AnyMind Group Inc. Q4 FY2025 earnings call

• Overall 2025 Results: All core financial metrics from revenue to net income exceeded the revised full-year guidance published in May 2025. Growth was driven primarily by the corporate brand support business, with double-digit growth maintained for both full-year revenue and gross profit. Q4 2025 saw continued growth trends, with operating profit declining YoY due to one-time expenses for warehouse expansion and inventory provisioning, but net profit improved quarter-over-quarter supported by foreign exchange gains from yen depreciation. The company has maintained a strong and safe balance sheet, with total goodwill from 12 M&As completed by 2025 at approximately 3.8 billion yen, for a goodwill-to-net-asset ratio of 0.23x, which remains very safe even after including the impact of 3 M&As completed in January 2026.

• Product and Operational Strategy:

  • The company prioritizes social commerce as a core growth focus, and provides integrated social media marketing and social commerce support for corporate clients across the entire Asian region, leveraging a unified competitive advantage from the combination of data & product, operations, and sales across 15 Asian markets. The integrated Business Process as a Service (BPaaS) model combining technology and operations has established strong competitive positioning in the Asian market.
  • AI integration is positioned as a driver for both accelerated growth and improved profitability. The company notes that while AI reduces differentiation for standalone software, it increases the competitive advantage of companies with strong operations and sales capabilities. The company already has an integrated operational structure, and can embed AI into workflows quickly, with short-term benefits from improved efficiency and cost reduction, and long-term benefits from strengthened competitive advantage across Asia.
  • Strategic restructuring of Creator Support: The company is shrinking support for short-form video focused areas with limited medium-term profitability and low synergy with core corporate brand support, and concentrating resources on social commerce-aligned areas including talent creators with high affinity for corporate brands, commerce creators that drive EC sales, and live commerce streamers. The 0.5 billion yen expected operating profit headwind from this restructuring in FY2026 is fully included in guidance, with renewed profit contribution growth expected from 2027 onward.
  • Three recent M&As completed in January 2026 have built out an end-to-end social commerce support capability: MISM strengthens creative supply to accelerate demand generation, Bcode strengthens live commerce centered purchase conversion, and San Smile expands demand distribution to offline retail. This expands the company's prior marketing-led EC-focused support to a fully integrated model covering creative production, live streaming, EC, and offline distribution.
  • Key 2026 growth priorities are: (1) AI-driven operational efficiency improvement across all sales, creative, and operational processes to simultaneously improve productivity and customer value; (2) Expansion of the EC/commerce segment, leveraging the company's pan-Asian footprint to accelerate cross-border trade and build a one-stop support capability across Asia; (3) Deepening relationships with multi-market regional clients to maximize lifetime value per client by leveraging the company's integrated marketing-to-EC support capability.

• Product-specific Operations:

  • Marketing business within corporate brand support maintained 10% YoY gross profit growth in Q4 (with slower growth driven by strategic resource reallocation to higher-growth EC support), and expects growth rate recovery in 2026 from strengthened sales organizations. The segment has over 1,500 total client companies with a diversified customer base across industries, balanced 40% Japanese, 37% global, 24% local client split, and influencer marketing grew over 20% across all regions in FY2025.
  • D2C/EC support: For creator-focused brands, count remained stable while per-brand revenue grew. For corporate EC support, total brand count grew driven by new client acquisition in Southeast Asia and the consolidation of Vibula, with per-brand revenue also growing as deal sizes expanded. The company operates 65 dedicated in-house live commerce studios across Asia, and its AI live commerce platform AnyLive has delivered proven results enabling long-form streaming while reducing internal operational load.

1. Corporate Brand Support Business: 31% YoY gross profit growth in FY2025, contributed 73% of total gross profit (up from 65% in prior year). Within the segment, Marketing business achieved 10% YoY gross profit growth in Q4, D2C/EC business achieved 81% YoY gross profit growth in Q4, and corporate-focused EC support achieved 162% YoY growth. By region: +28% YoY in Japan/Korea, +41% YoY in Southeast Asia, +14% YoY in Greater China/India. 2. Publisher Support Business: 7% YoY gross profit growth in Q4 FY2025, contributed 14% of total FY2025 gross profit. The segment achieved stable growth, with per-publisher revenue and gross profit improving despite stricter partner screening reducing total publisher count, driven by growth in high-potential content areas and AI-enabled in-house media revenue growth. 3. Creator Support Business: 26% YoY gross profit decline in partner growth segment in Q4 FY2025, contributed 12% of total FY2025 gross profit. The segment saw negative growth in Southeast Asia and Greater China/India due to external industry changes, but achieved growth in Japan from business diversification. Following strategic restructuring, total contracted creator count fell from 2,101 (end-September 2025) to 1,237 (end-December 2025), but per-creator revenue and gross profit increased due to one-time copyright-related revenue recognition. 4. Full-year 2025 consolidated results: 13% YoY sales revenue growth, 17% YoY gross profit growth. Operating profit reached 1.798 billion yen, with an operating margin of 3.1%. Profit attributable to owners of the parent company reached approximately 0.9 billion yen. Q4 2025 operating profit reached 0.535 billion yen, adjusted EBITDA reached 1.134 billion yen.

• FY2026 (ending December 2026) guidance: 79.1 billion yen sales revenue (+38% YoY), 30.3 billion yen gross profit (+38.4% YoY), 3.06 billion yen operating profit (+70.1% YoY). Operating margin is expected to improve from 3.1% in FY2025 to 3.9% in FY2026. Organic gross profit growth (excluding M&A) is expected to be 22% YoY. All 3 January 2026 M&As are fully included in the guidance, but no future additional M&As are incorporated, so upside exists if further M&A activity occurs.
  • The mid-term 2027 target of 105 billion yen sales revenue, 38.5 billion yen gross profit, 6.0% operating margin, and at least 6.3 billion yen operating profit remains unchanged. The company plans to hit this target via accelerated growth of existing core corporate brand support, restructuring of publisher/creator networks and strategic M&A to expand social commerce, and AI-driven efficiency improvement for better profitability.
  • Dividend guidance for FY2026 maintains the prior year level of 2.0 yen per share at period end, as the company prioritizes capital allocation for growth investments.

• External industry changes have negatively impacted the traditional creator support business, leading to revenue declines in the segment that pressured overall operating profit in 2025.
  • The strategic restructuring of the creator support business is expected to create a 0.5 billion yen operating profit headwind in FY2026, even after full incorporation into guidance.
  • D2C/EC business expansion has increased variable costs including IT-related expenses, logistics costs, and promotional expenses, which has limited near-term operating profit improvement.
  • The low-margin D2C/EC business is growing faster than higher-margin segments, which creates headwinds for overall company margin improvement and adds pressure to hit the 6.0% 2027 mid-term operating margin target.
  • Global web advertising unit price growth has stagnated, which creates pressure for the publisher support business.

Q: As the proportion of the lower operating margin D2C/EC business increases going forward, what is the path to hitting the 6.0% full company operating margin target for FY2027?

A: Personnel costs account for ~60% of selling, general and administrative expenses, so optimizing the personnel cost ratio and improving productivity is the key to margin improvement. There is still significant room for margin improvement in both marketing and EC within corporate brand support: for EC, margin improves with scale as fixed costs are covered by growing volume, and process improvement via AI-driven automation will further boost margins. We are steadily advancing AI-driven process improvement from this fiscal year to next to build the foundation for hitting the mid-term target. For the marketing business, while high-profit countries already achieve over 10% operating margins, we are standardizing processes from high-profit markets, combining that with AI automation, and rolling out these standardized automated processes to lower-profit markets, with new tools already being rolled out in Q1 2026 to drive improvement.

Q: What specific initiatives and improvement prospects exist for improving profitability via operational efficiency in the D2C/EC business?

A: Margin improvement comes from two core factors: first, natural margin improvement from scale that efficiently covers fixed costs; second, process optimization via automation of existing operations. As the EC business grew rapidly from 2024 to 2025, we prioritized growth over efficiency and some inefficiencies developed in processes and operations. We can drive meaningful profitability and productivity improvement by resolving these inefficiencies one by one, via standardized operations paired with AI integration.

Q: For the 220 brands currently supported in corporate EC support, what is the average contract duration and churn rate for these recurring contracts?

A: Corporate EC support uses recurring continuing contracts with ongoing monthly support, creating a stable recurring revenue, stock-type business structure. EC support operations are complex, with switching costs high because even small changes like warehouse inventory allocation impact profitability, so client switching is not easy. The business is still early stage, so most clients are still under active continuing contract, and churn is concentrated in special cases: either originally one-off transactions, or cases where we deprioritized smaller clients for strategic reasons.

Q: What is your approach to post-merger integration (PMI) for your active M&A strategy, and how do you drive corporate value improvement via M&A?

A: When we pursue M&A, we first define target segments and countries, build a target list, and proactively approach targets. From the early stage, the CEO and CFO directly engage with target management, with discussions based on the premise that target management will remain with the business, and we prioritize aligned strategic direction and shared alignment with our growth story, similar to a hiring process. We deepen discussions on business understanding and preparation before close, and verify synergy from the early stage. After close, we quickly assign dedicated resources to prioritize early synergy realization, advance system integration where possible, and focus on aligning different organizational cultures. We recognize that M&A does not immediately impact valuation, and that valuation will follow once synergy materializes and M&A becomes a driver of growth, so we currently focus on partnering with companies that fit our growth strategy and delivering tangible synergy.

Q: What areas deliver synergy from the recent three M&As, and what is the revenue growth target for these acquisitions going into 2027?

A: Synergy is centered on strengthening social commerce capabilities, with cross-selling leveraging both parties' customer bases expected to deliver the greatest impact. We already have a unique framework that takes social-trending products from TikTok Shop to other EC channels and ultimately offline retail, and the acquisition of San Smile strengthens this supply chain to drive higher revenue per client and expand total client count, with clear synergy existing here. We do not set separate standalone growth targets for each acquired company, as they are at different business stages: the two smaller acquired companies are in high-growth stages, so we expect meaningful high growth potentially doubling sales based on historical trends, while San Smile is larger and more stable, but we still see sufficient potential for 20-30% growth from cross-selling leveraging our network and integrating offline retail, EC, and marketing capabilities.

Q: Are there any negative impacts from AI evolution to your business, and what areas of your localized BPaaS model can never be fully covered by AI even as AI advances?

A: AI evolution is a large positive opportunity for us that depends on our speed of adoption. We have pursued an AI-native company transformation since last year, and AI has already fundamentally redesigned our development process to multiply development speed, so rapid adaptation to this change will determine competitiveness, and we are driving company-wide transformation across all job functions. That said, communication-focused work still cannot be fully completed by AI: for example, close collaboration with high-performing creators in social commerce requires relationship building and detailed coordination that remains a human-led last mile. Even with AI-driven efficiency gains, final client-facing communication and building localized operational capabilities across different country markets will continue to require human judgment.

Q: What is the difference in profitability and business opportunity between the TikTok Shop market in Japan versus overseas markets, and what is your view on future growth potential?

A: There is a clear phase difference: Japan is still in the 0-to-1 launch phase, while Southeast Asia is already in the expansion phase. Early stage growth in Southeast Asia was driven by new Chinese and Korean brands leveraging TikTok Shop early, and we expect the same trend to play out in Japan going forward. From 2026, the Japanese market will enter a growth phase, with large Tier 1 brands expected to start full-scale entry, and since we have strong capabilities supporting large brands, we expect significant growth in support opportunities. Growth potential is very large, which is one of the reasons we acquired San Smile. We expect the trend of social-trending products selling across other EC channels and offline stores to accelerate, and we already have the framework to capture this trend, so we plan to leverage this positioning to drive further growth.