OpenWork Inc. Q4 FY2025 earnings call

• Company Mission & Vision

  • OpenWork's core mission is to improve Japan's low global ranking in work engagement, which the company identifies as a key lever to increase individual labor productivity and overall national GDP amid a shrinking labor force. The company aims to bring greater information transparency to Japan's labor market, shifting the center of "work" from corporations to individuals who now must design their own careers in a more fluid labor market.
  • The core platform dynamic is a positive growth cycle: more users drive more resume registrations and reviews, which attracts more corporate clients, which further improves platform data and value for users.

• Core Service Overview

  • OpenWork (the review platform) is Japan's largest employee review site, structured as an "8-8-3" model: 8 evaluation scores (e.g., satisfaction with compensation, organizational openness, growth environment for 20-somethings), 8 500+ word qualitative review sections, and 3 verifiable factual metrics (monthly overtime, paid time off usage, salary data). Reviews are only accessible after completing one of four actions: registering a resume, submitting a review, registering for a partner service, or paying a 1,800 yen/month membership fee.
  • OpenWork Recruiting is a corporate direct recruiting service that lets firms send scouting messages and job postings to OpenWork users, with pricing consisting of an annual base fee starting at 1.2 million yen plus 700,000 yen success fee for mid-career hires and 300,000 yen for new graduate hires. Over two-thirds of 2026 graduating job seekers use the platform, making it viable for both new graduate and mid-career hiring. Unlike traditional models, it does not prioritize paid listings in search results, instead showing users the highest matching quality companies to protect user experience.
  • Alternative Data Service: The new growth segment leveraging OpenWork's unique review data for non-recruiting use cases, as noted above.
  • OpenWork Career: An early-stage, non-monetized experimental career community SNS focused on demystifying career paths for individuals, currently in pilot testing.

• 2025 Full Year Operational Highlights

  • Company-wide operating revenue and operating profit hit record highs for the 4th consecutive year since listing. Full-year operating revenue grew 31.4% YoY, exceeding the initial guidance of 27.0% YoY growth. Full-year operating profit reached 1.19 billion yen.
  • The company completed its first ever M&A in December 2025, acquiring all shares of PM Club, a company that operates PM Career (a product management job site) and PM School (an online school for product managers). The acquisition targets PM Club's skill intelligence capabilities, which can break down candidate experience into granular skill tags and proficiency levels to enable next-generation skill-based matching that OpenWork can combine with its existing review and cultural matching data.
  • The company achieved its multi-year goal for internal human capital metrics: as of February 2026, OpenWork's own internal score on the OpenWork platform reached 3.73, placing it in the top 2% of all companies, and it earned the top AAA engagement rating from Motivation Cloud, despite growing headcount. This improvement was credited to targeted team building, manager retreats, and transparent sharing of AI development roadmaps with all employees.

• 2030 Long-Term Growth Strategy: Working Data Platform (WDP)

  • The company set a minimum target of over 15 billion yen in operating revenue and over 3 billion yen in operating profit by 2030, enabled by organic growth of existing businesses and M&A, with upside potential from larger acquisitions.
  • The core long-term strategy is to build the WDP, which aggregates Japan's largest collection of unique working-related data: over 20 million user-submitted reviews, resume data, skill tags from the PM Club acquisition, and employee sentiment data. This data is processed into a vector database for AI utilization. The WDP aims to provide value to both sides of the market: for job seekers, it will deliver personalized career recommendations based on user data, and for corporates, it will provide tailored hiring and organizational improvement insights that leverage OpenWork's unique natural language review data. A virtuous cycle of data growth, improved product value, and revenue growth will reinvest in AI development to solidify OpenWork's position as Japan's leading aggregator of working data.
  • Priorities for job seeker value: (1) Improve recommendation accuracy via data expansion and AI to increase incentives for resume registration; (2) Deliver AI-powered career advice beyond just job matching, including guidance on staying at a current company; (3) Strengthen human agent partnerships via M&A to capture nuanced user needs that AI may miss.
  • Priorities for corporate value: Expand beyond just recruiting support to offer end-to-end services including employer branding, AI-aided matching to reduce hiring work, and post-hire organizational improvement support to reduce turnover, creating a one-stop service for corporate HR needs.
  • M&A Strategy: OpenWork holds over 7 billion yen in cash and will prioritize M&A targets in human resources/matching that can complement its data assets, AI development, and data science capabilities to sharpen its unique competitive advantage.

1. OpenWork: This segment primarily earns revenue from referral fees for partner service sign-ups and paid individual membership fees. After years of stable/flat performance, it grew 15% YoY in FY2025 due to successful price increases for referral client services amid industry-wide advertising cost inflation. This growth is viewed as temporary, with flat/slight decline expected from FY2026 onward. Core KPIs grew steadily, with total user count reaching 7.75 million and registered Web resume count reaching 1.65 million, with continued growth in total review submissions that improved platform value.
2. OpenWork Recruiting: This is the company's core growth segment. Full-year FY2025 revenue hit 3.24 billion yen, an all-time high, with Q4 FY2025 growing 41.2% YoY. Key KPIs grew despite the introduction of initial fees starting Q1 FY2025 (which was expected to slow contract growth), with contract client count reaching 4,400 companies and active job postings reaching 99,000. It accounts for approximately 69% of total company revenue.
3. Alternative Data Service: This new business segment currently contributes 2% to 3% of total revenue and is growing steadily. It includes two offerings: FIS (anonymized review data sold to financial institutions/quant/hedge funds, which has been academically proven to correlate with corporate performance and stock prices) and DAP (AI-analyzed review-based organizational health reports for enterprises focused on human capital management, which is particularly popular with large listed companies).

• For FY2026 (December 2026), the company guides 5.7 billion yen in total operating revenue, representing 22.5% YoY growth. This slower growth rate than FY2025 reflects the temporary one-time growth of the OpenWork segment in FY2025, which is expected to return to flat performance in FY2026.
• OpenWork Recruiting is expected to continue growing at over 30% YoY in FY2026, and Alternative Data Service is expected to continue its steady small-scale growth.
• Operating profit guidance for FY2026 is 1.45 billion yen, representing further growth from FY2025.
• Total operating expenses are expected to increase in FY2026: (1) Personnel costs will grow due to increased hiring for product development to support AI development and growing client count; (2) Advertising expenses will grow 11% YoY, slower than FY2025 growth, to continue promotion in the Kanto and Kansai regions; (3) Other expenses will grow due to new "review + AI" feature development, joint development with external partners, and increased security investment.
• The 2030 long-term target of 15 billion yen+ operating revenue and 3 billion yen+ operating profit is a minimum achievable target based on current organic growth and identified M&A opportunities, with upside from larger M&A transactions.

• Generative AI has caused a slowdown or decline in organic search-driven page views, as users increasingly get information from AI tools instead of traditional search. The company is adjusting its product and UX design to reduce reliance on organic search and drive direct repeat visits, and has seen growth in unique users and visits from non-search channels so far.
• The human resources industry is inherently cyclical, and a broader market downturn would negatively impact operating results. However, OpenWork has built in resilience via business diversification: 20-30% of revenue comes from referral/ membership revenue, and the high-margin alternative data business continues to grow, so a severe downturn would not cause the large declines seen in previous industry cycles, and the platform's exposure across multiple industries further reduces concentration risk.
• M&A transactions carry integration risk, and it takes time for synergies to materialize, which can near-term pressure profitability from goodwill amortization and integration costs. The company explicitly accounted for this dynamic in its 2030 profitability target.
• Scraping and unauthorized generative AI training of OpenWork data is a risk. While the company prohibits full dataset scraping and training in its terms of service, publicly visible non-paywalled data is already being used by AI tools, though the company has designed this to drive traffic back to OpenWork, turning it into a net positive for user acquisition.
• Failure to maintain review quality and trust could damage the platform's reputation. The company mitigates this via combined AI and manual review of submissions, regular policy updates guided by external legal counsel, and third-party academic validation of review quality, but can never fully eliminate all low-quality or fraudulent reviews.

Q: The 2030 target of 15 billion yen+ revenue and 3 billion yen+ operating profit appears to build in an operating margin decline. Why is this the case given the expected fixed cost leverage from OpenWork Recruiting growth, and what is the positioning of this target?

A: This target is the minimum we expect to achieve, and we are working toward higher goals. We built in the margin decline because we expect increased M&A activity going forward, and it takes time for synergies to materialize after acquisitions, plus we have to account for goodwill amortization expenses. We do not want to overcommit to higher margins and miss out on attractive M&A opportunities that can drive long-term growth. While we have built in ~20% margin decline for the plan, we expect margins will improve over the longer term once M&A synergies are realized, and we see significant upside to the target if acquisitions perform better than expected. The human resources industry is experiencing a once-in-decades transformation, and combining OpenWork's data with experienced recruiting players can reshape the multi-trillion yen market.

Q: Is there opportunity for collaboration with other companies, or do you prefer M&A?

A: Our priority is to leverage our data to build new business in recruiting, so we prefer capital alliances or M&A over loose collaboration, as these structures better align incentives to deliver long-term value.

Q: What drove the 41.2% YoY Q4 FY2025 growth for OpenWork Recruiting? Is this growth sustainable?

A: This growth came from a combination of factors: a lower base in Q4 FY2024, and stronger than expected closed hires from several large clients. We do not expect 40%+ growth to continue, and we guide for just over 30% YoY growth in FY2026, which we view as sustainable.

Q: What is the impact of the PM Club acquisition on OpenWork Recruiting ARPU?

A: The acquisition will not primarily increase ARPU, but will improve matching efficiency, which will increase the number of successful hires per client, leading to higher revenue per client.

Q: When will the PM Club acquisition start contributing to earnings?

A: PM Club's results will be consolidated starting April 1, 2026, but the company does not generate meaningful revenue currently. We acquired it for its skill intelligence capabilities, not its current earnings, so it will not have a material impact on FY2026 results. In the medium term, the skill-based matching capability it enables will create significant sustainable competitive advantage that is hard for competitors to replicate.

Q: Do you prioritize organic or inorganic growth?

A: We will definitely continue to pursue strong organic growth, that is our baseline. At the same time, we have ample cash, a large user base, and significant data assets, so we will also pursue M&A to drive non-linear growth and create synergies, so we will pursue both to accelerate growth of the Working Data Platform strategy.

Q: Is the 2030 15 billion yen revenue target achievable with current growth trends?

A: Current organic growth rates are not enough to hit the target on their own, but we already have growing recurring revenue, increasing LTV per client, and we have built AI matching improvements and skill-based hiring into the plan. We have also seen strong traction from our Kansai regional expansion. When you add in the non-linear growth from M&A, the target is fully achievable.

Q: Why did job postings decline in Q4 FY2025 after increasing in Q3? What is your strategy for job posting growth?

A: We have always said that job posting count will not grow continuously and will sometimes decline, and that is intentional. While overall Japanese labor market has over 10 million job postings including many stale openings, we focus on maintaining high matching efficiency by only keeping fresh, relevant postings that match our core mid-to-high career user base. We intentionally remove stale or irrelevant postings to avoid user traffic congestion (poor user experience from too many low-quality openings), so quarterly fluctuations are normal and should not be a concern. We believe around 100,000 high-quality postings is the right size for our current user base.

Q: What has been the impact of generative AI on OpenWork page views?

A: Generative AI has impacted organic search page views, which have stagnated or declined slightly from previous growth trends, which we attribute to AI. However, total unique users and visits are still growing, as more users come directly to the site or app instead of via organic search, and we are adjusting our product design to reduce reliance on search. We expect some further potential decline, but we are on track to offset this, so there is no material concern.

Q: What is your strategy for page view growth?

A: We do not prioritize growing page views for their own sake. Our users primarily come to OpenWork to address deep career needs, so we prioritize growing the number of users with active deep career needs rather than just increasing page views, which is a more meaningful metric for long-term growth.

Q: Why do you hold 3 billion yen in time deposits, instead of paying this out as a dividend?

A: The time deposits are held to build stronger banking relationships in preparation for future M&A activity that may require debt financing. They are still highly liquid and available for use when needed, so there is no impact on operations. We currently prioritize using cash for growth investment including M&A, and we will consider dividend payouts after assessing the progress of these investments.

Q: Will you use large-scale borrowing to fund M&A in the future?

A: It depends on the opportunity. We are open to both using existing cash and borrowing for large enough attractive opportunities, so we keep both options open.

Q: What are your posting standards for job listings?

A: We strictly screen all job listings and remove any postings that are socially inappropriate, and we also screen users to exclude anti-social forces.

Q: How do you enforce compliance for inappropriate jobs or reviews?

A: We use multiple methods to police violations, including AI machine learning screening and manual visual checks. We work with outside counsel annually to update our policies and manuals to ensure quality control, and we strictly respond to any confirmed violations reported by users or clients to maintain a safe, healthy platform.

Q: Who owns the copyright to user-submitted reviews?

A: OpenWork and the submitting user equally share the copyright to all submitted reviews.

Q: What is your policy against scraping and unauthorized AI training of your review data?

A: We prohibit unauthorized full dataset scraping and training for generative AI under our terms of service, which is a copyright violation. For information that is publicly visible behind the paywall, we allow this and actually design it to drive traffic back to OpenWork, which is a net positive for user acquisition.

Q: What is your expected long-term advertising to revenue ratio?

A: We expect it to stay around 20% for the foreseeable future, but it may fluctuate based on priorities. If we believe product development investment delivers higher returns than advertising, we may reduce it, and if we see clear upside to expanding advertising to increase recognition, we may increase it. We will maintain disciplined control to preserve our target operating margin regardless of fluctuations.

Q: How do you expect personnel costs to change going forward?

A: Personnel costs will continue to increase, but we are improving productivity via AI automation of workflows in sales and marketing, so growth will be partially offset. We will need to add more headcount for customer success and client support, so some continued net increase is expected.

Q: How resilient is the business if market conditions deteriorate?

A: We do have some resilience, but we are a human resources company so we would definitely feel some impact from a downturn. However, the industry is already polarized amid ongoing labor shortages, and OpenWork is diversified across many industries, with 20-30% of revenue coming from stable referral/membership revenue and the high-margin alternative data business, so we would not see the sharp declines seen in past downturns.

Q: What results have you seen from advertising to improve brand recognition?

A: We ran experimental advertising in the Kansai region in FY2025 and achieved strong results, increasing recognition beyond the Kanto region to levels that now exceed Kanto in some metrics. We have found a clear winning pattern for advertising, but we still need to test if mass advertising works in the Kanto region and how to convert recognition into more resume registrations, so we are still evaluating.

Q: Will you expand advertising outside of Kanto and Kansai?

A: There are no current plans to expand to other regions like Nagoya or Fukuoka. We may consider expansion once client density reaches a high enough level in those regions to justify the advertising investment.

Q: What is your top priority strategic focus?

A: The top priority is to better communicate OpenWork's full potential to investors, improve liquidity, and effectively deploy our large cash balance to drive growth. We believe there is significant opportunity to transform the multi-hundred-billion yen human resources recruiting market by combining our unique data with existing recruiting expertise via M&A, and we need to move quickly to capture this opportunity.

Q: What is the market size and future revenue contribution of alternative data services?

A: The global alternative data market is large, but the Japanese HR alternative data market is relatively small, so we do not expect the revenue contribution to increase much from the current 2-3% level, and it may even decline as a percentage of total revenue if recruiting and M&A-driven growth outpaces it. That said, it is a very high-margin business that has been validated by leading global hedge funds and large Japanese corporations, so it creates significant strategic value beyond its current revenue contribution, and we will continue to grow it steadily.

Q: What is the expected long-term growth rate for OpenWork Recruiting, and how large can it get?

A: We expect growth to continue for the foreseeable future. The total direct recruiting and human resources recruiting market is 500-600 billion yen, and OpenWork currently holds less than 1% market share, so there is enormous room for growth. Most of the 2030 15 billion yen revenue target comes from OpenWork Recruiting, so you can back into the expected compound growth rate from current levels. For comparison, major competitors have much higher revenue than us but we have roughly twice as many users, so the upside is very large.

Q: What are the churn rates for individual paid members and corporate clients, and how do you address churn?

A: For paid individual members, churn is relatively high because most users cancel after they finish their job search, which is expected and built into our business model. We do not see this as a problem, because even after cancellation, many users leave their resume registered or continue to contribute reviews, which improves our platform data. For corporate clients, churn is expected to some degree because hiring needs fluctuate over time, and we offer flexible plans that let companies keep a presence even when they are not actively hiring at full speed, so we can retain clients and grow spend when they ramp up hiring again. We focus on building a flexible customer base that accommodates changing corporate needs, which is the best way to reduce long-term churn.

Q: Are you planning to launch chat-based AI matching like ChatGPT?

A: We are currently developing this product, so please stay tuned.

Q: Do you have any takeover defense (TOB) plans?

A: We have many stable large shareholders, which is our primary defense. The best defense is continuing to increase our share price, so we will work hard to deliver growth to achieve that.

Q: Can OpenWork gain meaningful market share from large established players like Mynavi, Recruit, and doda?

A: We believe we can gain share. The large established job board media businesses are facing more pressure now, and the market is shifting toward direct recruiting, aggregation, and human recruiting, where OpenWork Recruiting has significant room to grow. We have a much larger user base than many competitors, and we will look for M&A opportunities to leverage our data and expand share further.

Q: Which growth lever is most important: increasing total users, increasing resume registrations, or increasing conversion of existing users to job seekers? Which do you prioritize?

A: We prioritize both increasing resume registrations and increasing conversion of existing users to active job seekers. If we had to choose one, we would prioritize increasing conversion of existing users, because most existing users already come to OpenWork to check reviews, so converting that traffic into active job search on our platform is the most impactful lever for growth, and this is already our fastest growing key metric.

Q: How do you differentiate from AI agents, and what is your competitive advantage amid AI development?

A: We believe the industry will polarize: companies that can deliver unique proprietary value will thrive, while companies that cannot offer anything that generic generative AI cannot provide will struggle. Our key competitive advantage is our unique proprietary natural language review data that we do not allow generative AI to train on, so this information is only available via OpenWork. We are currently building AI products that deliver unique insights (e.g., personalized career opportunity estimates, matching probabilities, salary projections) that generic AI cannot provide because it does not have access to our data. This creates a virtuous cycle: more users come to us for our unique data, which generates more data, which improves our AI products, so we will remain competitive. Companies without unique proprietary data will struggle to compete in the AI era.

Q: What is your relationship with Link and Motivation?

A: We do not have any regular operational input from them, but they have deep expertise in HR and organizational areas, and they often introduce us to academic partners and provide advice on joint research, which is very helpful.

Q: What is the risk and opportunity from API integration with large AI super apps?

A: API demand for our data is already increasing, and we have started partnerships with non-competing players, which delivers high margin revenue and increases OpenWork brand recognition, so this is a positive opportunity for us. We think it is unlikely that a single super app will dominate every category of daily life, because combining unrelated needs on one platform creates poor user experience (for example, adding job postings to a shopping app creates irrelevant notifications that users hate). If a comprehensive finance/career AI super app does emerge that aggregates all career and financial planning, we would consider partnering with it, but we do not see this happening imminently, and it would not have a major negative impact on our current business. We will continue to monitor this trend.

Q: Will you be issuing more share-based compensation to increase your (CEO Osawa's) shareholding?

A: I already receive stock options and restricted stock, which is publicly disclosed. I have purchased shares on the open market with my own capital where possible, and I am fully committed to OpenWork's long-term growth. We also continue to refine our compensation structure to ensure all management and executives are fully committed to the business.

Q: What benefits have you seen from being added to the JPX Startup 100 Rapid Growth Index?

A: It is an honor to be selected, and it has increased attention to the company, which we appreciate. We do not expect any immediate material impact, but we hope to see benefits down the line, and we will continue to deliver results to merit the selection.

Q: What motivates users to submit reviews, beyond gaining access to read other reviews?

A: Currently, the vast majority of submissions are motivated by unlocking access to read reviews. There are small numbers of additional motivations: some users want to give back because OpenWork helped them, and some users want to warn others about negative experiences at their former company, which represents a meaningful volume of submissions. In the future, we plan to change the incentives so that contributing data (reviews) improves the personalized recommendations users receive, which will align incentives better.

Q: How do you ensure review credibility?

A: We focus heavily on review credibility and take two main approaches: first, we do quality management, where AI and trained staff manually screen out reviews suspected of stealth marketing or low-quality/non-credible content. Second, we partner with third-party academic institutions to conduct research, and we have published peer-reviewed papers confirming that OpenWork reviews correlate with actual corporate performance and stock prices, which provides independent third-party validation of review quality.