Brangista Inc. Q2 FY2025 earnings call

Overall Company Performance

• The company achieved record-high first half and quarterly consolidated revenue, operating profit, and ordinary profit for FY2025/9, with performance progressing in line with management's full-year plan.
• Core business アクセルジャパン, launched 2.5 years prior, has grown to become the company's main growth driver.

Promotion Support Business (アクセルジャパン) Key Updates

• New client acquisition efficiency from web advertising improved, driving higher new revenue. Proactive customer success support for existing clients increased renewal rates and recurring revenue.
• Three new growth channels are being prioritized:
  • Strengthened partnerships with financial institutions, leveraging NEXYZ.Group's national network. Financial institutions introduce アクセルジャパン to local clients, with streamlined decision-making as introductions are directly to decision-makers, already producing new closed contracts within months of launch.
  • Doubled the number of trade show appearances compared to the prior year to reach potential new clients actively seeking promotion solutions.
  • Accelerated proposals to municipal governments, leveraging the company's existing national municipal network to help differentiate competing furusato tax donation programs. The case of Eniwa City, Hokkaido delivered 13x higher monthly access to return items and 3x higher repeat rates, leading to contract renewal, demonstrating the service's effectiveness.
• Expanded use cases include everything from recruitment to out-of-home advertising, leading to higher upsell and additional contract volume.

Media Business (旅色) Key Updates

• The company offers custom multi-language digital/print travel magazines for municipal governments, priced above 10 million yen per project. A pipeline of proposals from prior periods is now converting to contracts, and a new lower-priced service offering is being rolled out to win smaller-budget projects and drive future upsell to full custom packages.

Solution Business Key Updates

• The company continues to expand EC support services, leveraging its existing expertise to support clients navigating new platforms and social commerce opportunities, to grow revenue per client and acquire new clients.

1. Promotion Support Business (led by core product アクセルジャパン): Grew 28.5% year-over-year in revenue and 43.6% year-over-year in operating profit, becoming the company's largest revenue and profit-generating segment. In Q2 FY2025/9, the segment achieved record-high quarterly revenue, with a 78.8% quarter-over-quarter profit increase and a record segment profit margin of 47.7%. Both new and recurring contract revenue grew consistently, with second contract renewal rates exceeding first renewal rates as clients see proven service results. This segment is the primary driver of the company's overall record first half performance.
2. Media Business (anchored by product 旅色): Revenue declined in the first half due to lower municipal government partnership advertising revenue. Hospitality and food service advertising revenue remained stable. The segment is expected to recover in the second half as delayed municipal contracts finalize and new lower-price services are launched.
3. Solution Business: Grew revenue in the first half, driven by expanding demand for 3D hologram production services. EC support related services maintained steady performance.

• Management maintains full-year FY2025/9 guidance for a third consecutive year of record full-year performance, with first half results on track to meet initial projections.
• The Media Business is projected to recover revenue in the second half of FY2025/9 following first half declines.
• The mid-term management plan (to FY2027/9) is unchanged, calling for 5 consecutive years of record performance, over 20% annual profit growth, and improving profit margins, with the goal of increasing corporate value.
• A temporary increase in selling, general and administrative expenses is expected in Q3 FY2025/9, due to annual new graduate hiring, in line with historical company patterns.

• Municipal government Media Business contracts face extended timing uncertainty due to the requirement for municipal budget approval, which can delay revenue recognition.
• Furusato tax donation PR market competition between municipalities is intensifying, which could create pricing pressure for アクセルジャパン's municipal offerings.

No question and answer section was included in the provided transcript.