7089.T

Overall 9-month Cumulative Financial Performance

• Total cumulative revenue for the first 9 months of the fiscal year reached 3.593 billion yen, up 34.3% year-over-year
• Total cumulative operating profit reached 624 million yen, up 209.2% year-over-year
• Total cumulative order value reached 4.081 billion yen, up 35.5% year-over-year
• Both the 3-month third quarter and 9-month cumulative period achieved all-time high results with strong double-digit growth in both revenue and profit, driven by productivity improvements in the core Human Capital Business.

Corporate Governance & Structural Changes

• The company transitioned to a co-representative director system starting January 2026
• Yuhiko Tsuneta, a long-time leader who supported the company's growth, was appointed as Representative Director COO
• CEO Yuichiro Shimizu will focus on overall corporate management and the development of new businesses including M&A brokerage, with the two leaders jointly driving future growth.

Capital Return & Capital Allocation

• Management believes the current share price significantly undervalues the company's business growth potential and is extremely cheap
• The company announced a concentrated short-term share repurchase program: maximum 200 thousand shares, maximum total amount of 200 million yen, executed between February 6, 2026 and March 31, 2026
• The program aims to improve capital efficiency and expand shareholder returns
• The long-term capital allocation policy remains unchanged: capital generated from increasing operating cash flow will be prioritized for growth investment per the company's strategy, with share repurchases used as an additional tool for returning capital to shareholders.

Mid-Term Management Strategy Progress (Growth Industry Support Platform)

The company is working toward three core strategic pillars, with the following progress:

1. Build the No.1 Startup HR Business in both scale and quality
   • Productivity improvement has reached a clear inflection point
   • Transaction volume has expanded beyond pre-IPO companies to also include growing post-IPO companies
   • The company established a new subsidiary Arikata, and airs the in-taxi program Startups Prime to support branding for the company and featured startups
2. Expand startup support service offerings
   • The company runs M&A advisory business both independently and in partnership with Strike Co., Ltd.
   • The company is actively building deal flow: it has increasing opportunities to work with VCs and CVCs to review investment portfolios and source potential M&A deals, and is actively matching buyers and sellers
   • STARTUP DB, the company's startup database, partnered with Dealroom.co B.V., a global startup database provider, to launch information services for US-based startups
3. Scale the business via M&A and co-creation of new ventures
   • The company invested in newly established GO Job Inc. and now treats it as an equity-method affiliate, and is fully committed to supporting GO Job's growth starting from next fiscal year
   • The company announced a capital and business alliance with Sparx Group, a top-3 largest venture capital firm in Japan with deep expertise in deep tech. Under the alliance, Sparx Group will acquire up to 300 million yen or 3% of Four Startups' outstanding shares. The alliance will enable Four Startups to provide human resource support to all portfolio companies of Sparx Group, opening significant new business opportunities.

• Full-year fiscal 2026 (ending March 2026) guidance has been revised upward for the second time in the fiscal year, to 5.1 billion yen in total revenue and 1 billion yen in operating profit. This upward revision follows stronger-than-planned productivity improvement in the Human Capital Business that exceeded the second quarter revised target.
• Hitting 5 billion yen in revenue and 1 billion yen in operating profit ahead of the company's 10th anniversary in September 2026 is a symbolic milestone for the firm. The new full-year target is already nearly at the upper bound of the original planned target for fiscal 2007 (ending March 2027).
• The company is accelerating initiatives to achieve the original fiscal 2027 target one year ahead of schedule.
• Specific guidance for next fiscal year (ending March 2027) is still being finalized as part of the annual budgeting process. Management intends to release the formal full-year guidance for next fiscal year in May 2026, and is targeting an ambitious growth plan that exceeds the current fiscal year's performance.

1. Human Capital Business: In the reported quarter, revenue increased 42.0% year-over-year, order value increased 62.0% year-over-year. Growth was driven by a sales strategy focused on increasing placements per employee and rising average service fees. For the overall placement service line within this segment, the average placement fee reached an all-time high of 4.32 million yen, driven by rising starting salaries amid inflation and intense hiring competition, as well as incremental fee rate increases. Key operational KPIs all showed strong year-over-year growth: new candidate interviews increased 86.5%, unique users with scheduled interviews increased 41.1%, and placements per employee increased 48.4%. This segment is the primary growth driver for the company, with notable productivity improvements that have lifted overall group profitability. It contributes the majority of the company's total consolidated revenue. 2. Open Innovation Business: The segment continues to grow steadily. It recognized sponsor revenue related to the GRIC2025 conference in the quarter. The startup policy offering previously named "Public Affairs" was renamed to "Acceleration" as part of a segment rebranding. No specific absolute financial figures for the segment were provided in the transcript.

• Productivity may see a temporary moderate decline in the first quarter of next fiscal year, due to the onboarding of new graduate hires that will increase total headcount.
• The startup HR segment that forms the core of Four Startups' business has inherently higher placement difficulty than general HR services, which means current productivity levels are lower than many generalist HR firms, representing an ongoing operational challenge.

Q: Per employee placement volume has jumped dramatically to 0.62 placements per month. What specific policies drove this sharp improvement, and what is your plan to expand headcount while continuing to improve productivity?

A: After falling to a low of 0.44 placements per month from a previous high of 0.88, we shifted our sales strategy to set explicit quantitative targets that have recovered productivity to 0.62. Per employee interview volume has also increased 80% to 90% year-over-year, so we expect further productivity improvements going forward. We do expect a temporary moderate productivity decline in the first quarter of next fiscal year as new graduate hires onboard, but historical performance shows productivity rebounds in subsequent quarters after onboarding. Over the medium term, we are targeting to reach 1.0 placement per employee per month as soon as possible via improved matching accuracy and stronger CRM initiatives that leverage our historical candidate database.

Q: Current productivity is still lower than peer HR firms. Why is this the case, and how do you plan to address it?

A: Our core business model focuses on startup placement and senior/executive roles, which is inherently much more difficult than general HR placement. Large generalist HR firms have typically avoided this space because the economics are less attractive than general hiring, which allowed us to build a niche position aligned with our mission to support new industry growth in Japan. We acknowledge that productivity lags peers for this structural reason, with placements per employee being the key metric to improve. We are actively working to reach our 1.0 placement per month target, then continue growing from that point, to build the leading high-growth, high-productivity startup-focused HR firm. We will continue to disclose productivity progress publicly for stakeholders.

Q: The stronger-than-expected third quarter after a strong second quarter suggests the revised full-year target is already conservative, and signals you are targeting the upper end of the range for next fiscal year. Are you planning for any incremental unexpected costs that keep the current target conservative?

A: At this stage we are only indicating the broad range of our expectations for next fiscal year, and we are still in the process of finalizing the budget. We are planning for an ambitious growth outlook that exceeds this year's performance. We will release the formal full guidance for next fiscal year in May, so please wait for that publication for full details.

Q: What contributions has Ms. Tsuneta made to the Human Capital business, and is there a risk that the Human Capital business growth will slow down now that CEO Shimizu will focus more on new businesses?

A: Since our initial public offering, Ms. Tsuneta has been the primary leader driving the growth of the core Human Capital business, with my role focused on supporting her work. She has built the growth story for our core startup HR business, consistently overcame challenges to deliver strong growth, and has demonstrated strong leadership across the board of directors and management meetings. With the transition to co-representation, we have a clear division of responsibilities: she leads the existing core business, and I lead new business development. I am very confident that this structure will drive strong growth across both existing and new businesses going forward.

Q: Can you update on the status of GO Job, and provide more detail on your partnership with Strike Co., Ltd. for the startup M&A business?

A: GO Job was established in 2025 as a carve-out from GO Inc., with GO Inc. and Four Startups as co-lead shareholders. It operates a human resource placement and recruitment platform for taxi and trucking industry roles. Other shareholders include Sparx Asset Management, SBI Leos Hifumi, and Daiwa House Ventures, all of whom contribute their unique resources to support growth. The business leverages GO Inc.'s strong existing brand in the taxi industry, combined with our human resources business expertise to build out the platform. GO Job is an equity-method affiliate, has received growth capital from Sparx Group's Future Creation Fund, and is structured as an exit-oriented venture. Our goal is to build a high-growth business that generates returns for the Four Startups Group. Regarding our M&A business with Strike: we initially announced a joint startup M&A brokerage partnership in 2025, and have since built internal capabilities to operate M&A brokerage independently as well. We have secured dedicated M&A talent via internal transfers and external hiring. I am personally committed to aligning the business with next fiscal year's plan, and to driving material contribution from the M&A business starting from the fiscal year after next. We will continue to share regular updates on the M&A business' progress with stakeholders.