Spot-work GMV up 18.8% with growth intact; a 1Q that confirms 24.4% core operating margin and the groundwork for accelerating 2H growth

Key Positives From The 1Q Results

Revenue of JPY 10,443M (+24.8% YoY) and operating income of JPY 1,937M (+5.8% YoY) delivered both top-line and earnings growth. In the core spot-work business, GMV reached JPY 33,687M (+18.8%) with the average take rate held at 28.7%, confirming that the growth engine driven by active account (AA) expansion remains intact. Despite weather and geopolitical headwinds, management explicitly guided that both revenue and operating income will land within the full-year guidance range.

• The prior-year comparison column in the earnings release covers the November–January period due to the fiscal year-end change, so the comparison period differs. YoY figures in this report use the prior-year period disclosed by the company in its presentation materials (FY25/10 3Q, May–July 2025)
• Spot-work operating income of JPY 2,355M (+14.8% YoY) with a 24.4% margin, essentially flat versus 24.7% a year earlier. Core profitability was maintained even while strategic investment continued
• Nursing care & welfare sustained high growth with GMV +59.2% and AA count +51.0%. GMV per AA also turned positive at +5.4%, showing the large-account focus strategy is working on unit economics as well
• Food service spot-work revenue growth turned positive ahead of plan (1Q +4.0%), aided by solution proposals targeted at management teams and cross-selling into contract catering operations
• Equity ratio improved to 46.6% (42.4% at end-FY), with interest-bearing debt reduced to JPY 12,990M, leaving net cash of JPY 2,990M (our estimate). Balance sheet headroom is secured

Key Concerns From The 1Q Results

Macro pressures and company-specific factors overlapped in logistics and retail, slowing company-wide GMV growth from +24.9% in the prior quarter to +18.8%. In addition, start-up costs in non-spot-work businesses and a shift in cost structure pushed the company-wide operating margin down to 18.6% (-3.3pt YoY).

• Company-wide gross margin of 89.7% (-4.4pt YoY). The COGS ratio rose 4.4pt on the consolidation of Timee Solutions and increased Field Manager headcount
• In logistics, GMV per AA rose just +1.4%. A cool summer, Middle East developments, and lower handling volumes at a specific client (and its subcontractors) directly reduced usage; reducing this dependency remains a key task
• Retail AA count growth of +11.3% was softer than planned. AA additions could not offset the cool summer and the reversal of last year's stockpiled-rice demand, which shrank outsourced labour budgets
• Non-spot-work operating loss widened to JPY -405M from JPY -219M a year earlier. Full-year plan also embeds a JPY -1,803M loss
• Operating income progress of 20.9% trails the 25.1% achieved in the year-earlier period. The profit plan is 2H-weighted, so the timing of returns on 1H investment needs monitoring

Focus Areas / Items To Monitor Going Forward

• Timing of the roll-off of the logistics client-specific drag, and re-acceleration of GMV per AA through penetration of untapped large clients. The company discloses that GMV at FM-staffed sites is more than 2x higher, so we want to see the scaling effect of the roughly 100-person FM organisation
• Recovery in retail AA count. The key question is how far new-site acquisition among spot-work non-adopters—driven by cross-selling of the long-term part-time hiring support plan—can correct a resource allocation that had skewed toward BPR proposals
• Utilisation improvement in nursing care & welfare. How much will client referrals via Benesse Careos and industry-specific features (selectable time slots, shift schedules, on-arrival training) contribute to a reversal in growth rates in 2H

Key Financial Highlights

(YoY comparisons use the company-disclosed prior-year period = FY25/10 3Q, May–July 2025. The prior-year column in the earnings release covers November–January and thus a different period)

Recurring profit of JPY 1,888M is after JPY 55M of non-operating expenses (interest expense JPY 43M, fees paid JPY 10M). COGS of JPY 1,079M equated to 10.3% of revenue (+4.4pt YoY), driven up by the Timee Solutions consolidation and Field Manager costs. HR costs declined 1.2pt while outsourcing fees were contained at +0.9pt.

Performance By Business Segment

Under the reporting segments in the earnings release, the Timee business posted external customer revenue of JPY 9,909M and segment profit of JPY 1,981M, while Other (Timee Solutions business) recorded JPY 533M and JPY -44M. The table below follows the service-line breakdown disclosed by the company in its presentation materials, which is comparable with the prior-year period (FY25/10 3Q).

Segment Performance Table

Progress Versus Full-Year Guidance

Against the mid-point of the full-year range, revenue is 21.7% and operating income 20.9% complete. Revenue progress is in line with 21.5% in 1Q last year and 21.3% two years ago, but operating income trails last year's 25.1%. Management explains that strategic investment is concentrated in 1H and expects both revenue and operating income to land within the range on the back of 2H profit expansion.

(Full-year plan is the mid-point of the company-disclosed range of JPY 47,613M–48,823M etc. Revenue and operating income progress rates are company-disclosed; recurring profit and net income progress rates are our estimates. The company also discloses progress against both ends of the range: revenue 21.4%–21.9%, operating income 19.9%–22.0%)

• The prior quarter (February–April) is described by the company as a seasonally slow period, with utilization tending to decline QoQ
• Company plans assume YoY growth in spot-work revenue accelerates in 2H (November–April), with the absolute YoY increase also expanding

Changes To Guidance

Consolidated guidance for FY04/27 is unchanged from the 11 June 2026 release. The range format is maintained: full-year revenue of JPY 47,613M–48,823M, operating income of JPY 8,821M–9,746M, and net income attributable to owners of parent company of JPY 6,002M–6,927M. 1H cumulative guidance is revenue of JPY 22,056M–22,560M and operating income of JPY 3,997M–4,388M.

Commentary On Shareholder Returns

The FY04/27 dividend forecast is JPY 0.00 (both interim and year-end), unchanged from the previous forecast. Treasury shares rose to 1,007,203 at quarter-end from 824,003 at end-FY, with the treasury stock balance widening from JPY -1,051M to JPY -1,275M. Under its capital allocation policy, the company prioritises growth investment (M&A, equity investments, etc.) first, and states that for undeployed cash it prefers share buybacks for shareholder returns given their flexibility.

Financial Position

The equity ratio improved to 46.6% on short-term debt reduction and retained earnings accumulation. Cash on hand exceeds interest-bearing debt, keeping the company in a net cash position.

Key Figures

(No consolidated cash flow statement is prepared for 1Q, so cash and deposits are shown instead)

Leverage Metrics

Disclosures Released Alongside The Earnings Announcement

Major Announcements During The Quarter

Large-Shareholding Filings / Material Proposals Over The Past Year

• Trivista Capital: 0.00%→5.34% (2026/08/07) – pure investment under discretionary investment management agreements
• Fidelity Management & Research Company LLC: 0.00%→5.74% (2026/06/09) – holdings related to the group's asset management and administration functions
• Fidelity Management & Research Company LLC: 5.74%→5.64%, 5.64%→3.05% (2026/06/23) – same as above; stake reduced
• FMR LLC: 0.00%→5.74% (2026/02/20), 5.74%→5.64% (2026/03/06), 5.64%→3.05% (2026/03/23) – holdings for managing client assets under trust deeds and contracts
• FMR LLC: 7.09%→3.97% (2026/01/09) – same as above; position reduced
• Recolle (joint holder: Ryo Ogawa): 28.35%→28.33% (2026/02/10) – stable shareholder position held via the CEO's asset management company