MEIKO NETWORK JAPAN CO.,LTD. Q4 FY2025 earnings call

• Core Strategic Framework: Advancing the 3-year mid-term management plan "MEIKO Transition", with two core pillars: Business Transition (evolving the business portfolio to become a comprehensive human resources support group serving all ages from infants to seniors) and Human Transition (upgrading people and organization).
• Business Transition: Portfolio Evolution
  • Focused on improving profitability of the core direct management Meikou Gijuku business, upgrading both hard infrastructure (classroom renovations, improved learning environments) and soft capabilities (digital marketing shift, patented 10-step learning method, hospitality certification for staff, DX of classroom operations) to better support individual student needs.
  • Launched the "ONE MEIKO" initiative to maximize synergy between direct management operations and 5 Meikou Gijuku subsidiaries, integrating shared training, group-wide optimal new store strategy, and rolling out successful direct management best practices to franchise locations to drive franchise growth and attract new franchisees.
  • Human resources and training business grew over 30% year-over-year, led by Meiko Career Partners which won multiple government contracts for Japanese language and workplace retention support for foreign workers. Simple, a nursing and nutrition staffing agency, also delivered strong growth.
  • Established Meiko Mirai to address growing diversified education demand, with two new lines of business: support schools for students at correspondence high schools, and free schools for elementary and middle school students struggling with traditional in-person schooling.
• Business Transition: Target Customer Expansion
  • Leveraging core education capabilities to expand beyond traditional K-12 students to all age groups. Meiko Wellness, which supports neurodivergent children, expanded service coverage to adults and opened its first adult-focused supported living facility in Saitama Prefecture.
• Business Transition: Alliance Strategy Acceleration
  • Pursues cross-industry alliances to solve social problems and create new business opportunities. Partnered with Seino Holdings and Global Trust Networks to launch HanaLogi, a program to train Southeast Asian women as commercial drivers in Japan, addressing labor shortages in the logistics industry through the group's core education expertise.
• Business Transition: Group Alliance Implementation
  • Merging the two group Japanese language schools under the single "Waseda EDU" brand, to be completed in April 2026, creating a 2,000-student scale brand that will capture economies of scale in student recruitment and operations.
• Business Transition: Safe and Secure Environment
  • Completed 100% installation of security cameras across all direct and franchise locations that interact with minors, and completed 100% rollout of the MVCL psychological aptitude test for staff across all franchise locations (already fully deployed in direct management).
• Financial and Investment Strategy
  • 8 companies have joined the group via 4 M&As and 4 new establishments over the past 4 years, and investments in these new businesses began delivering profitable results in the 2025 August fiscal year. The company will continue to actively pursue M&A, new business development, new store expansion, and DX investment.
• Human Transition
  • Held company-wide town halls following the 2024 management team refresh to promote purpose alignment and employee engagement. Currently has 36 employees participating in group-wide cross-company rotation to develop future executive leadership, and the new talent management system is now fully operational. Promotes hospitality certification across the group and is building a structured "lifelong Meiko" talent development pathway from student to instructor to full-time employee.

1. Meikou Gijuku Direct Management Business: Revenue of 14.504 billion yen (58.4% of total consolidated revenue), up 1.149 billion yen year-over-year; operating profit of 1.819 billion yen, up 565 million yen year-over-year. Classroom count decreased by 13 to 476, with growth driven by increased student numbers and improved profit margins.
2. Meikou Gijuku Franchise (FC) Business: Revenue of 4.173 billion yen (16.8% of total consolidated revenue), up 27 million yen year-over-year; operating profit of 1.111 billion yen, down 5 million yen year-over-year. Classroom count decreased by 32 to 1,184 following area restructuring including unprofitable classroom closures; royalty revenue grew with higher student numbers, but this was offset by declines in textbook and advertising sales and increased selling expenses.
3. Japanese Language School Business: Revenue of 1.486 billion yen (6.0% of total consolidated revenue), up 134 million yen year-over-year; operating profit of 168 million yen, up 88 million yen year-over-year. Total enrolled students increased by 246 to 1,934, driven by the ongoing recovery of JCLI Japanese School after COVID-19.
4. Other Businesses: Revenue of 4.662 billion yen (18.8% of total consolidated revenue), up 935 million yen year-over-year; operating profit of 468 million yen, up 410 million yen year-over-year. Growth was driven by revenue increases at Meiko Career Partners and Kids Business, full-year consolidation of Meiko Wellness, Simple turning a net profit, and improved profitability across newly profitable ventures. Within this segment, the Kids Business grew 15% annually on average over the past 10 years, led by after-school business growth despite a revenue drag from exiting the programming business.

Total combined student numbers across all Meikou Gijuku businesses increased 2.3% year-over-year, gaining market share amid ongoing population decline.

• Upward revision to the 2027 August fiscal year (final year of the mid-term plan) targets: net sales revised up 2.5 billion yen to 26.5 billion yen; operating profit revised up 500 million yen to 2.0 billion yen; EBITDA revised up 500 million yen to 2.5 billion yen.
• 2026 August fiscal year consolidated guidance: net sales of 25.5 billion yen, operating profit of 1.8 billion yen, set to align with the raised mid-term final year targets.
• 2025 August fiscal year full-year dividend: raised 1 yen from the original forecast to 27 yen annual dividend per share.
• 2026 August fiscal year dividend forecast: 28 yen annual dividend per share (14 yen per interim, 14 yen per year-end), a 1 yen increase year-over-year. Dividend policy targets a 5% to 7% dividend on equity (DOE) to deliver stable shareholder returns.
• The previously announced third-party allotment to Meiko Education Research Institute has been canceled following negotiations.

No specific material operational risks, financial risks, or operational failures were discussed or disclosed in this earnings call transcript.

No question and answer section was included in the provided earnings call transcript.