ABIST Co.,Ltd. Q4 FY2025 earnings call

Overall Financial Performance

• Total FY2025 (ending September 2025) revenue hit 10.627 billion yen, up 6.2% year-over-year. Operating income reached 963 million yen, up 6.7% year-over-year. Ordinary income was 977 million yen, up 7.9% year-over-year, and net income was 649 million yen, up 6.3% year-over-year. This marks a full year of increased revenue and profit.
• Revenue missed the prior plan by 73 million yen due to underperformance in experienced hire hiring, even as new graduate hiring exceeded plan. Operating income beat the prior plan by 163 million yen due to successful unit price improvement in contracting services, offsetting higher personnel costs from consistent wage hikes.

Profitability Improvement Initiatives

• Regularly reviews unit pricing to account for domestic inflation and wage growth. Focuses on increasing high-difficulty project orders to match higher-skilled engineers with appropriate pricing, and expands training to increase the pool of engineers qualified for high-unit-price projects.
• Monetizes AR/AI technology and design solutions through external sales, and improves contracting business efficiency via internal design efficiency tools. Restructured R&D meetings into cross-departmental sessions to speed up development and optimize resource allocation.
• Company-wide per-person monthly revenue has grown steadily since the mid-term plan launch, increasing 46 thousand yen year-over-year in FY2025 driven by unit price improvement. Excluding new graduate and potential hire engineers, utilization of technical staff stays at ~95%, maintaining a high utilization rate.

Talent Acquisition and Development

• Strengthened recruiting via consulting support, hitting the 2025 new graduate hiring target, and implemented an average 5% wage hike starting April 2025 to improve compensation.
• Expanded and specialized training curricula for new graduates, enabling more practical training for entry-level engineers and supporting earlier placement and higher utilization for some new hires.

Leadership Development (Starting FY2026 ending September 2026)

• Identified leadership development as a new priority starting FY2026, to expand on-site reception capacity for newly trained junior engineers. Plans to increase investment in leadership training, expand the leadership/manager pool, and improve leadership compensation to support long-term growth.

Digital Solution Development

• Developed multiple AR/AI and design efficiency solutions: an automatic design check tool co-developed with an automotive parts manufacturer, the AR-based DiffAR shape comparison program (patent applied for, now pitching to existing customers), internal design efficiency tools (automatic cross-section creation, interference checking) that already improve internal quality and reduce costs, plus additional solutions like AI-powered 3D human body modeling and automatic permit transcription.

1. 派遣業務 (Dispatching Services): Full-year FY2025 revenue increased 2.7% year-over-year. Per-person monthly revenue reached 683 thousand yen, an increase of 46 thousand yen year-over-year. 2. 請負業務 (Contracting Services): Full-year FY2025 revenue increased 9.5% year-over-year. Per-person monthly revenue reached 854 thousand yen, an increase of 38 thousand yen year-over-year. This segment contributes 59% of total company revenue, maintaining a high share of overall revenue. 3. New business areas: New segment revenue has remained below plan since FY19, but continues to grow year-over-year.

• For the 2026 September fiscal year: The company prioritizes upfront human capital investment, starting salary improvements and leadership development in the October 2025 first half, ahead of the April 2026 contract unit price revision. It expects increased revenue but decreased profit for FY2026, and has downward revised all prior FY2026 financial targets: revenue will come in below the original plan due to current headcount being below plan, and operating/ordinary/net income will be below the original plan to account for higher SG&A from ongoing wage hikes, recruiting strengthening, and headcount increases for internal control buildout.
• For the 2027 September fiscal year, the final year of the mid-term management plan, the company maintains its original target of 12.5 billion yen in revenue and 1.3 billion yen in ordinary income. It expects profitability improvement from unit price revisions in April 2026 and April 2027, and aims to hit the target through the current set of strategic initiatives.

• Industry and external risks: The automotive industry, the company's core end market, is starting to see impacts from U.S. tariff policy. The overall talent market has rising labor mobility, heated competition for talent, and rising wage levels, which increases pressure on personnel costs and talent retention.
• Profitability risks: Outdated misaligned unit pricing that does not reflect current technical skill levels, combined with rising personnel costs from ongoing wage hikes, drags on profitability. While unit price improvement is progressing, continued negotiation is required to further lift margins.
• Growth risks: Stagnation in technical headcount growth from difficulty hitting experienced hiring targets limits revenue growth. After expanding basic training for new hires, insufficient leadership capacity to support on-site placement of junior engineers limits growth scaling.
• New business risk: Revenue from the company's new strategic business areas has missed mid-term plan targets consistently since FY19.

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