Food service spot-work returns to positive growth; long-term part-time hiring support plan positioned as a second earnings pillar as the company shifts from defense to offense

Summary

FY27/4 1Q delivered revenue of JPY 10,443M (+24.8%) and operating income of JPY 1,937M (+5.8%), with both top line and profit up. On the call, management reported that food service spot-work revenue growth — investors' single biggest concern — swung from negative since FY25/10 2Q to +4.0%, and that August also remained positive. Management attributed the turnaround to a shift in sales approach: pitching directly to management as a revenue-growth solution rather than simply as labor sourcing, and using store-level sales data to visualize lost opportunity and run A/B testing. In logistics, a cool summer, Middle East geopolitics, and volume declines at a specific large account combined to drag growth lower in July, but the drivers have been identified and full-year results are still expected to land within the guidance range.

Key Points (Results Highlights and Growth Actions)

• Management Strategy And Market View
  • This fiscal year's theme is a shift from defense to offense, advancing multiple initiatives in parallel with the aim of clarifying medium-term targets.
  • The slowdown in food service was traced to usage restraint driven by management/head office; the pivot from a pure labor-sourcing pitch to a revenue-growth solution reversed the trend.
  • The long-term part-time hiring support plan is positioned as a second earnings pillar, extending from spot work into the much larger long-term job listings market.
  • At the September 10, 2026 board meeting, the company resolved to prepare an application to transfer to the Prime Market, signaling its commitment as an operator of essential labor infrastructure.
• Current Business Progress And Drivers
  • In food service, Timee now receives stores' monthly sales data to visualize daily plan-vs-actual and lost opportunity, shifting proposals toward comparing sales with and without additional staffing.
  • Contract operations in institutional catering and cafeterias grew; management views the combination of a stool-test screening scheme and maintenance of the Utilization Rate as a difficult-to-replicate barrier to entry.
  • The logistics slowdown reflects reduced handling of crude oil/naphtha-derived goods and import delays due to Middle East geopolitics, plus volume declines at a specific large account that allowed customers to cope with existing headcount.
  • In retail, the cool summer and a reaction to prior-year stockpiled rice demand shrank outsourced labor budgets, while resources skewed toward BPR and other consulting proposals — growth in active accounts was insufficient to offset this.
• Key Strategic Initiatives And Inflection Points
  • The long-term part-time hiring support plan launched in full on August 1, priced from JPY 20,000 per site per month. 90% of contracts are on the Basic plan (from JPY 40,000/month), lifting the average monthly fee to near JPY 40,000.
  • Ahead of full rollout, roughly one year of PoC was run, comparing cost per hire against job-listing media on a like-for-like basis. Full adoption is accelerating at companies where Timee's advantage was confirmed.
  • Targeting is concentrated on food service and retail. Logistics rollout is deliberately lagged pending design of a dedicated pricing plan.
  • Deeper penetration in logistics is supported by roughly 100 Field Managers; sites using the Smart Group function surpassed 2,000, generating case studies of switching from staffing agencies.
  • In nursing care and welfare, consecutive releases of selectable time slots, shift schedules, and on-arrival training strengthened the Utilization Rate and proposition value.

Outlook and Strategy

• Full-year guidance is revenue of JPY 47,613–48,823M and operating income of JPY 8,821–9,746M. Both are expected to land within the range.
• Progress against the midpoint stands at 21.7% for revenue and 20.9% for operating income. Operating income progress trails last year (25.1%), but management noted that costs were concentrated in 2Q last year and that on a first-half basis the gap is within the company's control.
• The base scenario assumes food service turns YoY positive in 4Q, and that nursing care/welfare accelerates on strategic investment and the Benesse Careos partnership. Food service has already achieved this ahead of plan.
• Management sees the long-term part-time hiring support plan potentially reaching a business scale approaching JPY 10B in under five years, and will keep investing via an organization reporting directly to the CEO.
• The plan also offers an algorithm that prioritizes matching with workers open to new-graduate or full-time roles; willingness to pay at the JPY 100,000/month level has already been confirmed, leaving upsell headroom.
• Capital allocation prioritizes growth investment such as M&A, with share buybacks the preferred use of unspent cash.

Positive Factors

• Food service spot-work revenue turned positive at +4.0% YoY, with positive growth continuing in August.
• Nursing care/welfare GMV rose +59.2% and GMV per active account turned positive at +5.4%, tracking ahead of the base-scenario plan.
• GMV at sites with Field Managers assigned more than doubled YoY, with the effect sustained even after increasing headcount.
• Utilization Rate of 86.3% (+0.4pt) and an average take rate of 28.7% keep core profitability metrics at high levels.
• HR costs as a percentage of revenue fell 1.2pt on AI adoption and operational efficiency, with the savings reallocated to offensive spending.
• The long-term part-time plan is not cannibalizing spot work; it is instead opening new stores that had not adopted spot work and reactivating dormant accounts, while capturing a new domain of weekday demand during slow periods.

Concerns and Risks

• The timing of any resolution to Middle East geopolitics is unclear, and the impact on logistics volumes may persist, particularly among SMEs downstream in the supply chain.
• Volume declines at a specific logistics account (and its subcontractors) translate directly into lower usage; reducing this dependence requires opening up untapped large accounts.
• Some major logistics players are hesitant to switch from long-term staffing agencies on productivity concerns, and explaining day-labor regulations, tax, and social insurance treatment also takes time.
• Retail active account growth is softer than expected, and the drag on growth will persist until one-off factors such as weather roll off.
• Non-spot-work posted an operating loss of JPY 405M (vs. JPY 219M loss a year earlier), with a full-year loss of JPY 1,803M planned.
• Gross profit margin fell 4.4pt to 89.7%, as the consolidation of Timee Solutions changes the group's margin structure.

Performance Highlights

FY27/4 1Q: revenue JPY 10,443M (+24.8%), gross profit JPY 9,363M (+19.0%), operating income JPY 1,937M (+5.8%), and Net Income Attributable to Owners of Parent Company JPY 1,273M (+1.3%). Operating income margin was 18.6%, down 3.3pt, but this reflects strategic investment continuing through 1H and the launch of non-spot-work businesses, and is in line with plan. Spot work is running slightly below plan on macro and account-specific factors, while non-spot-work is ahead of plan.

Segment Results

• GMV: JPY 33,687M (+18.8% YoY)
• Average Take Rate: 28.7%
• Active Accounts: 242 thousand sites (+12.8% YoY)
• GMV per Active Account: JPY 138 thousand (+5.3% YoY)
• Utilization Rate: 86.3% (+0.4pt YoY)
• GMV by Industry: Logistics JPY 15,127M (+22.0%), Retail JPY 8,865M (+18.3%), Food Service JPY 4,910M (+4.8%), Nursing Care/Welfare JPY 1,665M (+59.2%)
• Positions Posted: +13% YoY
• Registered Workers: 14.7 million (+23% YoY)
• Registered Client Sites: 488 thousand (+24% YoY)

Q&A List

• Q: On the industry breakdown, retail appears to be a one-off weather effect in June, but I'm concerned about logistics — Middle East geopolitics and volume declines at certain large accounts. Could you explain, to the extent you can, exactly why volumes declined?
  A: We cannot predict when the Middle East situation will be resolved, but a certain amount of time has already passed and it is not something that will continue for one, two, or three years, so we view it as a macro factor. Specifically, crude oil prices rose due to the Middle East situation, reducing handling of petroleum-derived goods including naphtha, and imports from overseas have been delayed — both of which have reduced logistics volumes and created some impact. On the volume decline at a major account, we cannot name the company, but as its monthly handled volumes declined, it was able to manage to a degree with existing internal headcount rather than using spot work, so use of Timee declined somewhat.
• Q: You expect improvement going forward — what specifically do you have in mind?
  A: Rather than simply waiting, our approach is that penetration at large customers is not 100%, so we are developing sites within those accounts where Timee has not yet been introduced. We generate revenue there, and when handled volumes partially recover, Timee usage recovers as well. So we are covering both sides — working the areas we have not yet addressed, and being ready for immediate use when the depressed areas come back. In addition, in logistics we have not yet penetrated all of the large customers; rather than concentrating on one account, there are many large players we have not yet approached, so we are working through them sequentially to diversify the portfolio and build a structure for balanced revenue growth.
• Q: Is the volume decline at that large account also fundamentally due to the Middle East situation?
  A: Yes. There are other factors as well, but that is one of them.
• Q: The long-term part-time hiring plan takes share from job-listing media, so as you explained previously, is it correct that there is no cannibalization with spot work?
  A: As noted in the third line on the right of the slide, it opens up new stores that had not adopted spot work and were using only existing job-listing media, and it also accelerates spot-work usage. This is a positive surprise — we had expected cannibalization, but far from it, stores that had never used Timee say they would use it under this plan, leading to reactivation of dormant accounts and new adoption. With Timee, demand spikes when customers flood in on Fridays, Saturdays, and Sundays, and that is when they want to use us; they don't want to use us much Monday through Thursday, and that was job-listing media's territory. It was fundamentally a somewhat different market. The fact that we can now enter this Monday-through-Thursday market is very significant.
• Q: On the long-term part-time support plan, are current contracts concentrated in food service and retail by industry? Please share any industry-specific characteristics or trends.
  A: We are focusing on food service and retail, where demand volatility is greater and the fit is better. For logistics, we need to change the pricing plan and run experiments to confirm the economics still work, so we have built in a time lag. Right now we are listing and approaching food service and retail companies, particularly those that use job-listing media heavily.
• Q: On large logistics customers, I'd like to understand the argument that there is still room to open up new large accounts. Something clearly resonates with the customers you have already won; are there customers where even that message has not landed? Why do untapped large accounts remain, and how do you analyze the situation?
  A: The main issue is companies that have long relied on long-term staffing agencies. Those relationships have built up gradually, and while switching to Timee raises costs, management worries productivity will fall, so they struggle to make the decision — in some cases we cannot break through even with active proposals. Beyond that, because spot work is a new service, a small number of companies raise legal questions around tax and social insurance, asking whether they can use it when their internal rules do not even include day-labor provisions. We explain carefully — the value of usage, how much cost benefit Timee delivers, and that these risks are minor and adoption is worthwhile.
• Q: Given that, is it fair to take the optimistic view that presenting actual case studies from logistics operators already using Timee will largely resolve the issue over time?
  A: Yes. There is no question that adoption is possible. And we are building a body of case studies showing that even sites that relied heavily on long-term staffing agencies achieved this much cost reduction after switching to Timee with no drop in quality. As those examples — this company, this case — gradually resonate, customers decide to give it a try; we have seen large enterprises newly expanding usage recently as well, so with time we are confident we can break through.
• Q: On long-term part-time hiring, you mentioned current usage at roughly JPY 40,000 per month. What monthly fee level do you actually envisage, where is the ceiling in the pricing structure, and what explains moving from a JPY 20,000 starting point to JPY 40,000 today?
  A: We offer Light Plan Approach, Light Plan Connect, and Basic, and we are primarily selling the Basic plan. Basic starts at JPY 40,000, and about 90% of customers are now on Basic. The difference is that with Light Plan Approach you can reach workers interested in part-time employment, but the system cannot collect post-shift surveys on whether they were actually interested. With Basic, when you post on Timee, workers looking for part-time work are matched preferentially, and you can also confirm their level of interest in joining that store, then follow up using AI messaging to invite them to work there — a mechanism designed to raise conversion rates. So we generally recommend Basic. Companies choosing Light are those where the store manager has the bandwidth, understands the process well, is willing to do the work, and prefers the cheaper option. Fundamentally we want to sell plans that require less operational effort.
• Q: Over the medium to long term, should we expect upsell in monthly fees through the addition of a premium tier above this? Or, as the site base expands and the customer mix broadens, will there be some dilution such that we should not look for much upside in monthly fees?
  A: We believe there is still substantial room to grow. For example, we are currently talking about part-time work, but by offering an algorithm that preferentially matches workers open to new-graduate or full-time roles — in labor-intensive industries where full-time hiring is very difficult — we have heard customers say they would pay JPY 100,000 per month if it enabled such hires. So we see plenty of room to grow.

Appendix: New Domain Initiatives

• Concluded a co-creation partnership with ZEALS in physical AI. The company is exploring spot-work designs for data collection work and deployment/operations support, positioning itself to handle deployment, operations, and maintenance rather than robot manufacturing.
• Leveraging its accumulated data on which worksites face labor shortages and what tasks exist, the company envisions driving DX in labor-intensive industries as an R&D initiative.