Bleach,Inc. Q1 FY2026 earnings call

Overall Business Progress

• The firm is steadily executing medium- to long-term business base strengthening initiatives in line with its September 2025 published business plan, continuing aggressive ad investment to launch new products and categories, and improved product portfolio diversification this quarter.
• Expanded the business portfolio by establishing Aurum Tech in March 2025 to build a new revenue base focused on supporting foreign beauty and consumer brands enter the Japanese market.

Product Portfolio Strategy

• Prioritizing launching new products and advancing new products to core product status to grow the business; portfolio expansion has improved revenue stability amid high external volatility, and the firm aims to further reduce volatility by converting in-flight product launches to core status and growing Aurum Tech sales.
• While total handled products increased steadily, moving new products to core status takes longer than targeted; management is accelerating this process via increased marketer training to speed up core product conversion.

Human Resource Investment

• Added 26 new graduate hires in April 2025, increasing average marketer headcount to 111. Per-marketer revenue is temporarily low as new hires complete training, which management frames as intentional near-term human capital investment.
• 90% of the firm's marketers are hired without prior industry experience, and the firm has a systematized training program to convert new hires to productive contributors quickly.

Aurum Tech Business Development

• Secured exclusive general agency rights for global top-tier beauty device brand JOVS in Japan, which has 30 billion yen in annual global transaction volume and strong brand recognition, product design and technical capability. Aurum Tech will manage end-to-end operations from procurement to sales and logistics for JOVS in Japan.
• Aims to steadily grow client and brand count at Aurum Tech to expand this new revenue segment.

Balance Sheet and Financial Health

• Cash and deposits decreased due to corporate tax payments, long-term debt repayment, and advance payments for Aurum Tech inventory, resulting in a net cash position (cash minus interest-bearing debt) of 6.77 billion yen as of end-1Q.
• Equity ratio stands at 73.7%, which management assesses as strong financial health.

1. Core ad business (parent company): Parent company advertising profit reached 871 million yen (0.871 billion yen), up 28.8% year-on-year, with revenue increasing 8.7% year-on-year. Growth was driven by increased advertising profit in pharmaceuticals, daily goods, functional labeled foods, and human resources recruitment categories. Total handled products increased to 56, with core products (monthly revenue over 10 million yen) rising from 19 to 20, contributing to revenue stability via risk diversification. ROAS improved as existing core products delivered better return on ad spend, offsetting lower ROAS from newer products. 2. Aurum Tech (subsidiary, beauty device sales and brand support): Revenue reached 180 million yen (0.18 billion yen), up 110 million yen (0.11 billion yen) from the prior quarter, driven by strong sales of JOVS brand beauty devices. Total client count increased to 4, all focused on beauty, healthcare and lifestyle sectors. Aurum Tech contributed an incremental 20 million yen (0.02 billion yen) in gross profit this quarter. 3. Category-specific performance: Year-on-year, sales grew for functional labeled foods, financial services, pharmaceuticals, and human resources recruitment, while sales declined for functional labeled foods, online medical care, and beauty salons versus the prior quarter, due to media environment changes and client strategy shifts. Daily goods and pharmaceuticals sales grew versus the prior quarter.

• Management did not disclose a full-year earnings guidance for the 2026 June term this quarter, citing continued uncertainty from external environment impacts that prevent establishing a reasonable forecast.
• Management committed to promptly publish a full-year guidance as soon as a reasonable, accurate forecast can be established, after noting improving conditions through the first quarter.
• The firm's stated strategic priority for the full fiscal year is to focus resources on improving the core business product portfolio and building out Aurum Tech's growth base.

• Individual product performance is exposed to high volatility from changes in ad media environments, customer sales strategy shifts, and product seasonality that impacts revenue per conversion.
• New core product conversion is slower than targeted, creating near-term pressure on sales growth despite an increase in total handled products.
• Near-term labor costs are rising due to aggressive marketer and sales consultant hiring and training to support future growth, pressuring near-term operating profit.

Q: What are the results of increased marketer hiring, and what is your future hiring direction? / A: 90% of the company's marketers are hired without prior industry experience, and the company has a systematized training program that converts new hires to productive contributors quickly. The company will continue expanding new graduate hiring, with planned incoming classes of ~45 hires in April 2026 and ~60 hires in 2027, while updating training programs to balance organizational expansion and productivity growth. Mid-career hires for immediate contribution will also be used flexibly to accelerate growth in new business areas like Aurum Tech.