INTLOOP Inc. Q1 FY2026 earnings call

Core Strategic Direction

• Executing under the medium-long term management plan "INTLOOP VISION2030", which targets 100 billion yen in annual revenue and 15 billion yen in annual operating profit by 2030. Consistent focus on prioritizing high-margin project acquisition.

Talent Acquisition Progress

• High-level (senior/executive) talent hiring proceeded on track in Q1: 3 senior hires at INTLOOP parent; 4 Managing Directors and 3 Directors at INTLOOP Strategy; 7 Senior Managers at INTLOOP Project Management.
• Mid-career hiring for PMO, consultants, and engineers is progressing smoothly; approximately 100 new graduate hires joining in April 2026 have already been secured.

M&A and Organizational Updates

• Acquired all shares of Comtech, a facility/electrical construction-focused firm, as a subsidiary of Dics Holdings to meet growing demand for data center construction and infrastructure projects at Dics Group, which was facing capacity constraints due to labor shortages in the construction segment.
• Completed acquisition of the "Techpit" programming learning platform business from Techpit Inc. in November 2025; the business has ~19,000 registered users, which INTLOOP will use to expand project outreach and upskill internal employees and contracted freelancers.
• Implemented a stock split on September 1, 2025 to improve share liquidity; the stock hit an all-time high after the previous earnings announcement.

Operational Infrastructure Expansion

• Approved an additional office space expansion near the Tokyo headquarters (relocated to current headquarters in February 2025) to accommodate growing headcount; move-in scheduled for June 2026, with no impact on current fiscal year results.

Service Portfolio Expansion

• Comtech's addition strengthens the facility construction segment, completing a end-to-end service delivery structure from upstream strategic consulting to downstream construction implementation, covering system planning/development/maintenance, digital marketing, and talent development.

Consolidated overall: Revenue of 9.631 billion yen (21.0% YoY increase); Operating profit of 697 million yen (37.8% YoY increase); Net profit of 373 million yen (55.7% YoY increase). Gross profit margin improved 2.4 percentage points YoY to 29.4%, operating profit margin improved 0.8 percentage points YoY to 7.2%, solidifying 7%+ operating margin. INTLOOP standalone (parent entity): Revenue increased 20.0% YoY; gross profit margin improved 2.5 percentage points YoY; operating profit grew ~30% YoY. DX Group (consolidated subsidiary): Contributed to consolidated revenue and profit growth, supported by strong industry DX demand. KOZOCOM (consolidated subsidiary since July 2025): Contributed to consolidated profit growth. No revenue contribution percentage breakdown per individual segment is provided in the transcript.

• Management maintains the full-year 2026 July fiscal year consolidated guidance with no upward or downward revision: full-year revenue target of 43.8 billion yen (30.5% YoY increase), operating profit target of 3.1 billion yen (41.8% YoY increase), and net profit target of (53.5% YoY increase).
• Q1 revenue reached 22% of the full-year target, and Q1 operating profit reached 23% of the full-year target; this is considered a smooth on-track start, as the company's business naturally has a second-half weighted performance trend due to ongoing large-scale annual talent hiring.
• Management reaffirms the strategy of continuing to prioritize high-margin project acquisition to improve gross profit, and expects on-track mid-career hiring to contribute significantly to full-year performance expansion in the second half.
• The company expects to provide an update on its venture capital fund business sometime during the current fiscal year.

• Dics Group faces labor shortages in the facility/electrical construction segment, which has limited its ability to accept new projects, even as market demand for data center and infrastructure construction grows.
• Hiring costs have seen slight upward pressure in the current tight labor market for skilled technical and consulting talent.
• The Techpit business acquired via business transfer has uncompleted development that will require additional investment and expansion by INTLOOP to reach full operational potential.

Q: What is the expected annual cost increase from the new office expansion, and what are the plans for the space? / A: Management plans to lease an additional office space roughly equal in size to the current headquarters, with a slight premium to accommodate projected future hiring growth. The expected additional monthly cost is approximately 30 million yen, with occupancy starting in June 2026, so no cost impact will hit the current fiscal year.

Q: Why did INTLOOP acquire the Techpit programming learning platform business? / A: Management had long wanted to build an internal education platform for full-time employees and contracted freelancers, and the acquisition was economically attractive: it provided a pre-built platform and a database of ~19,000 registered users for a reasonable transfer price. INTLOOP will expand the platform to serve internal skill development and freelancer recruitment.

Q: What is Comtech's core business, and what synergies does it create with Dics Group? / A: Comtech focuses on small-scale facility electrical work such as office wireless LAN and telephone installation. Dics Group already holds several hundred million yen worth of existing construction project orders that it could not fulfill due to labor shortages, so Comtech's workforce will be allocated to these projects. Management plans to scale Comtech to pursue larger projects and will continue seeking additional M&A targets in the construction segment.

Q: What are the key drivers of the strong gross profit growth this quarter, and is there room for further improvement? / A: The improvement comes from two key strategies: prioritizing high-margin project acquisition, and negotiating price increases on existing projects when team rotations occur. Since competitors have already raised prices, INTLOOP's prices remain competitive even after adjustments, so there is still room for further increases. Management remains committed to hitting the 15% operating profit margin target for VISION2030 through ongoing margin improvements.