7354.T

• Business Model and Core Competitiveness

  • The company is a sales solution provider that solves difficult problems that client companies cannot resolve on their own (such as labor shortages and sales performance improvement) leveraging strong sales and marketing capabilities to help clients maximize revenue.
  • Core competency 1: Talent matching mechanism that matches diverse products with talent. All locations are concentrated in urban areas to improve talent acquisition efficiency. All locations operate as multi-product centers that handle multiple projects across diverse channels, enabling "non-selective hiring" that creates opportunities for hard-to-deploy talent with limited available working hours, and enables flexible staffing adjustments based on client demand, driving high productivity and scalability.
  • Core competency 2: Strict knowledge and quality compliance management. The company employs more than 2,500 full-time outbound staff, continuously accumulates specialized outbound know-how, and maintains a stricter compliance system than clients. It implements a double/triple check system: post-application confirmation by an independent quality control team, and double checking of confirmation results by a monitoring department to prevent complaints and troubles in advance, earning high trust from blue-chip clients and public sector entities.
  • Core competency 3: Organizational culture focused on delivery and high-productivity talent development. A unique education and evaluation system creates optimal talk scripts per product, implements strict quality control, discloses daily performance rankings, designs high performance-based incentives, and promotes cross-level coaching to generate a positive cycle of high productivity and high incentives, enabling flexible work arrangements tailored to individual needs.
  • Outcome-focused fee structure: Most contracts adopt a performance-based fee structure tied to sales results such as number of acquisitions or closed deals, which encourages frontline teams to pursue results exceeding targets and maximizes overall company revenue. The company also flexibly accommodates fixed-fee contracts based on client needs and project characteristics.

• Overall FY2025 Financial Performance

  • Total revenue increased 8.3% year-over-year, driven by growth in the three core focus domains, offsetting revenue declines from unprofitable project rationalization.
  • Operating profit increased 48.7% year-over-year, reaching 118.5% of the initial forecast, driven by revenue structure optimization and successful price negotiations.
  • EBITDA increased 8.2% year-over-year, with the lower growth rate explained by reduced depreciation on right-of-use assets following 2024 cost structure reform; actual cash generation remained in line with initial expectations and was solid.
  • The operating margin recovery was driven by three factors: 1) increased revenue share of high-margin core domains, which improved overall group profitability; 2) completion of price renegotiations for previously low-profitability projects, which optimized the overall portfolio; 3) successful price pass-through to offset rising labor costs, leveraging the company's superior productivity, leading to a V-shaped recovery in margin after a 2023 temporary decline.

• M&A Activity

  • In October 2025, the company acquired 100% of Saiyoubu Co., Ltd. and Moneypedia Co., Ltd., successfully expanding its business base: added recruitment outsourcing (RPO) to its business portfolio, and entered influencer marketing for the existing insurance segment. The acquisitions added a business segment that combines stable revenue with high growth potential.
  • Saiyoubu is a fast-growing RPO firm specialized in professional roles centered on dentistry and healthcare. The company will leverage existing sales synergies to acquire more clients and expand into healthcare adjacent areas to drive further growth.
  • Moneypedia operates an SNS influencer pull-type customer acquisition model that delivers high engagement at low CPA. It runs online FP consultation services, insurance agency business and web media operations, with a fully digital, efficient customer acquisition and closing process. The company will combine Moneypedia's digital customer acquisition capability with its own BPO operational and scaling capability to further improve profitability and growth in the insurance segment.

• Medium and Long-term Strategy

  • The medium-term management vision DmMiX Vision 500 (final year ending December 2030) identifies Outbound, Hybrid, and DX Fulfillment as core focus domains, with the target of improving profitability and strengthening the financial structure by FY2026 ending December. As of December 2025, the strategy is progressing well with the core three domains already reaching 87.3% of total revenue.

• FY2026 ending December full-year guidance:

  • Forecast revenue of 24.0 billion yen, an increase of 5.8% year-over-year, driven by continued solid growth across all three core domains and full-year contribution from the 2025 M&A acquisitions.
  • Forecast operating profit of 2.35 billion yen, an increase of 10.2% year-over-year (double-digit growth), driven by revenue growth and ongoing profitability improvement.
  • Forecast net profit of 1.75 billion yen, and forecast EBITDA of 3.6 billion yen.
  • Both Hybrid and DX Fulfillment are targeted to deliver continued double-digit revenue growth in FY2026.
  • Outbound collaboration with the financial sector is not included in the FY2026 plan, with the company maintaining a conservative forecast while future growth potential is expected as the partnership formalizes.

• Capital Policy and Shareholder Return:

  • The company will implement a share repurchase program with an upper limit of 1.5 million shares and a total amount of 0.3 billion yen, aimed at improving capital efficiency, enhancing shareholder returns, and enabling flexible capital policy. The combined total payout ratio (dividends plus share repurchases) for FY2025 reached 46.5%, exceeding the 40% target.
  • The FY2025 year-end dividend was revised upward from the initial 6 yen per share to 7 yen per share. The planned FY2026 year-end dividend is 9.5 yen per share, representing a further increase driven by significant net profit growth.
  • Short and medium-term capital policy targets maintain ROE of 10% or higher and pursue additional upside; medium and long-term during the investment recovery phase, the company targets ROE in the 20% range, and pursues both accelerated profit growth and optimal capital efficiency to increase corporate value ahead of the 2030 final year of DmMiX Vision 500.

• Capital Expenditure Guidance:

  • No new large-scale capital investments are planned for FY2026; capital expenditure will be limited primarily to replacement of existing equipment.
  • Depreciation and amortization are expected to increase year-over-year in FY2026, driven by an increase in tangible fixed assets from PC replacements and full-scale amortization of intangible assets acquired through M&A.

1. Outbound: Revenue grew 5.1% year-over-year. It serves as the company's strong stable revenue base that underpins overall corporate growth. It accounts for a share of the combined 87.3% total revenue contribution from the three core focus domains.
2. Hybrid: Revenue grew 30.4% year-over-year. It is the top-line growth driver for the entire company, and progress against its 2030 DmMiX Vision 500 target stands at 114.8%, exceeding plan. It accounts for a share of the combined 87.3% total revenue contribution from the three core focus domains.
3. DX Fulfillment: Revenue grew 25% year-over-year. Progress against its 2030 DmMiX Vision 500 target stands at 107.9%, exceeding plan. It accounts for a share of the combined 87.3% total revenue contribution from the three core focus domains.
4. Combined core three focus domains (Outbound, Hybrid, DX Fulfillment): As of December 2025, the combined revenue share reached 87.3%, an increase of 7.1 percentage points year-over-year, accounting for approximately 90% of total company revenue.
5. Inbound (centered on the public sector): Management maintains a cautious medium-term outlook, and will continue to focus only on highly profitable projects and areas where the company's operational expertise can be leveraged.
6. Research, other and on-site businesses: Flat performance is expected.
7. New RPO sector: RPO added via M&A, focused on accelerating growth in digital recruitment outsourcing through strengthened advertising and sales efforts.

There is no specific discussion of material risks or operational failures in the provided transcript. Client budget visibility remains relatively low, and budget execution is not based on multi-year medium-term plans, which creates some forecasting uncertainty, though the company has observed clients consistently executing their budgets even under this low visibility environment.

Q: Is the recovery of the marketing business primarily driven by the business of major communication carrier A in the telecommunications industry?

A: That understanding is broadly correct. In the telecommunications industry where we operate, increased sales and marketing investment starting from carrier A tends to spill over to other carriers. We provide BPO services to multiple carriers, not just A, so when A strengthens customer acquisition activities, this spreads to other carriers, which drives growth in our marketing business. Additional growth drivers include the strong growth of Hybrid and DX Fulfillment over the past several years, and successful price pass-through that outpaced rising labor costs across client companies, so growth is the result of multiple factors.

Q: What changes have you observed in the business environment for existing domains, even if the overall performance has not changed year-to-date?

A: Particularly in DX Fulfillment, the content that clients demand has changed. Driven by hiring difficulties, many companies are finding it difficult to directly hire sales and back-office operational staff in-house. As a result, there has been a huge increase in the trend of outsourcing entire business processes beyond just call center operations that companies previously handled with in-house staff. Our ability to support comprehensive BPO that supports clients across all areas, not just marketing-related functions like sales and customer acquisition, is driving the current growth of Hybrid and DX Fulfillment.

Q: You mentioned that clients pulled forward budget spending in the second quarter. Can you update us on subsequent client trends? Did the full year end with a heavy concentration of spending in the first half with no budget replenishment in the second half? What is the background for this trend? Also, will the coming fiscal year still see the largest share of revenue and profit in the first quarter, as it did over the past two years?

A: In the second quarter, we did see clearer earlier budget spending than in typical years, because we received large orders for projects that we had not previously anticipated. However, this did not lead to a material reactionary decline in the second half, and order pace was maintained, which led to an upward revision to full-year guidance in the third quarter. There has been no change to the existing dynamics that visibility remains low and budget execution is not based on multi-year medium-term plans, but we are increasingly recognizing that clients do consistently execute their budgets even in this low visibility environment. The background is that we initially took a conservative view of this new trend, but we have seen rising client urgency and a greater sense of necessity around sales and marketing customer acquisition activities, and this trend is expected to continue beyond FY2026. Regarding quarterly concentration, it will still be the case that the first quarter is the largest, but we expect the concentration will be less pronounced than last year, with a more gradual seasonal pattern. Outbound has historically had the strongest first quarter concentration, but as the weight of Hybrid and DX Fulfillment increases in total revenue, seasonality is gradually becoming less pronounced even though it still exists.

Q: What is the scale of revenue and profit for the financial sector segment?

A: We have approximately 10 client companies in total, including insurance firms, securities firms and other financial institutions that we provide BPO services to. Financial sector revenue accounts for approximately 10% of total company revenue, and operating profit also accounts for approximately 10% of total operating profit. This 10% share currently consists mostly of long-standing traditional businesses such as insurance agency operations and financial institution counter services. Future growth is expected from new business expansion such as cross-selling of new financial products by communication carriers, which did not exist previously.

Q: When do you expect tangible projects to emerge from the convergence of communication carriers and financial services?

A: I expect that we will see some concrete movement within the current fiscal year. While communication carriers have publicly announced that they will prioritize this area, large firms move slowly due to inherent challenges such as sorting out role allocation with partner companies, deciding responsible departments, clarifying operational scope at shops and call centers, and siloed organizational structures. However, particularly at carrier A, there is a strong sense of urgency and momentum to accelerate expansion into banking and securities within this year and deliver results, so I expect we will see movement this year.

Q: Why is the net profit growth rate for FY2026 higher than the operating profit growth rate? Is this a persistent factor?

A: The higher net profit growth comes from a temporary factor: we inherited a net operating loss carryforward from a subsidiary that we are now absorbing following the liquidation of the subsidiary as part of group organizational efficiency improvement. This reduces corporate tax burden, leading to a temporary lower effective tax rate in FY2026 and pushes up net profit. This is a one-off factor specific to FY2026, and the effective tax rate is expected to return to normal levels from next fiscal year onward.