7060.T

• Overall Financial Performance

  • 2Q standalone revenue is 6.518 billion yen (2.5% YoY growth), 2Q standalone operating profit is 250 million yen, operating margin improved from 1.8% YoY to 3.9%. 2Q cumulative consolidated revenue is 12.89 billion yen, cumulative operating profit is 430 million yen (126.2% YoY growth). All profit metrics (EBITDA, operating profit, net profit) more than doubled YoY, driven by strong cost control.
  • Previous non-core businesses (gaming, x-Tech) have been streamlined, allowing the firm to focus on IT talent segments and steadily improve profit structure. Operating cash flow increased significantly due to strong performance and lower corporate tax payments.

• Strategic AI Transformation

  • Developed the "GEECHS AI Statement" with the core concept "Work with AI, Connect with AI" to align internal culture around AI co-creation, and will integrate AI utilization metrics into employee performance evaluations to drive organizational cultural change.
  • Building the integrated AI agent "GEECHS AI" leveraging the firm's long-term accumulated matching data between IT freelancers and client companies. The tool will improve matching accuracy, standardize employee training based on high-performer data, and automate repetitive workflows (resume writing, process advising) to free consultants to focus on high-value client communication.
  • Medium-term goal is to transform from a labor-intensive human resources business to a knowledge-intensive business model, achieving revenue growth while containing cost increases to drive margin and profit improvement.

• Domestic IT Talent Segment Operational Highlights

  • Cumulative working person-months exceeded 10,000, on track to exceed 20,000 for the full fiscal year. Cumulative order value increased 0.8% YoY, and project to talent ratio remains at a strong 7.53x, indicating sustained strong demand.
  • New IT freelancer registrations exceeded 400 people in both 1Q and 2Q, growing steadily with stable advertising investment. Unit economics hit a record high 5.9 points, driven by long-term benefits from past branding investments and extended average working tenure that lifted freelancer lifetime value (LTV). Advertising spend ratio is 1.2% of revenue, maintained at a sustainable level.
  • GEECHS DIRECT service performed strongly, supporting margin improvement, and take-rate in the IT freelancer segment remains stable.

• Full-year consolidated sales guidance is maintained at the original planned level, while full-year operating profit guidance is raised upward to 0.8 billion yen, an increase of 100 million yen from the original plan.
• Overseas IT Talent segment full-year profit guidance is revised upward from an original planned loss of 30 million yen to a profit of 30 million yen (a 60 million yen positive swing), driven by improved cost structure and strong performance in the first half.
• Seed Tech segment full-year profit guidance is revised upward from 10 million yen to 20 million yen. This guidance accounts for planned upfront investment in the new DX職 -デジショク- service in the second half, and management targets to exceed this revised profit figure.
• Management confirms that after the strong first half performance, it is on track to achieve its medium-term target of 1 billion yen+ in annual operating profit in coming fiscal years, with solid momentum.

1. Domestic IT Talent: 2Q cumulative revenue is 8.248 billion yen (10.9% YoY growth), 2Q standalone revenue is 4.121 billion yen (10.2% YoY growth), and 2Q cumulative segment profit is 0.67 billion yen (13.3% YoY growth). This segment contributes 64% of total 2Q cumulative consolidated revenue. 2. Overseas IT Talent: 2Q cumulative revenue decreased slightly YoY, 2Q cumulative segment profit is 21 million yen, with 2Q standalone profit hitting 25 million yen (absorbing 1Q deficit). Revenue contribution is ~16% of total 2Q cumulative consolidated revenue. 3. Seed Tech: 2Q cumulative revenue is 243 million yen (160% YoY growth), 2Q standalone revenue is 148 million yen, 2Q cumulative segment profit is 37 million yen, and 2Q standalone segment profit is 45 million yen (record high for a single quarter). This segment contributes ~1.9% of total 2Q cumulative consolidated revenue.

No material operational risks, external risks, or operational failures were explicitly discussed in the provided transcript. The only uncertainty noted is that large MSP service contracts in the Australian overseas IT talent segment have long lead times (1 to 1.5 years) and relatively unpredictable revenue timing.

Q: What is the purpose of increased investment in the DX職 -デジショク- business in Seed Tech, and what results do you expect? / A: Many Japanese small and medium enterprises (SMEs) lack in-house IT literacy and do not know how to adopt DX or AI tools, even though many vendors offer relevant services. DX職 -デジショク- addresses this gap by having GEECHS hire and train dedicated talent to act as an extension of the SME management team, supporting tool selection, DX prioritization, and implementation. The service starts at 200,000 yen per month, and also offers training for in-house SME talent for long-term capability building. There is a lead time for hiring and training talent before revenue is generated, which requires upfront investment, but management expects the business to reach profitability as early as next fiscal year, without extended sustained losses.

Q: What is your outlook for the Australian overseas IT talent business next fiscal year? / A: Over the past two years, GEECHS has restructured management, replaced consultants, adjusted office locations, and implemented strict cost controls, which has put the business on stable footing. Full year profitability for the current fiscal year is already guaranteed, and the operating体制 is ready for growth next year. While MSP contracts have long lead times of 1-1.5 years, there is a solid pipeline of potential large deals, and management expects the business to return to growth from the bottom of last fiscal year, with better performance than the current fiscal year.