KeyHolder,Inc. Q4 FY2025 earnings call

2025 Fiscal Year Key Operational Updates

• Completed two strategic acquisitions in 2025: acquired Red List Co., Ltd., operator of Empire Steak House Roppongi, in May, and acquired Aoi Corporation, the talent agency representing actor Hiroshi Tamaki, in August. Aoi Corporation entered a business partnership with TEAM KARASAWA, led by actors Toshiaki Karasawa and Tomoko Yamaguchi, in January 2026.
• Continued active M&A and organizational restructuring, completed intra-group absorption mergers to streamline the group structure and reduce redundant costs.
• Overhead corporate costs improved by 51 million yen year-over-year: while costs for shareholder benefits and M&A increased, active reviews of other SG&A expenses offset these increases.
• Balance sheet and cash flow updates: Current assets increased by more than 1.8 billion yen, driven by operating performance and a dividend from Nogizaka46 LLC. Total assets increased 556 million yen year-over-year to 54.83 billion yen. Operating cash flow increased by 3.178 billion yen, investing cash flow increased by 251 million yen, and financing cash flow decreased by 2.444 billion yen. Ending cash and cash equivalents increased 986 million yen year-over-year to 5.096 billion yen.

2026 Strategic Initiatives

• Group-Wide New IP Development: KeyHolder has access to over 10 billion yen in capital from 50% of the cash held by Nogizaka46 LLC (accounted for under the equity method). Management plans to strategically deploy this capital with trusted partners to develop new original content aligned with industry trends.
• New Talent Discovery: Group subsidiary bijoux is hosting a nationwide large-scale new actor audition in Sapporo, Tokyo, Osaka, and Fukuoka to discover and develop future star actors. The grand prize winner, selected in July, is guaranteed a role in a new film produced by award-winning director Michihito Fujii. The film will be co-produced by CyberAgent Group's BABEL LEVEL and KeyHolder's UNITED PRODUCTIONS, in partnership with CyberAgent.
• Segment-Specific Initiatives for Comprehensive Entertainment:
  • Work closely with Sony Music Labels to deliver successful Nogizaka46 anniversary events and annual summer national tour, to improve equity method investment profit.
  • Build on the increased media exposure for SKE48 after its体制 change, with a new single release scheduled for March 18, a new 14th generation audition, and a planned discussion session with fans and shareholders to incorporate feedback into performance improvements.
  • Novelbright will hold a 30-performance national tour across 22 cities in 2026 following a successful 2025 arena tour.
  • The talent division benefits from high-profile projects for Hiroshi Tamaki (lead role in a Fuji TV drama) and Toshiaki Karasawa (lead role in an upcoming film), which will boost group branding, create more industry connections, and drive growth for the overall segment.
• Segment-Specific Initiatives for Video Production:
  • The newly launched distribution division KeyHolder Pictures has seen strong early success: its first release Koyaban: Living in Yatsugatake Theatrical Version expanded from 22 initial screens to 72 screens due to word-of-mouth demand, and has ranked in the top 5 of the mini-theater ranking for four consecutive weeks. A second release, Kiriko's Baton YELL, is scheduled for 2026 with an all-star cast.
  • Expand overseas expansion, aligned with the Japanese government's goal to grow the overseas Japanese content market to 20 trillion yen by 2033 with 55.6 billion yen in government support. Tokyo Rock Studio is the exclusive Japanese partner for the global production network Production Service Network, allowing KeyHolder to serve as the primary partner for foreign productions filming in Japan. In December 2025, UNITED PRODUCTIONS entered a capital and business partnership with AIM Entertainment Inc., which promotes Japanese content in Hollywood, opening a direct sales route to Hollywood productions.
• Segment-Specific Initiatives for Advertising Agency: The digital advertising division completed hiring and training for expansion in 2025, and expects to deliver improved profit contribution in 2026. The division has replaced much of its legacy portfolio that was impacted by reduced spend from the脱毛 industry, now with 3x higher transaction volume from new clients including store-based beauty companies and education schools, and has won new branding and website build projects. The traditional advertising division will stabilize its relationship with the Seven & i Holdings group, and focus on developing new proactive creative projects, with several new event and digital platform projects already in progress, and has begun internal restructuring to improve profitability.
• Segment-Specific Initiatives for Logistics: Target opening new sales locations in addition to the existing 3 hubs, while accelerating restructuring to exit unprofitable business lines. Implement AI/IT-driven efficiency improvements and SG&A optimization to reduce costs, and focus on acquiring new high-quality projects via active pricing negotiation to expand market share in growing segments.
• Segment-Specific Initiatives for Other Businesses: The restaurant division will address rising rent and procurement costs from inflation, develop new customers via SNS marketing, create new menu items to attract casual diners, and target opening new locations in prime central Tokyo areas to build a stable profitable revenue base.
• Shareholder Return Initiatives: 2026 marks the 60th term since establishment, so management will expand shareholder return: planned year-end dividend is 11 yen per share, a 1 yen increase from the prior year, and will continue to consider special dividends based on performance while maintaining a focus on progressive payout ratio. Existing popular shareholder benefit programs (Olive Spa relaxation tickets and artist live ticket raffles) will continue, and a new benefit will be added: dinner vouchers for Empire Steak House Roppongi, with eligibility based on shareholding amount and holding period.

1. Comprehensive Entertainment Business: Segment profit increased 1.219 billion yen year-over-year to 1.808 billion yen. Revenue rose 167 million yen year-over-year, driven by strong Nogizaka46 event merchandise and DVD sales, plus the addition of Aoi Corporation to the group. Nogizaka46 merchandise sales were strong, but equity method profit declined year-over-year due to lapping the large 2024 graduation live and corresponding DVD revenue. SKE48 performance was soft on both revenue and profit due to higher costs from a体制 change, fewer theater performances during preparation, and stagnant CD sales. Novelbright delivered strong year-over-year revenue and profit growth from a successful arena tour. The digital content segment achieved a strong profit recovery after comprehensive overhauls of strategy and creative, with recovering real event sales and reduced new content development costs. The segment contributed 50.7% of total consolidated segment profit in 2025.
2. Video Production Business: Segment profit declined 60 million yen year-over-year to 94 million yen. Revenue declined 293 million yen year-over-year, driven by reduced broadcasting slots for special programming and fewer drama production projects. The variety production division saw revenue decline but improved profit margins via cost cutting, leading to higher year-over-year profit. The staffing division achieved growth in both revenue and profit after strengthening client relationships and expanding talent recruitment and development. New business areas including distribution and overseas projects underperformed due to upfront initial costs and delayed closing on overseas deals. The segment contributed 2.6% of total consolidated segment profit in 2025.
3. Advertising Agency Business: The segment recorded a segment loss of 25 million yen, a 199 million yen year-over-year decline in profit. Revenue declined 1.372 billion yen year-over-year. Both the digital advertising and traditional advertising divisions faced headwinds: the digital advertising division saw reduced revenue and profit due to large client advertising spend reviews plus upfront costs for talent recruitment and体制 strengthening. The traditional advertising division saw falling overall contract values and lower-than-expected profit margins on sponsorship deals, resulting in a 70 million yen loss for the division. This segment was unprofitable in 2025, dragging down overall consolidated profit.
4. Logistics Business: Segment profit reached 421 million yen in 2025. The Topos acquisition contributed full-year revenue growth to the segment, which operates from hubs in Chiba, Saitama, and Osaka, handling general cargo and storage/transportation of amusement park gaming machines. Reported profit declined year-over-year because the prior year included a 2.551 billion yen negative goodwill gain from the Topos acquisition, but underlying core profit increased year-over-year. The amusement machine division achieves higher profit margins than general cargo due to higher per-unit logistics pricing for its specialized cargo. The segment contributed 11.8% of total consolidated segment profit in 2025.
5. Other Businesses: Segment profit increased 24 million yen year-over-year to 114 million yen. The segment includes existing real estate management, Topos' wholesale, convenience store, and hotel businesses, plus the newly added Empire Steak House Roppongi restaurant business acquired in May 2025. The segment contributed 3.2% of total consolidated segment profit in 2025.

Consolidated results: Total consolidated sales revenue was 35.63 billion yen, an increase of 4.539 billion yen year-over-year. Operating profit was 1.573 billion yen, a 1.232 billion yen year-over-year decrease, which beat the initial full-year operating profit forecast by 73 million yen. Profit attributable to owners of the parent was 857 million yen, which declined year-over-year due to the recognition of approximately 500 million yen in additional interest expense on lease liabilities under IFRS accounting related to the Topos acquisition.

• Management projects year-over-year revenue and profit growth for the 2026 December fiscal year, with a full-year consolidated forecast of 36.0 billion yen in sales revenue, 1.6 billion yen in operating profit, and 1.0 billion yen in profit attributable to owners of the parent.
• Key priorities for 2026 include growing existing stable businesses, expanding connections with other industries to identify new monetization opportunities, and advancing organizational restructuring to expand business scale and improve the group's profit structure.

No explicit discussion of material new risks or operational failures was included in the available transcript. The only headwinds noted are ongoing industry and segment-specific challenges already reflected in 2025 results, including client advertising spend reviews in the advertising agency business, soft performance for SKE48, and upfront costs for new business initiatives that may take time to generate returns.

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