Aidma Holdings,Inc. Q1 FY2026 earnings call

• Mission & Long-Term Strategic Direction

  • Core management philosophy: Contribute to the realization of all people's dreams; corporate vision: Expand the possibilities of the world.
  • Positioning Japan's rapid aging and labor force decline (projected 7 million net worker reduction by 2030, equaling 33 trillion yen in contracted labor market shrinkage) as a growth opportunity, with the goal of exporting Japanese-developed solutions to other aging developed economies.
  • Target market pain point: Small and medium enterprises (SMEs) face extreme hiring difficulty: 2026 graduate opening ratio of ~9x for firms with <300 employees, and 60% 3-year turnover for firms with <5 employees. The only viable solutions in this environment are leveraging external resources and improving productivity with technology, which are Aidma's two core solution categories.
  • Long-term goal: Expand supported business verticals from current offerings (originally sales support, now adding HR, back-office support) to 30-40 supported verticals by 2030, and build a seamless work infrastructure platform that connects latent workers (people who want to work but face barriers like location/time restrictions/skill gaps) with businesses, transitioning Aidma to a background enabler role from its current front-facing support position.

• Completed Strategic Initiatives & In-Progress Progress (3 core 2026 growth strategies + 2 mid-to-long term initiatives)

  • 1. Growing unique new orders and increasing cross-sell/追加 unit uptake: The core revenue growth priorities, tracked via KPIs of maximizing new business negotiations, improving order win rate, and maximizing additional unit proposal acquisition.
    • New business negotiation: Launched a unique domestic model of offering free AI-powered external call answering in exchange for 3 negotiation slots per customer. 400 firms already use the service, delivering ~2x the win rate of traditional cold call appointments, with internal preparations ongoing to hit a target of 30,000 companies providing negotiation slots in 2026, which would generate an expected 900 new orders per month at 10% conversion.
    • Order win rate: Q2 2026 result was flat due to planned reallocation of sales staff and tenured employees to customer support. Current improvement efforts include daily 5-minute short training by top-performing staff for all sales and customer support teams, which data confirms correlates with lower turnover. All training will be converted to e-learning and added to the MEMBER-S customer communication platform. Development is also ongoing to integrate CRM functionality into sales support packages to increase added value.
    • Additional unit proposals: Data confirms a clear correlation between increased customer communication and higher additional unit uptake: weekly 15-30 minute regular meetings improve customer satisfaction vs current monthly meetings. Cloud worker hiring and training for this task is underway, with 300 monthly meetings already achievable, targeting 1,000 by March 2026 and 4,000-5,000 by June 2026 to increase customer issue identification and additional unit sales.
  • 1. Cost optimization of COGS and SG&A
    • CRM construction: The centralized CRM system that unifies customer data across lead, negotiation, and post-order support phases is complete and already in internal use. Current work focuses on building AI-powered automated generation of customer-facing documents (proposals, estimates, schedules) that were previously created manually, which will reduce labor requirements for internal and cloud workers, improve quality, and lower related costs.
    • AI development and utilization: AI is already used for calling, development, and customer success, delivering 1.3x higher productivity for system development vs non-AI workflows. From January to March 2026, non-engineering business staff are completing 3 months of half-day twice-weekly training to test if they can complete engineering work via AI; if validated, this training will be provided free to the 650,000+ members of Aidma's Mamaworks cloud worker platform to enable cloud workers to handle engineering tasks. Unique TTS (text-to-speech) technology for AI calling has been developed to a high-level conversational standard, with full call handling development expected to be nearly complete by March 2026, after which TTS will be expanded to negotiations and meetings to enter the voice tech space and optimize the large cost of cloud worker outsourcing.
  • 1. Discontinuous growth initiatives
    • M&A brokerage organization: Has been formally launched, with internal training completed, and full client proposal activity starting in Q2. Current efforts focus on reducing the currently high COGS ratio for M&A support while maintaining quality, alongside building track record. A dedicated PMI (post-merger integration) organization has also been launched to drive P/L target achievement and synergy for in-group M&As; the plan is to first maximize in-group subsidiary P/L, then launch client-facing PMI services once the process is replicable.
    • ALL-IN accounting SaaS for new corporations and SMEs: The ERP/accounting SaaS business was acquired from STS Inc. on December 26, 2025 (replacing an original plan to build in-house, which would have required excessive development time for AI integration). ALL-IN will be integrated into Aidma's service unit lineup and provided free of charge to customers, to enable monthly client meetings where Aidma can review financial statements and propose additional needed units. AI will be added to enable performance forecasting and automated recommendation of actions, with workflow integration into current support processes first, followed by expansion to drive additional unit revenue.
  • Mid-to-long term growth initiatives
    • SpotWorks: A platform where companies post spot tasks for cloud workers to complete, already in internal use with ~2,500 registered workers. A hybrid AI-cloud worker function has been added: low-complexity tasks are completed first by AI, and cloud workers only update results if changes are needed, to reduce costs. Test marketing for in-office spot work is underway, with both in-office and remote offerings being developed in parallel due to limited available in-office worker capacity.
    • Sales work infrastructure: Development is underway on functionality that allows cloud workers to register directly in client sales systems and complete work without Aidma intermediation, with launch planned for March 2026 followed by refinement to establish the business model.

• Recent Business Updates

  • ALL-IN business acquisition: Completed acquisition of the ALL-IN ERP business from STS Inc., which brings core accounting and finance SaaS capabilities that form an important foundation for future expansion.
  • Cost structure: COGS ratio hit 27% in Q1, a 5% improvement year-over-year and 3% improvement vs full-year prior fiscal year. SG&A ratio was 49%, a slight year-over-year increase due to a one-time temporary increase in allowance for bad debts to account for expanded credit exposure from prior period order growth; the allowance will be gradually reduced over the remaining three quarters to normalize SG&A for the full year. Reported operating margin was 23% after the allowance, and would have been ~25% without the one-time adjustment.

Overall consolidated revenue reached a record high of 3.7 billion yen, growing 23% year-over-year and 3% quarter-over-quarter, with 22% progress against the full-year budget. Operating income was 0.8 billion yen, with an operating margin of 22% and 21% progress against the full-year budget. Combined order volume across Sales Support and Talent Support hit a quarterly record of 2,328 orders (75% year-over-year growth, slight quarter-over-quarter increase), with 25% full-year progress for both segments. Sales Support: Revenue saw a slight quarter-over-quarter decrease, which was expected due to concentrated contract expirations from orders received in Q4 of the prior two fiscal years, and continued growth is projected from Q2 onward based on growing order volume. Talent Support: No specific absolute revenue figure was shared, but order volume progress against the full-year plan is 25% in line with plan.

• Full-year 2026 August term progress is broadly in line with plan: 22% revenue progress, 21% operating income progress, 25% order progress for both Sales and Talent Support, all matching management expectations.
  • Management maintains the full-year plan, and expects continued growth momentum from Q2 2026 onward, after the one-time temporary impacts of contract expirations in Sales Support and organizational restructuring are absorbed.
  • Dividend guidance is maintained at 30 yen per share for the full year.
  • All ongoing strategic initiatives are on track per their disclosed timelines: 30,000 negotiation slots target for 2026, 1,000 additional customer meetings by March 2026, 4,000-5,000 by June 2026, AI calling completion by March 2026, SpotWorks expansion, and Sales work infrastructure launch by March 2026, all remain in place.
  • Continued strategic growth investment will be maintained through the remainder of the fiscal year, aligned with the plan to drive long-term scalable growth.

• The temporary decrease in cross-sell orders (172 fewer quarter-over-quarter) and limited order growth rate in Q1 is a result of planned organizational restructuring (reallocating sales staff to customer support), which is an expected outcome within plan, but creates near-term pressure on top-line growth until the restructuring is completed.
  • M&A brokerage support currently has a relatively high COGS ratio, which pressures near-term profitability for this new line of business until process improvements and scale reduce costs.
  • The limited number of available in-office workers for SpotWorks in-office task testing limits the near-term expansion pace of this new service line.
  • Large-scale labor force decline is an unprecedented social phenomenon not seen since the fall of the Roman Empire, so its full long-term impact on markets and business demand is hard to predict accurately.
  • The planned capability for non-engineers to complete development work via AI is still in testing, so it has not been validated yet, and success is not guaranteed.

No question and answer section is included in the provided transcript.