4735.T

• Milestone and Recognition

• Kyoshin celebrated its 50th anniversary of founding in June 2025, after expanding from its original cram school business to a multi-segment group serving people across their entire lifespan.
• Kyoshin was awarded the Konjuhōshō (Dark Blue Ribbon Medal of Honor) for its long-standing social contribution efforts, which was recognized as an official public endorsement of the company's mission.
• The company hit 9 consecutive periods of record-high revenue, reaching 26.455 billion yen in 2025 May term (1.4% year-over-year increase), though profits declined sharply due to cost pressures.
• Cash and cash equivalents grew 493 million yen year-over-year to 5.121 billion yen, with stable operating cash flow supporting a solid financial base for future expansion.

• Core Business Strengths

• Learning Cram School: 50 years of regional brand trust; TOPΣ university entrance division has a 2-in-3 current student pass rate for public universities (vs national average 1-in-4), and ranked 1st in "score improvement" in the 2024 Oricon Customer Satisfaction Survey for Kinki region current student university entrance cram schools.
• English Conversation: Children-focused Universal Campus is Japan's first Oxford University Press authorized English school, with AI learning tools delivering strong student outcomes; adult Coper English serves flexible online and in-person needs in Tokyo.
• Japanese Language Schools: KLA is one of Japan's largest Japanese language school networks with multi-location regional specialization, won the 2024 Kansai Management Quality Bronze Award, and focuses on both language ability and character development.
• Childcare Centers: Combines strict safety with educational programming (early childhood education, English, programming) with twice-yearly progress sharing with parents, a unique industry offering that drives high parental choice.
• Nursing Care: Operates 54 facilities across 7 prefectures, focuses on affordable safe care with monthly emergency/disaster training; launched the education-infused Pitarabo rehab-focused day service for low-care seniors in April 2025, which has received strong positive feedback.

• Strategic Priorities

• Innovation of existing businesses: Consolidate underperforming cram school and childcare locations to improve per-site profitability, actively deploy AI to boost learning quality and operational efficiency, and adapt to labor shortages with new service models.
• Improve customer satisfaction: Prioritize character development alongside skill growth, track true customer satisfaction via KPI management for cram school and nursing care, and strengthen brand and employee engagement.
• New business creation: Follow a "dream-focused trial and error" philosophy, and have already begun expanding rehab day services and launching new after-school childcare programs.
• Global expansion: Strengthen global education operations in Australia and new markets, expand international human resource exchange to meet growing foreign labor demand in Japan, combining Japanese language education with career support to drive long-term stable revenue.
• Human capital management: Use the three core growth pillars of Reaching, Amoeba Management, and Management Quality Improvement to drive individual and organizational growth; strengthen middle management, revise evaluation systems to reduce turnover, and deliver AI/DX training to build next-generation competitive capability.

• Kyoshin has formally changed its fiscal year end from May to February, aligning financial reporting with internal management accounting to better reflect seasonal revenue fluctuations. The change was approved by shareholders at the 2025 general meeting. • The 2026 February term will be a 9-month irregular transitional fiscal year (running from June 2025 to February 2026), with forecasted revenue of 20.058 billion yen, forecasted ordinary profit of 308 million yen, and forecasted net income attributable to parent company shareholders of 71 million yen (all lower than full-year prior results due to the shortened period). • Kyoshin maintains a 30% payout ratio dividend policy based on parent net income. The forecasted dividend for the 2026 February term is 2.78 yen per share, which reflects the 9-month shortened fiscal period and follows the established payout policy.

1. Learning Cram School Business: Both revenue and profit decreased year-over-year. Average student counts hit 97% of prior year levels, driven by declining school-age population in core target areas. No full absolute segment revenue/profit was reported in the provided transcript.
2. Language-Related Business: Total segment revenue was 4.342 billion yen, a 0.8% year-over-year decrease; segment profit was 76 million yen, a 22.2% year-over-year decrease. This segment accounts for approximately 16.4% of total consolidated revenue. Domestic English conversation and Australian overseas operations saw student count declines from demographic shifts and stricter student visa rules, but Japanese language education for international students grew (average student count up 5.4% year-over-year) and international human resource exchange made major strategic progress.
3. Childcare and Nursing Care Business: Total segment revenue was 12.277 billion yen, a 5.1% year-over-year increase; segment profit was 846 million yen, a 1.4% year-over-year increase. This segment accounts for approximately 46.4% of total consolidated revenue (nearly half of total company revenue). Childcare maintained slight enrollment growth despite a 4% national decline in the 0-5 age group, nursing care maintained high occupancy amid growing demand, and the embedded food service business offset rice price inflation with sales expansion and menu adjustments.

• Demographic risk: Declining school-age population has driven reduced student counts in both cram school and domestic English conversation businesses, leading to year-over-year revenue and profit declines for these segments. • Regulatory and geopolitical risk: Stricter student visa policies in Australia reduced visa issuances for Kyoshin's Australian operations by ~40% year-over-year, driving lower international student numbers and reduced segment profit for language-related operations. • Cost pressure risk: Wage improvement initiatives increased total labor costs by approximately 560 million yen year-over-year, rice price inflation increased food service raw material costs by ~90 million yen, and payment fees rose by ~140 million yen, combining to drive a 41.8% year-over-year decline in consolidated operating profit. • Labor market risk: Widespread industry labor shortages create operational challenges that require adaptation via new service models to maintain service quality and profitability.

No Q&A section was included in the provided earnings call transcript.