Members Co., Ltd.

Business Details

A single segment in which digital creators (DCs) form dedicated teams for client companies to provide on-site DX support across four areas: UI/UX design, digital marketing, product development, data utilization, and PMO. Operating under the DGT (Digital Growth Team) model, which functions as a client's "virtual employee®," the company embeds itself with clients to support their internalization process, and delivers high-value-added services through 21 specialized companies. The company is also building a business foundation in decarbonization DX and circular DX.

Recent Overview

Operating profit rebounded sharply to 3.2 times the prior period level, driven by accelerated shift toward DX and improved utilization rates

In FY2026 (ending March 2026), revenue was ¥24,424 million (up 9.4% year on year) and operating profit was ¥1,600 million (up 224.6% year on year), representing a substantial increase in profit. The main drivers were an improvement in the utilization rate to 83.1% (up 6.6 points year on year) and an increase in gross profit margin to 26.4% (up 5.5 points year on year). Value-added revenue growth in the DX field was up 32.6% year on year, and value-added revenue from specialized companies reached ¥10,959 million (up 54.7% year on year). The company also made agile investments, including the consolidation of a UI/UX design company as a subsidiary (increasing goodwill by ¥135 million) and the launch of AI-driven development co-support. On the other hand, the number of DCs decreased by 171 from the prior period-end to 2,456, and the turnover rate rose to 12.1% (up 1.0 point year on year), leaving personnel retention as a remaining challenge. For FY2027 (ending March 2027), the company forecasts revenue of ¥26,866 million (up 10.0% year on year) and operating profit of ¥2,500 million (up 56.2% year on year), aiming to achieve 15% value-added revenue growth and a 10% operating profit margin.

Key Products

Growth Drivers

• Robust expansion of the domestic DX market (projected to grow from approximately ¥5,572.9 billion in fiscal 2024 to approximately ¥10,275.7 billion in fiscal 2030) and sustained growth in external demand driven by the rapid expansion of the AI-related market
• Increasing demand for external specialized support services against the backdrop of a shortage of DX promotion personnel (more than 80% of Japanese companies recognize a quantitative shortage)
• Accelerating shift toward high-value-added positions and rising per-person revenue (up 6.5% year on year) driven by achieving a DX talent ratio of 72.0% and 1,482 PMO personnel
• Strengthened cross-selling and deeper client engagement through 21 specialized companies (value-added revenue per client among the top 50 DGT clients reaching ¥75.44 million)
• Expansion of human capital through increased new graduate hiring (244 hires scheduled for April 2026) and strengthened mid-career hiring (143 hires, up 54 year on year)
• Establishment of a new growth pillar through high growth in the decarbonization DX and circular DX business (value-added revenue up 48.5% year on year)
• Enhanced service sophistication and strengthened competitive advantage through the launch of AI-driven development co-support and expansion of AI-related services
• Remaining room for utilization rate improvement (DC utilization rate of 85.0% excluding first- and second-year new graduates) and improved profitability through the early workforce development program (SINCA90)

Risks

• Risk of increased costs for personnel retention and delayed recovery of recruitment and training investment due to continued rise in turnover rate to 12.1% (up 1.0 point year on year)
• The number of DCs decreased by 171 from the prior period-end to 2,456, making the balance between recruitment expansion and workforce optimization a challenge
• Risk of substitution or obsolescence of core business models such as existing large-scale web operations due to rapid advances in AI technology, including generative AI
• Temporary impact on revenue and utilization rates during the planned withdrawal from low-priced, low-growth projects as the company accelerates its shift toward the DX field
• Client company NPS® fell short of the target at -4.8pt year on year (target: +2pt year on year), making it a challenge to balance customer satisfaction with transaction expansion
• The number of client companies with annual revenue of ¥100 million or more remained flat at 55, indicating a risk that expansion of the large-client base may be stalling
• High sensitivity to economic fluctuations and reductions in clients' digital investment due to concentration in a single segment and domestic market
• Risk of impairment of goodwill (¥251 million) arising from M&A and increased costs of subsidiary integration and management
• Risk of delayed implementation of the training program (SINCA90) aimed at achieving a DX talent ratio of 90% and a utilization rate of 85% (targets for FY2027, ending March 2027)
• Risk of advertiser credit exposure and disputes arising from unwritten transactions stemming from advertising industry trade practices