| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥103.8B | ¥98.6B | +5.2% |
| Operating Income | ¥29.7B | ¥28.4B | +4.6% |
| Ordinary Income | ¥29.9B | ¥28.5B | +4.9% |
| Net Income | ¥20.6B | ¥18.8B | +9.4% |
| ROE | 10.2% | 9.7% | - |
The Company concluded the quarter with higher revenue and earnings, marking a strong start with profit progress ahead of the full-year plan. Revenue was ¥103.8B (¥98.6B in the same period of the previous year, YoY +5.2%), Operating Income was ¥29.7B (+4.6%), Ordinary Income was ¥29.9B (+4.9%), and Net Income attributable to owners of the parent was ¥20.6B (+9.4%). Revenue growth was driven by the strong growth of Recruiting and Overseas. On the earnings front, an improvement in the gross profit margin (74.6%, +1.4pt) was almost offset by an increase in the SG&A ratio (46.0%, +1.6pt), resulting in an Operating Income margin of 28.6% (28.8% in the previous year), which was essentially flat. Net Income growth exceeded Ordinary Income growth mainly because temporary losses, including impairment losses, recognized in the previous year were largely eliminated in the current period.
【Revenue】Revenue was ¥103.8B, representing a 5.2% year-on-year increase. By segment, Recruiting (+23.9%) and Overseas (+21.5%) continued to achieve strong growth, while the core HumanResource segment, accounting for approximately 72% of total revenue, expanded steadily by +2.5%. Meanwhile, HRPlatform recorded an 8.7% decline in revenue, and LocalInformationService posted only a 4.5% increase, indicating variation in growth rates across businesses.
【Profit and Loss】Operating Income was ¥29.7B (+4.6%). Although the gross profit margin improved by +1.4pt to 74.6%, the SG&A ratio rose by +1.6pt to 46.0%, compressing earnings growth. SG&A expenses increased by +9.0%, outpacing revenue growth of +5.2%, suggesting that growth investments and higher personnel expenses may be occurring ahead of revenue expansion. Ordinary Income was ¥29.9B (+4.9%), with only a minor impact from non-operating income and expenses. Net Income was ¥20.6B (+9.4%), exceeding Ordinary Income growth. This was primarily due to the reversal of the prior-year impact of extraordinary losses totaling ¥0.94B, including an impairment loss of ¥0.69B related to the LocalInformationService business, which was largely eliminated in the current period (¥0.02B). Accordingly, the Company achieved higher revenue and earnings, although the acceleration in Net Income included a temporary factor.
Segment revenue and profit, based on segment totals and with approximate composition ratios, were as follows.
【Profitability】The Operating Income margin was 28.6%, down slightly by -0.2pt from 28.8% in the previous year, as the improvement in the gross profit margin to 74.6% (+1.4pt) was offset by an increase in the SG&A ratio to 46.0% (+1.6pt). The Net Income margin remained high at 19.8%. 【Cash Flow Quality】Trade receivables, including notes and accounts receivable, were ¥36.3B, down -6.3% from ¥38.7B in the previous year, with no deterioration in collection performance. 【Investment Efficiency】ROE was 10.2%. EPS increased to ¥36.77 (¥33.50 in the previous year, +9.8%), while BPS increased to ¥361.88 (¥345.24 in the previous year, +4.8%). 【Financial Soundness】The Equity Ratio was 76.5%, up +1.8pt from 74.7% in the previous year. Against cash and deposits of ¥132.2B, interest-bearing debt, consisting of short-term borrowings, was limited to ¥1.0B, indicating that the Company maintains a conservative financial structure that is effectively debt-free.
Because cash flow statement data has not been disclosed, funding trends are analyzed based on changes in the balance sheet. Cash and deposits were ¥132.2B, nearly flat at -0.5% from ¥133.2B in the same period of the previous year, and liquidity on hand remained high. Retained earnings increased by ¥8.7B from ¥184.3B to ¥192.9B, indicating steady internal fund accumulation from the core business. Meanwhile, treasury stock increased by ¥4.0B from ¥2.7B to ¥6.7B, suggesting that funds were allocated to share repurchases. Accounts payable increased by +35.2% from ¥10.7B to ¥14.4B, indicating an increase in working capital associated with higher outsourcing, advertising, and other expenses. However, short-term borrowings remained at ¥1.0B, limiting dependence on interest-bearing debt. Cash generation through retained earnings and allocation of funds to shareholder returns, including share repurchases, proceeded in parallel, while cash levels remained stable.
The majority of profit was generated by the core business. Non-operating income was ¥0.3B, equivalent to 0.3% of revenue, and non-operating expenses were ¥0.1B; therefore, their impact on Ordinary Income was minimal. The ¥9.3B difference between Ordinary Income of ¥29.9B and Net Income of ¥20.6B was attributable to income taxes and other taxes of ¥9.3B, representing an effective tax rate of 31.2%. This is a structural tax burden rather than an unusual factor. Extraordinary income and losses amounted to only a ¥0.02B loss in the current period, whereas the same period of the previous year included extraordinary losses of ¥0.94B, including a ¥0.69B impairment loss related to the LocalInformationService business. The elimination of this temporary burden pushed Net Income growth of +9.4% above Ordinary Income growth of +4.9%. Comprehensive Income was ¥23.2B, up +16.5% year on year and exceeding Net Income of ¥20.6B. This was primarily due to a ¥2.6B increase in valuation differences on investment securities, reflecting fluctuations in valuation gains and losses separately from the earnings power of the core business.
The Q1 progress rates against the full-year plan were 29.8% for revenue, 72.3% for Operating Income, 70.9% for Ordinary Income, and 73.3% for Net Income, indicating substantial front-loading in profit items. The full-year outlook itself calls for declines of -10.3% in Operating Income and -10.0% in Ordinary Income, in contrast to the substantial earnings growth achieved in Q1. This difference suggests the possibility of the reversal of temporary losses recorded in the same period of the previous year, conservatism in the initial plan, or the front-loading of investments and costs into the second half of the fiscal year. No revisions were made to the earnings forecast or dividend forecast during the quarter.
The Company’s forecast annual dividend is ¥38.00 per share, implying a Payout Ratio of approximately 75.6% based on forecast EPS of ¥50.27. A 3-for-1 stock split of common shares was conducted effective December 1, 2025, and therefore the prior-period actual dividend of ¥50 cannot be compared on a straightforward basis. Meanwhile, treasury stock increased by ¥4.0B from ¥2.7B in the same period of the previous year to ¥6.7B, indicating that shareholder returns through share repurchases are progressing in addition to dividends. Given the financial base of cash on hand of ¥132.2B and interest-bearing debt of ¥1.0B, the Company has substantial financial capacity to sustain the current level of shareholder returns.
Segment concentration risk: The core HumanResource segment accounts for approximately 72% of total revenue, creating a structure in which earnings are susceptible to labor supply and demand conditions and trends in the recruitment market.
SG&A expense rigidity: SG&A expenses increased by +9.0% year on year, expanding faster than the +5.2% revenue growth rate. This explains why the Operating Income margin declined by -0.2pt despite a +1.4pt improvement in the gross profit margin. If growth investments have been recognized ahead of revenue, including in personnel expenses, they could pressure profit margins during periods of slowing revenue growth.
Variation within the portfolio: HRPlatform recorded an 8.7% decline in revenue, while LocalInformationService posted a 17.9% decline in Operating Income. The decline in earnings despite the absence of the prior-year impairment loss suggests a structural deterioration in profitability. Growth in the core business was also limited to +2.5%, and the degree of diversification among growth segments will affect earnings stability going forward.
Profitability and Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 28.6% | 8.1% (2.3%–15.9%) | +20.6pt |
| Net Income Margin | 19.8% | 5.9% (1.6%–10.7%) | +13.9pt |
The profitability metrics substantially exceed the industry median, placing the Company among the top performers in the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | 5.2% | 9.3% (0.4%–16.9%) | -4.1pt |
The revenue growth rate is below the industry median, indicating that the pace of growth is relatively moderate compared with the Company’s high profitability.
※Source: Compiled by the Company
While more than 70% of the full-year profit plan had been achieved as of Q1, the full-year forecast calls for a -10.3% decline in Operating Income, suggesting the front-loading of investments and costs in the second half of the fiscal year or conservatism in the guidance.
Although the gross profit margin improved by +1.4pt, the SG&A ratio increased by +1.6pt, resulting in a slight decline in the Operating Income margin. The development of cost-effectiveness, or operating leverage, during the growth investment phase will determine future profitability trends.
The reason Net Income growth of +9.4% exceeded Ordinary Income growth of +4.9% was the elimination of temporary losses, including impairment losses, recorded in the previous year. When assessing recurring earnings growth, the Ordinary Income growth rate provides a more representative measure of underlying performance.
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 stock price or a recommendation of any specific investment action.
| Scenario | Theoretical Stock Price |
|---|---|
| bear | ¥400 |
| base | ¥417 |
| bull | ¥423 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share (BPS) | ¥362 |
| Adjusted Forecast EPS | ¥55.3 |
| Cost of Equity r | 9.65% (10-year government bond 2.65% + equity risk premium 6.00% + size premium 1.00%) |
| Residual Income Persistence Factor ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 75.6% |
| Forecast EPS Confidence Adjustment | ×1.100 (based on progress ahead of the full-year forecast) |
| Implied PBR / PER | 1.15x / 7.5x |
Sensitivity: ¥407–¥429 at ±1% for the cost of equity, and ¥416–¥419 at ±0.1 for ω.
Notes:
(Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-06 / This figure does not predict or guarantee the future stock price)
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 stock. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own discretion and responsibility, with consultation with a professional adviser as necessary.
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These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.