BTM,Inc. Q2 FY2026 earnings call

• Core Mission & Business Model

  • BTM's mission is to revitalize all generations in Japan by addressing opportunity gaps between the Tokyo metropolitan area and regional Japan. The company actively leverages regional talent to support corporate digital transformation (DX).
  • The business model is stock-type, with revenue and profit typically increasing in the second half of the fiscal year.

• Growth Focus Areas

  • Aggressive hiring: Increased sales staff to 33 people and in-house engineers to 159 people as of Q2, expanding available project capacity. Invested in strengthening administrative functions to build out consolidated group governance for M&A and new business expansion. BTM was selected as one of the top 100 companies for recruitment out of ~40,000 entrants in the Wantedly Awards 2025.
  • Partnership expansion for cloud and AI strategy: Signed a sales partnership with Sakura Internet to add domestic Japanese 'Sakura no Cloud' to BTM's existing cloud portfolio (focused on AWS via parent, Microsoft Azure via subsidiary BTMAIZ), expanding service options for regional customers who prefer domestic cloud for security and trust. Accelerated AI agent development via a new joint project with Headwaters.
  • Preparatory investment for expansion: Completed full acquisition of Quest System Design as a wholly owned subsidiary, gaining a new regional hub in Yamagata (Tohoku region) to accelerate DX expansion in that area. Continued investment in subsidiary BTMAIZ to build out its management structure and AI-focused growth.
  • Full AI capability buildout: Launched a full-scale joint AI agent service project with Headwaters, led by BTMAIZ, which is currently conducting pilot tests and system development for corporate clients. The partnership is also focused on training AI talent and building integrated AI-Web system development capabilities.

• M&A Synergies from Quest System Design Acquisition

  • Strengthened engineer recruitment in the Tohoku region by combining Quest System Design's full-remote development infrastructure connecting Tokyo and Yamagata with BTM's recruitment capabilities, creating new opportunities for regional engineers.
  • Expanded customer base in Tohoku by combining Quest System Design's existing client network focused on Yamagata manufacturing with BTM's sales capabilities to accelerate DX adoption for regional firms.
  • Expanded career paths for engineers from both firms, who can now work on each other's client projects to support skill development and career growth.

The full-year consolidated financial performance is reported, with no separate breakdown of individual product segment financials provided in the available transcript. For the first half (H1) of FY2026 (ending September 2025):

• Total revenue: 2.829 billion yen, +13.8% year-over-year
• Operating profit (half-year): 52 million yen, -18.3% year-over-year, with the decline narrowing significantly from a 60.7% YoY drop in Q1
• Standalone Q2 revenue: +17.5% YoY and +10% quarter-over-quarter, hitting a new all-time quarterly high
• Standalone Q2 operating profit: +34.1% YoY
• Excluding growth investment costs, H1 operating profit grew 21.1% YoY
• Net profit: 31 million yen, -23.9% YoY
• Revenue and profit both hit over 45% progress against full-year guidance, in line with plan

• Full-year FY2026 (ending March 2026) guidance is maintained with no revisions from prior projections.
• The company projects full-year revenue will grow 22.4% year-over-year, following double-digit growth in the prior fiscal year.
• All key KPIs are progressing on track as of Q2, with 10,555 client accounts, 33 sales staff, and 159 in-house engineers, all meeting or exceeding planned milestones.
• Management confirmed that the company will re-invest all profit gains from revenue growth into further expansion activities, and expects to accelerate revenue and profit growth in the second half of the fiscal year in line with the company's typical seasonal trend.
• BTM expects current growth investments to deliver performance gains in the second half of the fiscal year, and remains on track to hit full-year targets.

No explicit discussion of material business risks or operational failures is included in the available transcript. The only risk noted is that the financial impact of the recent Quest System Design acquisition is still under review, though management expects positive net synergies over time.

Q: The year-over-year decline in operating profit has improved from Q1 to Q2. Does this mean growth investment activities are wrapping up? / A: Growth investment is progressing exactly as planned, and profit is also tracking in line with original plans. Management will continue balancing investment and profitability while pursuing growth investment for business expansion. The strategy is not to wrap up investment, but to continue investing gradually while balancing with profit growth. (132 words)

Q: Revenue appears slightly behind plan to date; do you still expect to hit full-year targets? / A: BTM's business model is stock-based and naturally sees higher revenue and profit in the second half of the fiscal year. The positive impact of current growth investments will also materialize starting in the second half. Management still expects full-year revenue to land exactly at the planned target. (78 words)

Q: Account count is on track to hit the full-year target by Q3, but why does this not directly translate to immediate revenue growth? / A: Account count is not a metric that directly drives immediate revenue growth. However, more business partner accounts increase the volume of information on projects and available talent. This acts like adding new tools for the business, which can be leveraged to generate future revenue and profit growth. While not immediate, more accounts make future revenue expansion easier. (101 words)

Q: What is the expected revenue impact of making Quest System Design a fully owned subsidiary? / A: The exact profit impact is still being reviewed, but the acquisition brings many high-skilled engineers. Management expects strong synergies for both BTM's IT engineering services and DX solution lines. The company will work to leverage these synergies to drive growth for both businesses and deliver a positive impact on consolidated earnings. (85 words)