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• Overall Financial Results

  • Itoki achieved 4 consecutive years of revenue growth (hitting a new all-time high for the 4th consecutive year) and 6 consecutive years of operating profit growth, with 3 consecutive years of new all-time high operating profit. For the 2025 December term, consolidated revenue was 153.6 billion yen (11.0% YoY growth), and consolidated operating profit was 13.6 billion yen (35.8% YoY growth). ROE reached 17.7%, exceeding the medium-term plan target of 15%.
  • Operating profit increased 6.3 billion yen from revenue growth and 3.3 billion yen from improved gross profit margin, partially offset by a 6.0 billion yen increase in SG&A expenses driven by strategic spending on personnel, IT investment, depreciation and license costs from the newly launched core system, and an increased performance-linked bonus.
  • Cash flow from operating activities recovered to positive 8.9 billion yen from a negative prior-year result (driven by one-off effects of bill abolition and shorter payment terms), representing a 9.9 billion yen YoY improvement. Free cash flow was positive 5.1 billion yen.

• Medium-Term Plan "RISE TO GROWTH 2026" Progress

  • The plan's original 150 billion yen revenue target was achieved one year ahead of schedule. As of the end of 2025, 72% of the planned 70.0 billion yen total investment (including strategic expenses) has been completed. R&D, strategic investment, and human capital investment are over 50% complete, while production facility investment is just under 50% complete; investment will continue to progress toward full completion. Shareholder return is already ahead of plan.
  • 7 of 7 planned "7Flags" key strategic initiatives are progressing well: the ERP migration project skipped the on-premise phase and completed a direct jump to SaaS in 3 years, leaving Itoki fully AI-ready. The 3.0 billion yen target for reducing out-of-group cash outflows was achieved one year early, and the company is targeting a 5.0 billion yen reduction by 2026. Only the Office 3.0 initiative is experiencing monetization delays, driven by the need to build an entirely new market from scratch and customer wait-and-see behavior that has kept average order values low, though order volumes are already above plan.

• Office Business Trends

  • The company is seeing three overlapping growth waves in the office market: (1) the ongoing post-COVID wave of investment in "attractive offices" to encourage employee return to work; (2) the wave of office investment tied to human capital investment driven by the Ito Report, with particularly strong growth in inquiries from regional cities struggling with hiring; (3) the new late-2025 wave of investment in factory workplaces, driven by demand to close engagement gaps between office and factory staff and improve hiring competitiveness for regional factories. 58% of projects are now located outside of Tokyo, and renewal projects account for the majority of orders. Office products account for 58% of office business revenue (down from prior levels), with services at 18% and construction at 24%; product sales are now largely derived from integrated office design and solution proposals. In-house building projects have a 1.3 percentage point higher profit margin than tenant projects, driven by higher execution flexibility, with most in-house building projects owned by regional SMEs aligning with the current regional growth trend.

• OFFICE 3.0 New Growth Engine

  • Office 3.0 is Itoki's new recurring business model that adds data-driven operational support services to traditional product sales and space design: it includes Workers Trails (employee location visualization for free address offices), Reserve Any (AI-powered meeting room reservation that improves utilization without adding new space), and Data Trekking (consulting that analyzes actual workspace usage and productivity). This model creates a continuous relationship with customers, generates recurring service revenue, and positions Itoki as the preferred partner for future large-scale remodelling projects.
  • Office 3.0 order volume hit 91 units, 1.5x YoY, with adoption by multiple large corporations and repeat orders already occurring. The initiative is currently focused on building adoption track records, so revenue has not yet hit target, but management expects revenue to catch up. The Office 3.0 service framework is now being expanded to factory workplaces, retail stores, and research labs, with early positive customer reception for all new verticals. Over 50 patents have been filed in the Office 3.0 space in data, sensing, and AI, 1.5x the total filings from the prior medium-term plan period. AI agents will enable further evolution of solutions through spatial sensing and work transformation recommendations.

• Dalton Business Evolution (Equipment & Public Segment)

  • Dalton, Itoki's research facility subsidiary, is evolving its business model along the same 3-stage framework as Itoki's office business: LAB1.0 (product sales, where Dalton is the domestic market pioneer with top market share and 10,000+ client installations), LAB2.0 (full space design and consulting, with an in-house design department newly established last year that has already tripled consulting revenue and secured a 15.0 billion yen large-scale project), and LAB3.0 (data-driven solutions with the adapted Data Trekking for Lab product). Dalton will move its headquarters to Toyosu in October 2026 and open a new combined headquarters and showroom to shift to a customer visit-based sales model and demonstrate its end-to-end LAB solutions. The research facility market is currently booming driven by government R&D investment for new technology, increased open innovation, and growing demand for rental labs, with Dalton well positioned to capture this growth through collaboration with Itoki.

• Governance and Long-Term Planning

  • Itoki will strengthen its board governance by establishing a nomination committee and remuneration committee, composed primarily of outside directors, with Ms. Mariko Bando appointed as chair of the nomination committee. The company has launched a CEO succession planning program with a medium-long term track that selected 16 participants for a next-generation leadership academy (12 of whom are long-term tenured Itoki employees) covering 7-10 year development, and a short-term track with 4 candidates undergoing targeted training for near-term succession.
  • The Itoki group is undergoing reorganization to consolidate office-related businesses under Itoki and research facility businesses under Dalton, with a target of one legal entity per country for overseas operations to improve governance. Management outlined a long-term three-phase growth framework: the 2021-2023 period was "Hop", the current 2024-2026 period is "Step", and the period through 2029 will be a large "Jump" phase including inorganic growth, with the foundation for the jump already completed.

• For the 2026 December term (the final year of the "RISE TO GROWTH 2026" medium-term plan), Itoki guides revenue of 167.5 billion yen (9.0% YoY growth) and operating profit of 16.0 billion yen (16.9% YoY growth). The targeted operating margin is 9.6%, ROE is 18.5%, and payout ratio is 40%.
  • The 2026 revenue target is considered highly achievable based on current order pipeline: as of February 2025, total held orders are 117% of the prior-year level, above the 109% needed to hit the 9% growth target.
  • For shareholder returns, the 2025 December term full-year dividend was set at 75 yen per share, a 10 yen increase from the original annual forecast. For 2026, the company guides a full-year dividend of 90 yen per share, a 15 yen increase from 2025. The company maintains its medium-term target payout ratio of 40%, and expects total shareholder return to exceed plan if 2026 performance meets expectations.

1. Workplace Business: 9.1% YoY revenue growth, 36.7% YoY operating profit growth. Operating profit margin reached 9.9%, an increase of 2.0 percentage points from the prior year. 2. Equipment & Public Facilities Business: Achieved revenue and profit growth, driven by strong performance from Dalton, the group's subsidiary that specializes in research facility equipment. Dalton, which is the core operating entity of this segment, recorded full-year 2025 revenue of 21.4 billion yen, operating profit of 1.7 billion yen, and an operating profit margin of 8%, hitting all-time record highs for the subsidiary.

• The Office 3.0 new business initiative is currently experiencing monetization delays, as it requires building an entirely new market from scratch, and customers are in a wait-and-see phase that has kept average order values lower than originally planned. Management notes that more effort is required in 2026 to improve monetization for this high-potential new business.

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