PERSOL HOLDINGS CO.,LTD. FY2027 Q1 Earnings Report

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Executive Summary

The first quarter was characterized by higher revenue and earnings, with profit growth outpacing top-line expansion. Revenue was ¥4,240.2B (+13.5% YoY), Operating Income was ¥188.8B (+22.6%), Profit Before Tax was ¥186.4B (+22.1%), and quarterly profit attributable to owners of the parent was ¥121.9B (+14.3%). The primary driver of revenue growth was the strong growth of the Asia Pacific segment, while the primary driver of earnings growth was an improvement in the SG&A ratio, confirming growth accompanied by cost discipline.

Factors Affecting Results

【Revenue】Revenue was ¥4,240.2B, up +13.5% YoY. By segment, Asia Pacific led company-wide growth with revenue of ¥1,454.4B (+26.0%), while Staffing maintained the largest revenue contribution at ¥1,559.7B (+3.3%). Technology and BPO posted steady growth of ¥289.0B (+7.6%) and ¥341.1B (+6.5%), respectively, while Career was the only segment to report a revenue decline, at ¥383.4B (-0.9%).

【Profit and Loss】Operating Income was ¥188.8B (+22.6% YoY), and the Operating Income margin improved to 4.45% from 4.12% a year earlier. Although the gross margin declined from the previous year to 22.5%, the lower SG&A ratio of 17.9% supported profitability. By segment, Asia Pacific posted significant growth in segment profit to ¥41.2B (+96.1%), while Staffing remained the core contributor to company-wide profit at ¥116.7B (+13.8%). Career, meanwhile, reported lower profit of ¥93.5B (-10.5%) despite maintaining a high margin of 24.4%, and BPO was essentially flat at ¥12.6B (-0.6%). Profit Before Tax was ¥186.4B (+22.1%), and Net Income attributable to owners of the parent was ¥121.9B (+14.3%), indicating higher revenue and earnings.

Segment Analysis

Staffing remained the core business, generating revenue of ¥1,559.7B and profit of ¥116.7B, while securing a profit margin of 7.5%. Asia Pacific recorded revenue of ¥1,454.4B (+26.0%) and profit of ¥41.2B (+96.1%), the highest growth and profit growth rates among all segments, with profitability improving alongside expansion in scale. Career maintained the highest profit margin at 24.4%, but both revenue and profit were below the previous year, indicating that the segment is in an adjustment phase. Technology improved profit to ¥12.4B (+42.8%) and its profit margin to 4.3%, while BPO posted revenue growth of 6.5% but essentially flat profit (-0.6%), making profitability improvement a key challenge. A contrast is evident among the segments between the high-growth, low-profitability Asia Pacific business and the stable, highly profitable Career business.

Key Financial Metrics

【Profitability】The Operating Income margin improved to 4.45% from 4.12% a year earlier, while the Net Income margin was 2.88%, broadly in line with the previous year. Although the gross margin declined from the previous year to 22.5%, this was offset by a decline in the SG&A ratio to 17.9%.【Cash Flow Quality】Operating Cash Flow (OCF) was ¥204.5B, approximately 1.68 times Net Income of ¥121.9B, indicating a high level of cash generation relative to earnings.【Investment Efficiency】ROE was 5.2%, and EBIT was ¥188.8B. In terms of asset efficiency, there appears to be room for improvement in the asset turnover ratio relative to total assets of ¥6,269.7B.【Financial Soundness】The Equity Ratio was 35.3%, broadly unchanged from 35.4% in the previous year. Cash and deposits were ¥826.4B, and the relationship between OCF and dividend payments indicates that short-term funding sustainability has been secured.

Cash Flow Analysis

OCF increased significantly by +48.7% YoY to ¥204.5B. Starting from Profit Before Tax of ¥186.4B and depreciation and amortization of ¥98.6B, the increase in operating liabilities of ¥66.0B contributed to cash inflows, while increases in contract assets of ¥32.5B and prepaid expenses were sources of cash outflows. Investing Cash Flow was -¥60.4B, reflecting ongoing investments including ¥19.0B for the acquisition of property, plant and equipment and ¥33.8B for the acquisition of intangible assets. Financing Cash Flow was -¥171.9B, with dividend payments of ¥133.1B, lease liability repayments of ¥54.6B, and repayments of long-term borrowings of ¥101.8B as the primary sources of cash outflows. Free Cash Flow was ¥144.1B, broadly covering dividend payments of ¥133.1B, although the headroom was limited. As a result, cash and cash equivalents were ¥826.4B, down ¥23.7B from the end of the previous fiscal period.

Earnings Quality

The current period’s earnings growth was primarily driven by the expansion of Operating Income, with limited impact from non-recurring factors. Outside operating income, financial income of ¥3.6B versus financial expenses of ¥8.0B resulted in a net amount of -¥4.4B, while other income of ¥2.6B and other expenses of ¥5.3B were both small in scale and had a limited impact on Profit Before Tax of ¥186.4B. Equity in earnings of affiliates of ¥2.1B also made a limited contribution to consolidated earnings. The gap between Profit Before Tax and Net Income was attributable to an effective tax rate of 32.3%, up from 27.8% in the previous year; the higher tax burden restrained Net Income growth (+14.3%) relative to Operating Income growth (+22.6%). OCF at approximately 1.68 times Net Income indicates that earnings are supported by cash flow, and earnings quality can be assessed as favorable. Comprehensive Income was ¥149.6B, exceeding Net Income of ¥121.9B (¥126.3B on a consolidated basis), primarily due to a ¥21.2B increase in foreign currency translation adjustments for foreign operations, reflecting the rise in the value of overseas subsidiaries’ assets resulting from yen depreciation.

Earnings Forecast and Guidance

Progress against the full-year plan was 25.5% for Revenue (¥4,240.2B/¥16,650.0B), 26.6% for Operating Income (¥188.8B/¥710.0B), and 27.4% for Net Income (¥121.9B attributable to owners of the parent/¥445.0B). All exceeded the simple seasonal benchmark of Q1=25%, indicating steady progress toward the full-year plan. As of the current quarter, no revisions have been made to the earnings forecast or dividend forecast.

Shareholder Returns

The company’s full-year dividend forecast is ¥13.00 per share. Based on the EPS forecast of ¥19.60, the Payout Ratio is approximately 66.3%. Dividend payments during the first quarter were ¥133.1B, up from ¥110.3B in the previous year, and were broadly covered by Free Cash Flow of ¥144.1B. Share repurchases were ¥0.0B in the current period, making dividends the central framework for shareholder returns.

Risk Factors

1. Working capital intensity: Contract assets increased to ¥357.0B at the end of the current period from ¥317.5B at the end of the previous year, while trade and other receivables, including operating receivables, remained high at ¥2,052.1B. The ratio of trade and other receivables to revenue reached approximately 48.4%, making it a factor affecting funding stability.

2. Concentration in goodwill and intangible assets: Goodwill was ¥953.7B, accounting for approximately 39.6% of net assets of ¥2,408.8B. This reflects the growth strategy pursued through M&A, and the results of regular impairment tests should be closely monitored with respect to future impairment risk.

3. Variability in performance among segments: While the Career segment maintained a high margin of 24.4%, both revenue and profit were below the previous year, and BPO profit was also essentially flat. Company-wide earnings growth is highly dependent on Asia Pacific and Staffing, requiring monitoring of the impact of changes in segment mix on overall profitability.

Industry Benchmark (Reference; Compiled by the Company)

Industry Benchmark (it_telecom)

Profitability and Returns

Both the Operating Income margin and Net Income margin were below the industry median, placing profitability somewhat toward the lower end of the industry.

Growth and Capital Efficiency

The Revenue growth rate exceeded the industry median, indicating a relatively high level of growth within the industry.

※Source: Compiled by the Company

Key Points from the Financial Results

1. In addition to higher revenue and earnings, an increase in the Operating Income margin from 4.12% to 4.45%, accompanied by an improvement in the SG&A ratio (-161bp equivalent), was confirmed. This indicates a structural shift toward growth accompanied by cost efficiency improvements.

2. OCF reached approximately 1.68 times Net Income, indicating that earnings growth was supported by cash generation despite the burden of working capital, including increases in contract assets and trade and other receivables.

3. By segment, the contrasting trends of high growth and profit growth in Asia Pacific and declining revenue and profit in Career continued. Changes in segment mix are structurally positioned to influence the future trajectory of company-wide profitability.

Theoretical Share Price (Reference Value)

This is a mechanically calculated reference range based solely on publicly disclosed data using a residual income model (Ohlson-type model with an explicit 5-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.

Sensitivity: ¥128–¥135 at Cost of Equity ±1%, and ¥131–¥133 at ω±0.1.

Notes:

• Goodwill represents a high proportion of net assets, and the assumptions would change substantially if impairment were recognized.
• Net assets as of the end of the quarter are used; there is a timing difference relative to the full-year forecast.

(Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-07 / This figure does not predict or guarantee the future share price.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility, after consulting a professional as necessary.

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