Pasona Group Inc.

Business Details

BPO Solutions (Outsourcing/Contracting) provides outsourced operations such as general affairs, accounting, HR/labor administration, payroll, and contact center operations, along with high value-added services such as advisory consulting by professional talent (ProShare) and Wellness Cloud, which promotes corporate health management. Expert Solutions (Staffing) dispatches personnel across a wide range of job types and generations, from clerical staff to engineers and sales personnel, to client companies. Together, these two services account for approximately 87% of consolidated net sales, forming the Group's core revenue base. Key subsidiaries include Bewith, Inc. and Pasona Inc., among others.

Recent Overview

BPO large contracts peaked out, but gross margin improvement drove higher profit; staffing saw slight revenue growth from fee revisions.

In FY2026 (ending May 2026), net sales in BPO Solutions declined (¥130,459 million) due to the peaking out and completion of large-scale public sector outsourcing contracts, but gross profit margin improved 1.4 percentage points year on year to 22.7%, driven by ProShare expansion and improved contract conclusion rates in HR and technical support areas. In Expert Solutions, although the number of new temporary staff registrations increased by double digits year on year, the number of active staff remained roughly flat due to a decline in the contract conclusion rate; net sales rose slightly (¥135,751 million) due to staffing fee unit price revisions. Although SG&A expenses expanded due to increased IT-related costs and personnel expenses, this was absorbed by the increase in gross profit, and segment operating income rose year on year to ¥9,990 million. In addition, in May 2026 Bewith, Inc. acquired an 85% equity stake in Radiant Communication Sdn. Bhd. of Malaysia for ¥1,373 million, accelerating global BPO expansion.

Key Products

Growth Drivers

• Continued solid demand for BPO services underpinned by corporate DX promotion and increasingly sophisticated management challenges
• Continued expansion of ProShare and improved gross margin from higher contract conclusion rates in HR support and technical support areas
• Enhanced value-added of specialized BPO offerings through the launch of new services such as Wellness Cloud
• Business expansion through the establishment of a specialized subsidiary supporting corporate DX initiatives and system development
• Increase in per-unit sales price through staffing fee unit price revisions accompanying improved treatment of temporary staff
• Increase in new temporary staff registrations (up double digits year on year) through use of AI tools, and faster time from registration to job placement (planned for next fiscal year)
• Global expansion of Omnia LINK through Bewith, Inc.'s acquisition of Radiant Communication in Malaysia

Risks

• Risk of continued revenue decline from the peaking out and completion of large-scale BPO outsourcing contracts, mainly in the public sector
• Risk of sluggish sales growth due to declining contract conclusion rates for temporary staff (e.g., rising hiring requirements at client companies)
• Risk of increased personnel costs from rising employee wages and retirement benefit expenses pushing up SG&A expenses and pressuring profit
• Risk of increased IT-related costs from fee revisions for IT infrastructure used across the Group
• Risk of reduced corporate hiring and outsourcing activity due to deterioration in the external environment, including US tariff policy
• Risk related to the outcome of the Japan Fair Trade Commission's investigation into staffing fee setting at subsidiary Pasona Inc.
• Risk of increased costs and transition risk associated with the development and renewal of a new core system for the HR solutions domain