Macbee Planet,Inc. Q2 FY2026 earnings call

• Company Overview & Core Business

  • Founded in 2015, listed in 2020, relisted on the Prime Market in July 2024, with approximately 200 full-time employees.
  • Core business is result-based marketing focused on customer lifetime value (LTV), combining accumulated data, technology, and ROI-adjusted consulting to charge fees only when pre-agreed client outcomes are achieved.
  • Business scope covers the full marketing funnel: outcome-based strategic PR in the awareness segment, user acquisition in the conversion segment, and outcome-based churn prevention in the CRM retention segment.

• Competitive Advantages & Market Outlook

  • Long-term data accumulation improves marketing efficiency, delivering an 88% long-term retention rate for the top 20 clients, with one-stop cross-sell/upsell driving steady increases in per-client revenue.
  • Result-based marketing carries lower risk for clients: Macbee Planet absorbs the risk of non-converting ad spend, unlike the traditional click-based fee model where clients bear all risk.
  • The global result-based marketing market is projected to grow from 300 billion yen (2023) to 900 billion yen (2030) and 3 trillion yen (2050), as more marketing service categories shift to outcome-based pricing.

• M&A Strategy

  • Prioritizes M&A that deepens and expands existing result-based service capabilities, with annual smaller growth investments capped at under 1 billion yen.
  • Top priority: 1 billion to 10 billion yen M&A in existing core segments, targeting either established result-based marketing firms or fee-based firms with overlapping client bases to convert their business to the result-based model.
  • Second priority: Multi-billion yen investments in influencer/SNS marketing segments to build new consumer touchpoints. Unpenetrated new segments have lower priority.
  • Past M&A delivered expected results: 2021 acquisition of Alpha improved gross margins, 2023 acquisition of All Ads expanded client base and marketing talent, 2024 acquisition of PR Cloud Tech added outcome-based PR capabilities.

• Current Operational Initiatives

  • Delivered a large exclusive advertising handling contract for a leading vertical industry media, scheduled to launch in early 2026, with progress on track to be announced with Q3 results.
  • Set targets of 3 billion yen (current fiscal year) and 5 billion yen (next fiscal year) in gross new consumer touchpoints from new media, and current fiscal year is already on track to exceed the 3 billion yen target.
  • Focuses on building industry-specific vertical media and leveraging TikTok/YouTube to improve profit margins, adapting to shifts in consumer behavior driven by generative AI.

For the full 2025 April term: Finance segment: 216.72 billion yen in revenue, accounting for 42% of total annual revenue. Wellness segment: 185.76 billion yen in revenue, accounting for 36% of total annual revenue. Other segments (led by human resources, plus legal services, apps, games, etc.): 113.52 billion yen in revenue, accounting for 22% of total annual revenue. For the 2026 April term first half: Total company revenue is 25.2 billion yen, up 2% year-over-year. Operating profit decreased year-over-year due to gross profit contraction and a 760 million yen increase in selling, general and administrative expenses (SG&A) driven by higher advertising and personnel costs.

• Full-year 2026 April term guidance is revised downward from the original opening guidance to 51 billion yen in revenue and 3.7 billion yen in operating profit.
  • Revenue is expected to gradually recover from Q3 2026 April term: securities industry advertising spend is expected to recover after phishing-related system investments concluded in H1, while card loan/financing industry results are expected to improve sequentially after Q2 new media expansion. Healthcare industry revenue is projected to decline sequentially through Q4, while human resources revenue will be supported by a strong Q4 peak season.
  • SG&A is projected to decline in H2: advertising expense will be cut by 230 million yen compared to H1, falling to 120 million yen, and will be further reduced to around 300 million yen annually from next fiscal year, after the company concludes its initial brand awareness campaign via taxi ads and shifts PR to solution-focused messaging.
  • The planned full-year dividend per share is maintained at 55 yen, and the company will target a 20% payout ratio starting from next fiscal year.
  • Management's preliminary view for next fiscal year (2027 April term) projects revenue of 58 billion to 59 billion yen, with operating profit growing roughly 20% year-over-year, driven by both the resolution of temporary headwinds and the impact of ongoing strategic initiatives.

• Concentration risk: The top 20 clients account for 70% of total revenue, so adverse changes to a small number of large clients' business conditions or advertising spend have an outsized impact on overall company results, as seen in H1 2026 April term.
  • Temporary industry headwinds: Phishing attacks in the Japanese securities industry forced large unplanned system investments that triggered widespread advertising spend cuts, reduced media acquisition volumes in the card loan segment due to post-COVID surge in demand that led to sharply higher user acquisition costs and negative spread for Macbee Planet, and competitive changes in the healthcare industry forced client advertising unit price cuts that reduced near-term revenue.
  • Changing consumer behavior: The rise of generative AI and SNS has shifted consumer information search patterns away from traditional comparison sites, requiring costly reconfiguration of Macbee Planet's marketing channel mix.
  • Strategic execution risk: Management has stated that failure to deliver on its medium-term media transformation strategy will lead to stagnant growth over the next 2-3 years.

Q: What was the magnitude of impact from recent securities industry phishing incidents, and when will activity recover? / A: Multiple large securities firms were forced to allocate massive unexpected spending to system security upgrades after widespread phishing attacks in early 2025, leading them to cut advertising spend sharply in H1. System upgrades are now complete, and advertising activity is expected to recover to near-normal cruising levels from Q3. It will still take time to return to prior year levels after the sharp H1 decline, however.

Q: What is driving higher media remuneration that is pressuring gross margins, and what is the company's response? / A: The pressure is concentrated in the card loan segment: post-pandemic income declines led to a multi-year surge in consumer demand for card loans, which pushed up the competitive cost of acquiring new users far above fixed client fee rates, creating negative spread that forced Macbee Planet to temporarily cut output volumes. The company accelerated new media prospecting in Q2, which has already delivered partial recovery, with further improvement expected in H2.

Q: How much gross margin improvement can new media initiatives deliver, and is acquiring existing vertical media an option? / A: Standalone proprietary vertical media can deliver 20% to 30% profit margins, so the company targets a 20% overall gross margin on a 2-3 year medium-term timeline, which cannot be achieved within the current medium-term plan period. Acquiring existing unlisted emerging vertical media is a very real possibility the company will actively consider.

Q: What is the company's stance on share buybacks given the current low PER? / A: Management believes it is best to announce a share buyback alongside a clear update to the company's long-term growth strategy once future prospects are more certain. Moving prematurely with incomplete visibility is not the right timing, so the company will approach any buyback with both caution and urgency.

Q: How will recent financial industry consolidation impact Macbee Planet's client contracts? / A: There is some risk of contract changes post-consolidation, but management views consolidation as a net positive. As in-house marketing becomes more complex, result-based specialized support from firms like Macbee Planet is in higher demand, and consolidation typically creates opportunities to expand marketing budget share rather than just replacing existing contracts.