KIYO Learning Co.,Ltd. Q1 FY2025 earnings call

Overall Financial Performance

• Total company revenue grew 20% year-over-year, maintaining strong high growth, with operating profit increasing 30 million yen year-over-year. The quarter saw a strong start to full-year performance against the full-year operating profit target of 300 million yen.
• The company's structural seasonal pattern means first-quarter accrual-based revenue is naturally low (most revenue from prior-year course purchases is recognized in the third and fourth quarters) while the company invests in TV advertising in the first quarter to capture January new year resolutions, leading to typical first-quarter negative operating profit; this quarter's profit improved year-over-year due to better efficiency.

Studying Business Operational Updates

• The company held advertising spending flat year-over-year, reallocating budget to high-value, difficult certification courses with higher returns while reducing spend on lower-return courses, driving cash-based revenue growth without increasing ad spend. New paid member count was flat overall, but high-ticket course participation grew steadily, and repeat/updated course purchases and cross-course purchases from past successful students grew, supporting continued growth.
• The company continued running TV CM campaigns with celebrity Haruna Kawaguchi focused on building long-term brand awareness and capturing casual self-learners from the broader majority segment that previously used self-study or in-person courses. It also launched in-person合格 celebration events for top certifications, providing post-qualification career support to build brand reputation and drive word-of-mouth growth. Cumulative published合格 student testimonials reached nearly 30,000 (29,842), creating a positive growth cycle.
• The company expanded its course lineup to 38 total courses with the March launch of the Certified Public Accountant (CPA) course, a large, high-demand market. The new CPA course is priced significantly lower than competitors, features high-quality instruction, and leverages the Studying platform's flexible mobile access and AI tools to suit busy students and working professionals, and is off to a strong start.
• The company continued enhancing AI-powered learning tools, including generative AI support (AI Master Teacher) for answer grading, real-time Q&A, and personalized study advice, plus traditional AI tools for individual optimization: AI ability scoring, custom study plans, and automated personalized review questions. Multiple AI-related patents have been secured to maintain competitive advantage.
• The company now offers optional printed textbooks for students, which has driven strong average order value growth, though this has increased cost of goods sold proportional to the new revenue.

Corporate Education Business Operational Updates

• Growth is accelerating due to an increase in large enterprise clients; the company supports organic upselling by starting with department-level pilot deployments before expanding to full enterprise or group company use, and strengthened customer success to support onboarding and drive higher utilization. Demand for Studying courses for enterprise employee upskilling is also growing rapidly, creating a new growth opportunity.
• The company has expanded course content to cover newly relevant topics including generative AI and updated content to match recent regulatory changes such as the revised Child Care and Family Care Leave Law.

New Business Initiatives

• Studying Career, launched one year prior, is a direct recruiting service that matches Studying's certified members with hiring companies and recruiters. Closing transaction volumes are growing, and it creates synergies by making the core Studying service more valuable for students by providing post-qualification career opportunities.
• AirCourse AI Knowledge, also launched one year prior, is a enterprise generative AI service focused on knowledge management, with pre-built prompt templates for common business use cases and organizational sharing of successful generative AI outputs. It positions the company as a full human capital management platform supporting hiring, training, and AI-enabled productivity improvement for enterprises.

Governance Update

• The company will launch an officer stock ownership plan (after launching an employee stock ownership plan in November 2024 that saw high employee participation) to align officer and shareholder incentives, improve stock liquidity by increasing demand for the company's stock, and reduce insider trading risk for officer stock purchases. The plan will launch in June and does not include company subsidy for officer purchases, unlike the employee plan.

1. Studying Business (Individual Online Certification Courses): Accrual-based revenue grew 17.3% year-over-year, cash-based revenue grew 11.5% year-over-year, hitting a record high for the first quarter. The advertising to cash-based revenue ratio improved 7.2 percentage points year-over-year to 67.2%, driving improved profitability for the segment. This segment accounts for the majority of the company's total revenue. 2. Corporate Education Business: Revenue grew 36.1% year-over-year, maintaining high growth as the company's second core business. Its SaaS offering AirCourse saw steady growth in contracted client count, with the average quarterly churn rate maintained at a low 0.8%. The number of unlimited-access standard courses expanded by 270 year-over-year to 1,150 courses as of the end of the first quarter.

• The company maintained its full-year 2025 December fiscal year target of 300 million yen in operating profit, and stated that first-quarter performance is off to a solid start meeting expectations for this target.
• Management expects advertising spend as a percentage of revenue to decline through the rest of the fiscal year, as the high first-quarter ratio is driven by annual TV CM investment concentrated in Q1.
• The company will continue building the newly launched CPA course, Studying Career, and AirCourse AI Knowledge to grow them into meaningful future revenue pillars, while scaling the two core existing businesses.

• No material new operational or financial risks were explicitly discussed in the earning call transcript. The only structural risk noted is the seasonal pattern of negative Q1 operating profit due to concentrated advertising investment in Q1 and deferred revenue recognition in later quarters, which management clarified is an expected annual pattern and not a cause for concern.

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