positioned as the new core growth driver for the whole company. 2. Insight Driven: projected 7.5% year-over-year revenue growth. 3. Customer Driven: projected 6.6% year-over-year revenue growth. Revenue contribution percentages were not disclosed for any segment.

• Mid-career hiring of experienced marketing consultants continues to face challenging market conditions and hiring difficulties.
• Future new graduate hiring is also expected to become more competitive and difficult.
• The company is currently in an extended investment phase, which has kept operating profit low and pushed return on equity (ROE) down to a low 3% level in the near term.
• Full returns from current human capital investments are not expected to materialize for 2-3 years, meaning ROE improvement will be gradual.

Q: Neo Marketing has historically focused on revenue per consultant, but your presentation did not discuss AI-driven efficiency or per-head profitability improvements. What are your plans for this area? / A: Management is already rolling out AI adoption internally, starting with efficiency gains for sales teams in tasks like proposal writing and information gathering. The primary initial focus is reducing labor hours and headcount needs for day-to-day delivery of client work, with the explicit goal of cutting costs to improve profit margins. For example, the company is implementing an AI system to automate the full process of creating and distributing research surveys to consumer monitors, a workflow that previously required full manual handling by employees.

Q: Does this mean AI is being used first for cost cutting rather than top-line growth, and how does AI interact with your consultant hiring strategy to drive top-line growth? / A: The core priority for AI is freeing up consultant time from administrative and back-office work so consultants can spend more time directly engaging with clients. This increased client-facing time is expected to improve consultant productivity and increase revenue per consultant, which will ultimately flow through to top-line growth. Management views AI as a core embedded part of how consultants operate today, rather than a separate initiative.

Q: Mid-career consultant hiring has been challenging. What are your response strategies and how are you progressing with new graduate hiring and training? / A: The company continues to ramp up new graduate hiring, and has no plans to lower hiring standards for mid-career roles, continuing to hire only carefully selected candidates. Management expects new graduate hiring to become more competitive going forward, but remains committed to continuing investment in this hiring channel.

Q: ROE is currently at a low 3% level. What is your top priority initiative to improve ROE? / A: The primary reason for low ROE is that the company is in an active investment phase that has kept near-term operating profit low, after historically having much higher ROE when operating profit was near 3 billion yen. Management expects ROE to naturally improve as the investment phase concludes and revenue and profit expand over time.

Q: When will current human capital investments start contributing to ROE improvement? / A: Based on historical patterns, new graduate hires start delivering meaningful positive results in their second year and become fully productive by their third year. Management expects contributions to ROE improvement to start appearing in the 2026 and 2027 fiscal years.