PERSOL HOLDINGS CO.,LTD. FY2026 FY Earnings Report

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Executive Summary

For the fiscal year ended March 2026, the Company reported Revenue ¥15,558.3B (YoY +¥1,045.9B +7.2%), Operating Income ¥665.1B (YoY +¥90.8B +15.8%), Ordinary Income ¥554.5B (YoY +¥165.9B +42.7%), and Net Income attributable to owners of parent ¥426.9B (YoY +¥68.2B +19.0%), achieving year-over-year revenue and profit growth. Top-line expansion was broad-based across segments led by BPO (+24.3% YoY), and Operating Income grew double-digits, outpacing sales growth. Operating margin improved to 4.3% (up +0.32pt from 3.96% prior year), supported by SG&A efficiency (SG&A ratio 18.6%, down -0.25pt from 18.9%) and higher profitability in BPO and Technology. Ordinary Income increased materially despite higher financial expenses of ¥28.9B, and Net Income margin rose to 2.7% (up +0.27pt from 2.5%), indicating improved profitability. Cash generation was robust with Operating Cash Flow (OCF) ¥774.4B (YoY +12.5%) and Free Cash Flow ¥431.2B, sufficiently covering dividends of ¥233.6B and growth investments.

Drivers of Performance

Revenue ¥15,558.3B (YoY +7.2%) grew across all segments, led by BPO +24.3% and Technology +9.3%. By segment composition, Staffing was the largest at ¥5,995.9B (38.5% of sales), followed by AsiaPacific ¥4,963.5B (31.9%), Career ¥1,505.0B (9.7%), BPO ¥1,353.9B (8.7%), and Technology ¥1,136.3B (7.3%). BPO delivered high growth (+24.3%) driven by accumulated outsourced projects and large contracts; Technology captured expanding digital demand (+9.3%). Career grew +5.7% on a sound job advertising market, Staffing +3.3% supported by resilient temporary staffing demand, and AsiaPacific expanded +4.3% but faced economic and FX headwinds. Other segments surged +54.3% but remain limited in scale at ¥603.6B, contributing modestly to consolidated results.

Cost of sales was ¥12,003.6B (77.2% of Revenue), yielding Gross Profit ¥3,554.7B (Gross Margin 22.8%), essentially flat from 22.9% prior year (-0.04pt). SG&A was ¥2,899.0B (SG&A ratio 18.6%), improved -0.25pt YoY reflecting scale benefits and efficiency gains. Operating Income ¥665.1B (Operating margin 4.3%) increased +15.8% YoY, demonstrating operating leverage well above revenue growth of +7.2%. By segment, BPO posted Operating Income ¥103.3B (margin 7.6%, +54.9% YoY), Career ¥349.3B (margin 23.2%, +15.0%), Technology ¥101.4B (margin 8.9%, +17.3%), and Staffing ¥348.0B (margin 5.8%, +12.3%) — all achieving profit growth. AsiaPacific declined to ¥105.1B (margin 2.1%, -10.2%) as FX and regional economic shifts pressured profitability. Other segments recorded a loss of ¥-9.8B but reduced deficit by 68.9% YoY. Net financial expense (financial income ¥15.7B less financial expense ¥28.9B) amounted to ¥-13.2B, deteriorating from ¥-3.6B prior year, but improvement in equity-method loss to ¥-2.6B (prior year ¥-6.5B) supported a significant increase in Ordinary Income to ¥554.5B (+42.7% YoY). Profit Before Tax was ¥649.4B, with income taxes ¥201.3B (effective tax rate 31.0%), resulting in Net Income ¥448.0B (+18.8%) and Net Income attributable to owners of parent ¥426.9B (+19.0%).

Segment Analysis

• Staffing (Revenue ¥5,995.9B, Operating Income ¥348.0B, margin 5.8%) recorded Revenue +3.3% YoY and Operating Income +12.3%, showing resilient growth. Stable staffing demand and pass-through of labor costs supported margins, though the low-margin, high-volume nature limits margin expansion.
• BPO (Revenue ¥1,353.9B, Operating Income ¥103.3B, margin 7.6%) grew Revenue +24.3% and Operating Income +54.9%, driving consolidated profit growth. Accumulation of outsourced projects and large contract wins materially improved margins.
• Technology (Revenue ¥1,136.3B, Operating Income ¥101.4B, margin 8.9%) increased Revenue +9.3% and Operating Income +17.3%, capturing digital demand. Margin at 8.9% remains high and positions the segment as a medium-term growth driver.
• Career (Revenue ¥1,505.0B, Operating Income ¥349.3B, margin 23.2%) grew Revenue +5.7% and Operating Income +15.0%, maintaining exceptionally high profitability. A robust job advertising market and high value-added services underpin the 23.2% margin.
• AsiaPacific (Revenue ¥4,963.5B, Operating Income ¥105.1B, margin 2.1%) expanded Revenue +4.3% but saw Operating Income decline -10.2% YoY. FX and regional economic volatility compressed margins to a low level.
• Other (Revenue ¥603.6B, Operating Income ¥-9.8B) grew Revenue +54.3% and narrowed the loss by 68.9% YoY, but remains loss-making.

Key Financial Metrics

• Profitability: Operating margin improved to 4.3% (up +0.32pt from 3.96%), supported by higher profitability in BPO and Technology and resilience in Staffing, while low margins and profit decline in AsiaPacific limited further margin upside. Gross margin 22.8% was flat (-0.04pt from 22.9%). SG&A ratio 18.6% (down -0.25pt from 18.9%) was the main driver of operating margin improvement. ROE improved substantially to 20.9% (prior year 18.8%), aided by higher Net Income margin and maintained asset efficiency. Revenue-to-Ordinary Income ratio improved to 3.6% (up +0.9pt from 2.7%), reflecting higher non-operating income and improved equity-method results.
• Cash Quality: OCF / Net Income ratio was 1.73x (OCF ¥774.4B ÷ Net Income ¥448.0B), indicating solid cash backing of earnings. OCF / EBITDA ratio was 0.77x (OCF ¥774.4B ÷ EBITDA approximately ¥1,008.4B), somewhat low due to cash outflows for income taxes ¥273.2B and lease payments ¥208.4B which restrained cash conversion. Accrual ratio ((Net Income ¥448.0B – OCF ¥774.4B) ÷ Total Assets ¥6,205.4B) ≒ -5.3%, negative and consistent with cash-backed earnings.
• Investment Efficiency: Total asset turnover was high at 2.51x/year (Revenue ¥15,558.3B ÷ Total Assets ¥6,205.4B), reflecting the asset-light nature of staffing services. Capital expenditure was ¥38.5B, about 0.11x depreciation ¥364.1B, suggesting underinvestment in IT/automation that may hinder medium-term productivity gains. Goodwill stood at ¥940.2B (15.2% of total assets, 39.4% of equity), up +34.2% YoY reflecting M&A activity; impairment risk warrants mid-term monitoring.
• Financial Soundness: Equity Ratio was 35.4% (prior year 35.1%) with Net Assets ¥2,387.9B against Total Assets ¥6,205.4B, and debt-to-equity roughly 1.60x. Current ratio was about 1.08x (Current Assets ¥3,353.6B ÷ Current Liabilities ¥3,112.7B), borderline, indicating the importance of liquidity buffers for seasonal working capital needs. Interest-bearing debt (bonds & borrowings) was ¥326.3B (current ¥207.4B, non-current ¥118.9B), with Debt/EBITDA ≈ 0.32x, very low. Interest coverage was strong at ≈19.5x (EBIT ¥563.2B ÷ financial expense ¥28.9B). Lease liabilities totaled ¥514.8B (current ¥201.4B, non-current ¥313.4B) with right-of-use assets ¥540.3B, implying slightly higher effective leverage.

Cash Flow Analysis

OCF was ¥774.4B (YoY +12.5%), 1.73x Net Income ¥448.0B, indicating solid cash generation. Subtotal (before working capital changes) was ¥1,049.2B, with depreciation ¥364.1B and impairment losses ¥16.4B as main non-cash items. Working capital movements included increase in trade receivables -¥73.8B, increase in trade payables +¥51.7B, and increase in contract assets -¥19.0B, resulting in a modest net working capital outflow. Cash outflows included income taxes paid -¥273.2B and lease payments -¥208.4B, which suppressed the OCF/EBITDA ratio to 0.77x. Investing CF was -¥343.2B, primarily capital expenditure -¥38.5B, intangible asset investments -¥130.7B, and acquisitions of subsidiaries -¥193.7B, partially offset by investment disposals ¥32.4B and business divestitures ¥25.7B. Free Cash Flow was ¥431.2B (OCF ¥774.4B + Investing CF -¥343.2B), ample to fully cover dividend payments ¥233.6B and debt repayments. Financing CF was -¥448.2B: proceeds from short-term borrowings ¥500.0B and bond issuance ¥100.0B were offset by short-term borrowings repayments -¥400.1B, long-term borrowings repayments -¥103.7B, lease repayments -¥208.4B, and dividend payments -¥233.6B. Share buybacks were effectively zero; shareholder returns centered on dividends. Cash and cash equivalents increased by ¥22.0B from ¥828.2B at the beginning of the period to ¥850.2B at period-end, reflecting FX translation effects of +¥38.9B.

Quality of Earnings

Profit increase was primarily driven by Operating Income growth of +15.8%, indicating high-quality earnings from core operations. Non-operating items included other income ¥34.3B (0.22% of Revenue) and other expenses ¥24.8B, both small relative to revenue, implying low dependence on one-off gains. Net financial expense ¥-13.2B (financial income ¥15.7B less financial expense ¥28.9B) worsened from ¥-3.6B prior year, mainly due to increased interest burden from borrowings and bonds, but Interest Coverage remains strong at ≈19.5x. Equity-method loss improved to ¥-2.6B from ¥-6.5B prior year, with limited impact on Ordinary Income ¥554.5B. OCF ¥774.4B vs Net Income ¥448.0B (1.73x) and Accrual ratio -5.3% demonstrate strong cash backing of reported profits and limited divergence between accounting earnings and cash generation. However, OCF/EBITDA 0.77x is somewhat constrained by tax and lease cash outflows, warranting attention to cash conversion variability.

Forecasts / Guidance

Against the full-year forecast (Revenue ¥16,650.0B, Operating Income ¥710.0B, Net Income ¥465.0B; net income attributable to owners of parent and dividend guidance undisclosed; EPS forecast ¥19.60), actual results achieved Revenue ¥15,558.3B (achievement rate 93.4%), Operating Income ¥665.1B (93.7%), and Net Income ¥448.0B (96.3%), falling slightly short. Shortfall in Operating Income was approximately ¥44.9B and Net Income shortfall approximately ¥17.0B, both within ±10% variance thresholds. Strong BPO and Technology performance supported consolidated results, while AsiaPacific profit decline and FX headwinds likely weighed on outcomes. Dividend guidance was annual ¥6.50, while actual dividend was ¥11.5 (interim ¥5.5 + year-end ¥6.0), reflecting interim performance.

Shareholder Returns

Annual dividend was ¥11.5 (interim ¥5.5, year-end ¥6.0), a substantial increase from ¥4.5 prior year. Payout Ratio was 59.4% (Dividend ¥11.5 ÷ EPS ¥19.42), relatively high, though company policy targets an adjusted EPS-based payout ratio of 53.0%, considered sustainable. With Free Cash Flow ¥431.2B vs dividend payments ¥233.6B, FCF coverage is approximately 1.85x, indicating ample capacity. Share buybacks were effectively zero this period; returns focused on dividends. Mid-term plan targets adjusted EPS-based payout ratio of 50%+, so with continued earnings and FCF growth, stable dividend increases are feasible. Total Return Ratio was 59.4% (dividends only); future buybacks or additional dividend increases will depend on performance and capital policy.

Risk Factors

1. Continued profitability deterioration in AsiaPacific: AsiaPacific reported Operating Income ¥105.1B (-10.2% YoY) with margin 2.1%, the lowest among segments. FX volatility and regional economic swings are likely causes, and translation differences on overseas operations (+¥143.5B) significantly affect comprehensive income. Given AsiaPacific accounts for 31.9% of revenue, sustained profitability weakness could slow consolidated margin improvement.

2. Impairment risk from increased goodwill: Goodwill stands at ¥940.2B (YoY +34.2%), representing 39.4% of equity. The Company conducted M&A including 11 newly consolidated entities this period, increasing intangible assets not subject to amortization. Goodwill/EBITDA ≈ 0.93x suggests recoverability is high, but deterioration in earnings trends for BPO or Technology could trigger impairment charges. Maintaining mid-term earnings is key to avoiding impairments.

3. Thin liquidity buffer and working capital volatility risk: Current ratio is about 1.08x, borderline, with Current Assets ¥3,353.6B vs Current Liabilities ¥3,112.7B and limited buffer. Large trade receivables ¥2,055.7B and contract assets ¥314.8B pose risk of cash flow pressure from collection delays or seasonal working capital increases. Maintaining cash and committed lines (cash & equivalents ¥850.2B) is important.

Industry Benchmarks (Reference — Company Analysis)

Profitability & Returns

Company ROE 20.9% exceeds the industry median 10.1% by +10.8pt, indicating superior capital efficiency. Conversely, Operating Margin 4.3% is -3.8pt below the median 8.1%, reflecting the structurally low-margin, high-volume nature of the staffing model.

Growth & Capital Efficiency

Revenue growth 7.2% trails the industry median 10.1% by -2.9pt but remains stable. Expansion in BPO and Technology offers upside potential for future acceleration.

※ Source: Company aggregation

Key Takeaways from the Financial Results

1. High-growth BPO & Technology are key to improving consolidated margins: BPO posted Revenue +24.3% and Operating Income +54.9% with margin 7.6%, while Technology posted Revenue +9.3% and Operating Income +17.3% with margin 8.9%. Combined these segments account for 16.0% of revenue and, if they continue to expand, could lift consolidated Operating Margin from 4.3% to above 5%. Mid-term order trends and margin trajectories in BPO & Tech will determine consolidated direction.

2. Strong cash generation supports dividend sustainability: OCF ¥774.4B and Free Cash Flow ¥431.2B comfortably covered dividend payments ¥233.6B. FCF coverage 1.85x, Debt/EBITDA ≈ 0.32x, and Interest Coverage ≈ 19.5x demonstrate robust financial resilience, supporting the sustainability of a payout ratio of 59.4% (53.0% on adjusted EPS basis). With continued earnings growth, stable dividend increases are feasible under the mid-term policy of 50%+ adjusted EPS payout ratio.

3. AsiaPacific profitability recovery and liquidity management are focal points: AsiaPacific represents 31.9% of revenue but delivered a low Operating Margin of 2.1% and Operating Income decline of -10.2% YoY, likely due to FX and regional economic factors. Reversing profitability in this segment is necessary to raise consolidated margin ceilings. Additionally, a current ratio of 1.08x and thin liquidity buffer require careful cash management around seasonal working capital swings and collection risk.

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This report was automatically generated by AI analyzing XBRL earnings disclosure data. It does not constitute an investment recommendation for any specific security. Industry benchmarks are reference information compiled by the Company based on public filings. Investment decisions are the responsibility of the reader; please consult professional advisors as needed.