COPRO-HOLDINGS.Co.,Ltd. Q1 FY2026 earnings call

Overall Financial Performance

• Consolidated revenue hit 8.297 billion yen, up 20.8% year-over-year, with 47.6% progress against the first half forecast; all profit metrics hit record highs for a first quarter. • Operating profit reached 619 million yen, up 48.0% year-over-year (40.2% progress against first half forecast) with operating margin up 1.4pp year-over-year to 7.5%, driven by a 0.7pp improvement in gross profit margin and a 0.7pp improvement in selling, general and administrative (SG&A) expense ratio. • Non-GAAP operating profit was 778 million yen, up 50.5% year-over-year; ordinary profit was 614 million yen, up 42.0% year-over-year; net income was 379 million yen, up 42.9% year-over-year. • Total group technical staff counted 5,184, up 19.2% year-over-year.

Strategic Goal: Overwhelming Industry No.1 in Construction Technical Staffing

• Management targets the No.1 position in both scale and quality for the core construction staffing business to become the industry standard, enable stronger billing rate negotiations, and provide better career development for technical staff to support healthy growth of the construction industry. • Copro has already outpaced peer competitors in growth rate of technical staff count, and identifies technical headcount and retention rate as the core drivers of sustainable growth.

Sales Strategy

• Primary client targets are 5 major super general contractors and mid-tier large construction firms; first quarter target client placement ratio dipped slightly to 89.1% due to temporary placement delays from hiring backlogs, but management plans to shift non-target placements to target clients at contract renewal to improve the ratio. • Management is prioritizing team/set bulk placements to large construction sites: placing junior new hires alongside existing senior/mid-level technical staff at the same site to provide on-site support and reduce junior employee isolation, which improves retention. Total teams have grown to 806, making up 52.7% of total placements, up 21.7pp from before the 2021 sales reform. • The Copro Construction sales headquarters was relocated from Nagoya to Tokyo in April 2025 to strengthen expansion and hiring in the large Kanto region market.

1. Copro Construction (core construction technical staffing segment): Revenue increased 20.7% year-over-year; operating profit increased 30.1% year-over-year, accounting for the majority of consolidated revenue. For this segment, sales unit price decreased 1.1% year-over-year, overall utilization including trainees reached 92.0% (up 0.5pp year-over-year), and overall retention rate held at a high 90.4%.
2. Copro Technology (IT, semiconductor, and electrical/mechanical technical staffing segment): Revenue increased 21.6% year-over-year, and posted a net loss of 3 million yen. For its mechanical/semiconductor sub-segment, sales unit price decreased 4.7% year-over-year during the business model shift to training and placing entry-level candidates. For its IT technical staffing sub-segment, sales unit price increased 8.5% year-over-year.

• Management maintains the original full-year FY2026 March Term earnings guidance with no revisions, and confirms that full-year targets remain within reach despite minor first quarter hiring KPI delays. • Full-year guidance targets: 6,271 total group technical staff (up 29.0% year-over-year), consolidated revenue of 38 billion yen (up 26.6% year-over-year), operating profit of 3.8 billion yen (up 37.5% year-over-year, 10.0% margin), Non-GAAP operating profit of 4.425 billion yen (up 32.9% year-over-year, 11.6% margin), ordinary profit of 3.8 billion yen (up 36.5% year-over-year), and net income of 2.47 billion yen (up 35.7% year-over-year), all of which would be record highs. • The full-year hiring target remains 3,000 new hires, with a continued focus on low-cost hiring of inexperienced candidates. • Based on the company's dividend policy (target 50%+ consolidated payout ratio, no dividend cuts during the 2027 mid-term plan, 7 consecutive years of dividend increases going into FY2026), the full-year dividend forecast is 80 yen per share pre-split (40 yen post-split, 1-for-2 split effective October 2025), with a projected payout ratio of 61.7%.

• First quarter total hiring volume was slightly lower than planned, driven by underperformance in regional markets outside the Kanto region due to tight hiring competition and low candidate turnout, which has created a minor delay in KPI progress. • Retention rate for employees with 3+ years of tenure has declined, driven by retirements due to an aging workforce; management has not yet implemented targeted improvement measures for this segment. • The mechanical/semiconductor staffing segment is in the middle of a business model shift, which has caused a near-term 4.7% drop in average sales unit price that will only be offset once the volume of trained entry-level candidates increases in future periods.

There is no question and answer section included in the provided transcript.