5034.T

• Core Business Positioning and Growth Trajectory

  • unerry has grown into a Japanese-origin global top 10 big data company, currently accumulating 850 million smartphone location (foot traffic) IDs, ranking top 10 globally in active users, with combined multi-type data tied to foot traffic to form consumer behavior big data. The company operates under the "data gravity" principle: larger data volumes attract more complementary data, create new added value, and improve profitability in a self-reinforcing cycle.
  • The company offers three core cross-sellable services: Analysis & Visualization, Behavior Change, and One to One, creating win-win growth through cross-selling that drives customer success and revenue growth. It currently focuses on retail, food service, advertising, urban development and consumer goods clients, with plans to expand to tourism, mobility, finance, manufacturing, healthcare, real estate, logistics and agriculture. The company is now in its second act growth: the scale phase.
  • Recurring customers (defined as clients with over 1 year of partnership) reached 171, +35% YoY, with recurring revenue accounting for over 90% of total revenue, 94% specifically. Average recurring customer ARPU is 23 million yen, with net revenue retention of 116%, meaning existing clients grow revenue 16% YoY through cross-selling, with new client additions further driving overall growth.
  • The company won 42nd place in Deloitte Technology Fast 50 2025 (6th consecutive year of ranking), and won Google Cloud Partner All Certification Holders 2025 for its engineer holding all Google Cloud certifications, which enabled effective infrastructure cost control amid growing data volumes.

• Mid-term Growth Strategy and M&A of Blogwatcher

  • The company's mid-term target is 10 billion yen in revenue by the June 2028 fiscal year, achieved through growth across four business lines: Retail DX (base), Retail Media, Smart City, and Global. The four core strategies are: Data Scaling Law Strategy, Key Partner Strategy, Flywheel Product Strategy, and Human Capital Strategy. This fiscal year's key priorities are AI product development, new sales structure construction, and accelerating growth via capital (M&A/investment).
  • Data Scaling Law holds that data only creates value once it exceeds a certain volume threshold: more data enables granular analysis of smaller locations and less trafficked areas, so continuous data expansion is required. The combined data of unerry and Blogwatcher will reach ~1 trillion records per year, enabling the company to build an AI Ready data infrastructure that can connect with multiple AI models. The company's long-term vision is to build a "World Model" that simulates real human behavior in the real world, enabling prediction and planning for use cases like new store sales forecasting, ad effectiveness optimization, urban development and policy impact simulation.
  • unerry will acquire 100% of shares of Blogwatcher from Recruit (80%) and Dentsu Group (20), expected to close on May 1, 2026, with consolidation starting from the next fiscal year (July 2026 onward). Blogwatcher was founded in 2007, currently has ~2 billion yen in annual revenue and 125 million yen in operating profit, and operates a similar SDK-based location/foot traffic data collection business, with existing experience in applying data to urban development, tourism, real estate and advertising, complementary to unerry's retail-focused positioning.
  • Expected synergies from the acquisition: (1) Data: Combined 1 trillion annual domestic records creates a leading AI Ready data infrastructure; (2) Technology/AI: unerry has strengths in retail analysis/AI, while Blogwatcher has strengths in urban development AI and building AI Ready data environments, creating mutual complementarity; (3) Business: unerry is focused on retail, Blogwatcher on urban development/advertising, creating complementarity; both share identical privacy management frameworks and are active contributors to LBMA Japan industry guideline development; unerry specializes in high-value pricing for select clients, while Blogwatcher has scalable processes and broad customer touchpoints, creating an end-to-end structure from initial adoption to high-value upgrade, strengthening global competitiveness in foot traffic data.

• Full-year 2026 June fiscal year guidance is maintained with no changes. The company remains confident in achieving the full-year target, despite the lower 10-13% operating profit progress rate (43% revenue progress rate) in the first half, which is mainly caused by Q1 strategic upfront investment and the company's inherent structural pattern of most profit being recognized in the second half.
• The 10 billion yen mid-term revenue target for June 2028 fiscal year was originally based on organic growth, and the Blogwatcher acquisition will add non-organic growth to the base, significantly increasing the probability of achieving and potentially exceeding the target.
• Overseas business strategy remains unchanged: Retail DX will launch first, followed by Smart City and Retail Media, then Global business expansion, and Global is expected to be a key contributor to 10x larger long-term growth beyond the 10 billion yen mid-term target.

By service line: 1. Analysis & Visualization Service: 306 million yen, +18% YoY, accounting for 26.5% of total Q2 revenue, with a gross margin of 86%. 2. One to One Service: 246 million yen, +51% YoY, accounting for 21.3% of total Q2 revenue, with a gross margin of 37%. 3. Behavior Change Service: 603 million yen, +17% YoY, accounting for 52.2% of total Q2 revenue, with a gross margin of 26%. By business line: 1. Retail DX Business: Grew steadily in line with plan, handover to new sales structure completed, new customer acquisition and cross-selling to existing customers progressed as planned, and adoption of the sales simulator for retail and food service expanded. 2. Retail Media Business: Grew YoY but slightly missed plan, as some large expected year-end-end/new-year projects were postponed, though the number of prospects and projects increased steadily through partner training and co-marketing. 3. Smart City Business: Progressed in line with plan, both traditional analysis & visualization and behavior change services grew strongly, with last year's organizational strengthening driving revenue growth this period. 4. Global Business: Grew in line with plan, led by extremely strong demand for inbound services, with increasing numbers of projects for overseas companies entering Japan and Japanese companies expanding overseas.

• There is inherent quarterly revenue and profit volatility, as analysis & visualization services include a large amount of one-off spot projects in addition to recurring subscription revenue, and the company's overall profit structure is heavily skewed to the second half of the fiscal year, leading to lower first half progress rates that can appear concerning to investors.
• Regulatory risk related to location information collection: While Japan is considering revisions to the Personal Information Protection Act, no additional location-specific regulations are expected. The company has already fully adapted to Apple's enhanced privacy regulations launched in past years, and even though opt-in rates per app have declined, its model of partnering with many different apps means overall ID volume continues to grow, mitigating regulatory risk.
• Retail Media growth in the first half was slightly below plan due to project delays, creating near-term downside risk to revenue.

Q: Given the current low profit progress versus full-year guidance, what is your view on the likelihood of achieving full-year targets?

A: Q2 was broadly in line with plan. The slight half-year delay is entirely due to Q1, and the overall progress is between last year and the year before last. We have no plans to change our full-year forecast at this time, and will work steadily to achieve the target.

Q: What are the specific drivers of margin improvement in the second half?

A: Our business structure inherently generates more profit in the second half, driven by both higher revenue recognition in the second half and more high-margin Analysis & Visualization service revenue being recognized in the second half, so both top-line growth and margin expansion will drive profit improvement.

Q: Are you considering a listing transfer to the Prime Market?

A: We have targeted Prime Market listing as a goal since our IPO over 3.5 years ago, and have been progressing internal control improvements accordingly.

Q: Does the original 10 billion yen mid-term target include M&A-related non-organic growth?

A: The original target was primarily centered on organic growth. This M&A will add growth on top of organic, which greatly increases the likelihood of hitting 10 billion yen, and there is upside potential to exceed the target.

Q: Why was unerry able to acquire Blogwatcher when other potential buyers were likely interested?

A: The key factor was the long period of mutual understanding and trust building that started with our business partnership in 2024, and we already had a long-standing relationship through collaboration on industry guideline development at LBMA Japan, even before the business partnership. This long-standing mutual trust and understanding made the acquisition possible.

Q: Q2 operating profit growth is 17% YoY, which looks slower than previous periods. Should we be concerned about the full-year progress rate?

A: Our profit is structurally concentrated in the second half, driven by Q3 revenue concentration and more high-margin analysis projects in the second half. The current progress rate is between the range of the prior two years, and while it is slightly behind plan, we still aim to achieve the full-year target.

Q: How much will ID volume increase after integrating Blogwatcher?

A: We are still reviewing the exact impact on total ID count, and will disclose additional information separately once finalized.

Q: What service opportunities will this M&A create with ad tech vendors?

A: Ad tech vendors that focus on geo-targeting need to source location/foot traffic data from suppliers like unerry and Blogwatcher. Combining the two companies strengthens our position as a data supplier, increasing our negotiating power and competitive advantage in this market, which is the key benefit of the combination for ad tech partnerships.

Q: What is your stance on price increases?

A: We have never raised prices in our history, and have no plans for price increases at this stage. Our business model relies on cross-selling: we enter the market with relatively low-priced entry products like "Shopper Mieru", then expand revenue by cross-selling Behavior Change and One to One services, which can increase customer revenue by over 100x. Cross-selling drives far more revenue growth than moderate price increases in our current growth stage, though we do not rule out price increases in the future.

Q: Is your 5 billion yen overseas revenue target in 2.5 years still on track, and what is the launch order for overseas businesses?

A: There is no change to our overseas strategy. The launch order remains: Retail DX first, followed by Smart City and Retail Media, then broader Global business expansion. Global is expected to be a major contributor to 10x growth beyond our 10 billion yen mid-term target.

Q: What is your approach to partnerships with other mobile carriers beyond NTT Docomo?

A: We maintain good relationships with all major mobile carriers. When clients need foot traffic data, we often combine carrier data with our own data to deliver the maximum value to clients. We operate as a collaborator rather than a competitor with all mobile carriers.

Q: What is the size of the retail media market, and what are the differences between Japan and the US?

A: The US retail media market is expected to reach nearly 1 trillion yen soon, which is larger than Japan's entire total advertising market (around 700 billion yen). 80-90% of US retail media is online, centered on EC platforms like Amazon and Walmart. In Japan, online retail media is still underdeveloped, and retail media is centered on in-store physical locations (such as convenience store checkout signage), which means unerry's foot traffic data for measuring in-store ad effectiveness fills a critical need, and there are no strong comparable players to unerry for physical retail media in the US, since the segment is underdeveloped there.

Q: How does unerry plan to enter the US physical retail media market?

A: We expect physical retail media will emerge and grow in the US in the future, just as online retail media will grow in Japan. The entry sequence differs between the two markets, and our proven physical retail media expertise from Japan will become our winning advantage in the US as the market develops.

Q: Will combining unerry and Blogwatcher data create significant competitive differentiation?

A: Yes, the combined data will create significant differentiation, and we are confident we will become a leading critical player in location data in Japan.

Q: Do you have specific cost reduction targets from the Blogwatcher acquisition?

A: We are still reviewing all potential synergies, and cannot share specific targets at this time, but we do expect cost synergies as part of the combination.

Q: Blogwatcher has a ~5% profit margin, will this pull down unerry's overall margin?

A: The impact on profit will only start from next fiscal year, after the acquisition closes. We will review the full impact and disclose it when we announce next fiscal year's earnings forecast.

Q: What is the latest registered count for Beacon Bank, and what is the outlook?

A: The latest registered count is 2.25 million, which was disclosed in our last earnings release. Growth remains on track, with increasing adoption in billboards and small retail stores, and we disclose specific updated numbers once per year.

Q: Why are there no additional announcements regarding the NTT Docomo data partnership?

A: We have already started work on the integrated platform data partnership, and the original announcement is already in implementation. We do incremental updates on a case-by-case basis given the third-party nature of the partnership, so there is no additional news to share at this time.

Q: When did the new organizational structure launch, and what impacts has it had?

A: The new sales-focused organizational structure launched in July 2025, at the start of the fiscal year, and it has now been operational for over six months. Previously, all teams handled all types of customers (new, key, partner-led), which worked when we were smaller. Now that we have more employees and more customers, we split into dedicated teams for new customers, key customers, partner sales, and DX consulting, which lets each team leverage their specialized expertise. The benefits are already visible: specialists are deepening customer relationships in their focus areas, expertise has improved, and cross-selling has started to work more smoothly.

Q: Will you deepen partnerships with Recruit and Dentsu Group after the acquisition?

A: We cannot share specific details due to NDAs, but we have had long-standing deep relationships and business with both groups, and we aim to further develop these partnerships going forward.

Q: Why does Analysis & Visualization have quarterly volatility if it is mostly subscription?

A: Our core entry product "Shopper Mieru" is a subscription with recurring monthly revenue, but we also have a large volume of one-off spot analysis projects, plus periodic analysis projects for recurring customers, and some large Smart City projects that are all recognized at the end of the fiscal year (March), which creates quarterly volatility.

Q: Why is Q2 operating profit growth slower than in prior years?

A: The pattern of profit recognition varies year to year. Two years ago, profit was heavily concentrated in H2, so Q2 profit was low; last year profit was more evenly balanced, so Q2 profit was higher; this year we are back to a pattern closer to two years ago, with profit concentrated in H2, so Q2 looks slower. We encourage investors to focus on full-year results rather than quarterly volatility, which is normal for our business and does not change full-year performance.

Q: Are there any interesting or unexpected use cases for inbound data right now?

A: A interesting current use case comes from the changing trend of Chinese inbound tourism: when the market is changing, customers need data to verify what is actually happening, such as which nationalities are increasing or decreasing at specific locations. There is no other source that can provide this granular real-world data, so demand for our data actually increases during periods of change, which is an interesting dynamic we are seeing currently.

Q: What initiatives do you have to drive a stock price reversal?

A: First, we need to achieve a high target ROE, which is our core priority for delivering returns to shareholders. We are already focused on ROE-focused management and capital allocation internally. Second, we need to increase trading liquidity to support stable stock price formation, which requires improving broader market recognition and improving our disclosure to encourage more active trading from existing and new investors.

Q: If you had unlimited resources and budget, what M&A would you pursue?

A: Our M&A strategy is focused on adding to our data ecosystem to leverage our data gravity effect. There are many other high-quality data holders that cannot reach their full potential alone, with low market valuation and stagnant growth. If we had unlimited resources, we would integrate all of these into the unerry data ecosystem to build the world's most comprehensive real-world World Model, which would be a truly unique global asset.

Q: What does the slogan "Electricity, Gas, Water, unerry" mean?

A: This slogan captures the essence of unerry's long-term vision: we aim to become a necessary infrastructure for the economy and society, just like utilities, by enabling real-world simulation via our World Model. We know it sounds understated, but it accurately reflects our long-term positioning, and we will continue to refine and communicate this vision to the market.

Q: Is there a risk that future regulation will make it impossible to collect location data?

A: Current proposed revisions to Japan's Personal Information Protection Act do not include additional regulations on location data. We have already fully adapted to Apple's enhanced privacy regulations from past years: while opt-in rates per individual app have declined, our business model partners with dozens of apps, so even with lower per-app opt-in rates, our total ID volume continues to grow, which mitigates this risk entirely.