MATSUMOTO INC. Q3 FY2026 earnings call

• Company Legacy & Strategic Restructuring

  • Matsumoto has over 90 years of operating history, growing from a small photography studio to become the only listed graduation album manufacturer in Japan, with established transactions with approximately 7,000 schools across Japan and holding the second-largest market share in the graduation album industry.
  • The company is undergoing a corporate redefinition to adapt to changing social and educational environments, targeting a long-term market capitalization goal of 10 billion yen, with a clear three-phase transformation plan: 2027 April term as the year of business structure transformation, 2028 April term targeting expansion into AI×EdTech and expanded growth investment, and 2029 April term targeting 5 billion yen in net sales and 600 million yen in operating profit.
  • The company's core DNA is defined as "preserving the human form and journey for future generations", which has evolved from capturing photographs to printing memories, and now to preserving individual growth journeys as digital data.

• Growth Flywheel & External Support Structure

  • The company leverages a growth flywheel where existing business and new ventures reinforce each other, combining 90 years of accumulated trust and 7,000-school network with cutting-edge technologies including AI analysis and Web3 solutions introduced early via overseas alliances, creating a unique growth cycle only Matsumoto can deliver.
  • In May 2025, the company strategically transferred the position of largest shareholder to Brand New Retail Initiative Fund, which brings specialized expertise in capital policy design, project evaluation, fundraising strategy, M&A and alliance structuring, and deep domain knowledge in AI and blockchain technology. This new partnership supports rapid implementation of the new Digital Asset Treasury (DAT) initiative that requires cross-disciplinary design across finance and technology.

• Next-Generation DAT Initiative Core Plan

  • DAT (Digital Asset Treasury) is the company's flagship future growth project, with a vision to convert individuals' non-cognitive (invisible) capabilities into verifiable digital assets, addressing three core flaws in the current evaluation system: fragmented growth records, lack of objective proof of non-quantifiable effort, and talent mismatch between job seekers and employers.
  • The initiative solves these issues via three steps: 1) Quantify non-cognitive capabilities using AI and behavioral science, including the Implicit Association Test (IAT) to measure hard-to-quantify soft skills such as self-awareness and sociability, and multimodal AI to analyze voice, facial expressions, text and daily behavior logs to eliminate human bias; 2) Securely store tamper-proof activity records on the Solana blockchain to create a permanent, globally trusted lifetime digital proof infrastructure for education and employment; 3) Create value via token economics to enable a self-sustaining circular ecosystem where DAT Treasury acts as a central bank to fund learner growth, companies pay fees for access to verified candidate data, and successful learners return revenue to the fund to support the next generation of learners, shifting education from a "cost center" to an "investment and circulation model".
  • The ecosystem offers two core funding models: Immediate Payout, which supports ongoing learning by rewarding current learning processes to prevent capable learners dropping out for financial reasons, and Future Investment, which takes upside from future career success and startup growth to act as an engine for increasing the entire system's asset value.
  • The initiative is currently in the proof-of-concept stage, with a clear roadmap moving to trial operation, system refinement, and full social implementation to achieve steady market penetration.

• Recent Operational Developments

  • The company recorded three special gains in the third quarter: insurance cancellation proceeds (already included in prior guidance), partial factory land sale proceeds, and real estate penalty income (both unplanned), as part of the company's efforts to return to net profit for the first time in three periods.
  • In March 2026, the company signed a Memorandum of Understanding (MOU) with JPYC Inc. to conduct proof-of-concept testing of stablecoin use for the DAT initiative. JPYC Inc. is the pioneer that established Japan's first legally recognized electronic payment method stablecoin. The MOU covers three core areas of collaboration: early launch of social experiments to advance the DAT initiative using JPYC's stablecoin, joint discussion of stablecoin design as an incentive mechanism, and joint discussion of monetization strategy for the DAT initiative. Any future developments will be disclosed via official IR announcements.

The provided transcript does not split financial results into formal product segments, only distinguishing between existing core business and new business. For the third quarter of the 2026 April term: total net sales amounted to 657 million yen, operating loss was 550 million yen, ordinary loss was 473 million yen, and net loss for the quarter was 227 million yen. The quarter's results are driven primarily by the existing graduation album business, as the company is currently allocating resources to investment in new ventures. Selling, general and administrative expenses for the quarter totaled 157 million yen, with a one-time temporary increase from joint project investments with external development partners; management expects expense levels to generally follow historical trends going forward, though additional one-time costs may occur.

• Full year 2026 April term guidance is maintained at: 2.155 billion yen in net sales, 93 million yen operating loss, 12 million yen ordinary loss, and 57 million yen net profit, representing a 710 million yen improvement in net profit year-over-year, and targets the first annual net profit for the company in three periods.
  • The company is shrinking non-core assets via actions such as the partial factory land sale to free up capital for new business investment, aligned with long-term strategic targets.

The provided transcript does not contain any explicit discussion of operational risks or operational failures. The only implied risk noted is the prolonged low market valuation of the company (current market capitalization is 1.4 billion yen to 1.5 billion yen, which management acknowledges is far too low), and market uncertainty around the company's new strategic direction, which management says they will address via tangible business progress to meet shareholder expectations.

The call scheduled a question and answer section focused on the question of avoiding delisting, but the full transcript of the Q&A exchange was not included in the provided source material.