KIYO Learning Co.,Ltd. Q2 FY2025 earnings call

• Overall Financial and Operational Progress

  • Total company maintained strong high growth with 15.7% YoY revenue increase in 2Q cumulative. Operating profit improved 36 million yen YoY, with progress on profitability improvement initiatives. 2Q cumulative operating cash flow improved 60 million yen YoY, and ending cash and cash equivalents reached approximately 3.2 billion yen.
  • The company adjusted its accounting rule to align reporting with operational structure: all corporate sales of Studying courses are now fully classified to the Corporate Education segment, compared to split classification previously.
  • Hiring of growth-focused talent (engineers, course developers, marketers, sales staff) is progressing very well, with 19 net new hires in the first half, bringing total headcount to 145 as of end-June. The company is successfully attracting top talent from established education firms.

• Studying Business (Individual Online Qualification Prep)

  • Cumulative "success stories" from passing students exceeded 30,890, creating a positive growth cycle where increased social proof drives higher future enrollment.
  • The company continued TV CM campaigns with celebrity spokesperson Haruna Kawaguchi to drive brand awareness, paired with digital marketing across the year.
  • Expanded course offerings with two new high-value targeted courses: AI-graded Rongo Core Method Course for bar/pre-bar exams (taught by an 8-month short-term pass who is also an AI engineer, with instant AI grading to speed up learning), and a low-price, full-service National Public Service Senior Course led by an industry-recognized expert instructor.
  • Continued aggressive expansion of generative AI-powered learning tools: added instant AI grading, AI question answering, AI learning guidance, AI real-time ability scoring, personalized AI study plans, AI-timed question review, and new AI subtitles for all course videos that enable flexible learning in silent/noisy environments, pin-point review jumping, and easier AI utilization of course content.
  • The company holds multiple patents for its AI personalized learning technology, building competitive advantage.

• Corporate Education Business (AirCourse Subscription Service)

  • Growth is accelerating driven by increasing large enterprise clients, with adoption across all industries and company sizes. Corporate use of the Studying offering for employee skill development is also growing rapidly.
  • Expanded the standard all-access course library to 1,179 courses, adding high-demand content including a generative AI prompt course for corporate users and updated compliance courses covering new/amended legislation.
  • The customer success team focuses on onboarding guidance, driving internal usage, and upselling from pilot department rollouts to full company deployment to increase revenue per client.

• New Business Development

  • Studying Career: A direct recruiting service matching qualified Studying graduates with hiring companies and recruiters, launched end-2024, leveraging the company's existing corporate connections.
  • AirCourse AI Knowledge: A new generative AI service for corporate clients that includes pre-built job-specific prompt templates and internal prompt/成果 knowledge sharing, with growing user adoption.

For the 2Q cumulative period ended June 2025:

1. Studying Business: After the accounting rule change to reclassify all corporate sales of Studying courses to the Corporate Education segment, revenue grew 11.3% year-over-year. Under the old accounting rule, revenue grew 13.0% year-over-year. Cash-based revenue for 2Q cumulative grew 13.5% year-over-year, and standalone Q2 cash-based revenue grew 16.4% year-over-year (an all-time record for the segment). New paid members grew 18.3% year-over-year in standalone Q2. The advertising expense ratio improved 5.7 percentage points year-over-year to 51% of total costs, down from 55% in the prior year period.
2. Corporate Education Business: After the accounting rule change (now including all corporate sales of Studying courses), revenue grew 44.2% year-over-year. Under the old accounting rule, revenue grew 32.9% year-over-year. Contracted customer count reached 1,057 companies, crossing the 1,000 company threshold. The average churn rate remained below 1% at 0.92% for the quarter. Total company 2Q cumulative revenue was 2.29 billion yen, up 15.7% year-over-year. Standalone Q2 total revenue grew 11.9% year-over-year.

• The company reaffirmed its previously announced full year 2025 December term guidance, with no upward or downward revision provided in this call.
• The company remains on track to hit its full year revenue and profit targets, with cumulative first half results progressing steadily toward full year goals despite a minor timing-related miss on accrued revenue in 2Q.
• The previously released Medium-Term Management Plan 2026 remains in effect as a strategic reference.

• The average churn rate for the Corporate Education segment increased slightly quarter-over-quarter, and the company is increasing retention-focused initiatives to address this small uptick.
• Standalone Q2 total company operating profit was roughly flat year-over-year due to pre-investment in talent hiring and advertising spending in preparation for stronger growth in the second half of the year.
• 2Q cumulative accrued operating profit came in slightly below the company's prior forecast, due to unanticipated timing differences in the recognition of accrued revenue for the Studying business; this is a timing shift not a fundamental growth issue, as cash-based revenue (the leading indicator of performance) remained very strong.

No Q&A section was included in the provided earnings call transcript.