NEO MARKETING Inc. (4196) — Company information

Business

Neo Marketing Inc. is an independent marketing support company founded in 2000. Under the concept of "consumer-centric marketing support," it provides six services—Insight Driven (Qualitative Research), Customer Driven (Quantitative Research), Digital Marketing & PR, Customer Success & Crowdsourcing—based on its proprietary framework, the "Marketing Framework 4K." Its main clients are domestic companies, primarily in the manufacturing industry, and it has a track record of transactions with a cumulative total of over approximately 3,700 companies since its founding. The company's shares are listed on the Tokyo Stock Exchange (listed April 2021) and the Nagoya Stock Exchange (listed December 2024).

Business Model

The company utilizes its proprietary consumer panel "i-Research" (730,000 registered members) and affiliated panels (over 30.73 million cumulative members) as information infrastructure, handling research, development, promotion, and effectiveness verification in an integrated manner tailored to clients' marketing challenges. Marketing consultants (59 as of the end of FY2025 (ended September 2025)) each handle multiple clients, aiming to maximize customer unit value through cross-selling and up-selling. In FY2025 (ended September 2025), customer unit value rose to ¥2,795 thousand (up from ¥2,112 thousand in the previous period).

Company Strengths

Based on its proprietary framework, the "Marketing Framework 4K," the company can provide six services in-house, from discovering consumer insights to product development support, promotion, and effectiveness verification. While competitors tend to specialize in specific domains, the ability to provide integrated support serves as a key differentiating factor.

The company's self-operated consumer panel, "i-Research," has approximately 730,000 registered members (as of September 2025), maintaining an attribute composition that closely approximates that of the internet population. Combined with affiliated panels, more than 30.73 million people in total can be utilized, forming a service infrastructure that enables precise target extraction based on demographic and geographic information.

Since its founding, the company has accumulated business relationships with more than approximately 3,700 companies in total, with cross-selling and up-selling to existing customers serving as a key pillar of revenue growth. In FY2025 (ending September 2025), the average revenue per customer rose 32.3% year on year to ¥2,795 thousand, reflecting the results of the strategy of deepening relationships with existing customers.

ENVALITH's Perspective

In the interim period of FY2026 (ending September 2026), net sales were ¥1,385 million (+6.7% YoY) and operating profit was ¥120 million (+12.7% YoY), continuing to show improvement at the operating level. However, net income attributable to owners of the parent was ¥117 million, down 35.9% YoY. This was because the same period of the previous year included a special factor—income tax adjustment of ¥81 million (a negative tax burden) due to recognition of deferred tax assets—and the underlying earnings power of the business should be accurately assessed as being on an improving trend.

The full-year earnings forecast calls for net sales of ¥2,800 million (+21.4% YoY), operating profit of ¥100 million (+821.7% YoY), and net income of ¥100 million (+275.5% YoY). Interim operating profit of ¥120 million has already exceeded the full-year forecast of ¥100 million, suggesting a high likelihood that increased expenses (M&A-related costs, higher personnel expenses, etc.) are anticipated in the second half. While the consolidation effects of Essence Marketing and PA Communication are expected to contribute from the second half onward, attention should be paid to the risk that goodwill amortization burden and integration costs could weigh on profits.

The company made two subsidiaries in a short period (total acquisition cost of ¥177 million, total advisory fees of ¥19 million). The balance of long-term borrowings stands at ¥633 million (including ¥203 million due within one year), indicating an increasing trend in financial burden. The equity ratio remains at a certain level of soundness at 46.3%, but the amount and amortization period of goodwill are undetermined, leaving the future impact on profits unclear. External risks remain, including U.S. trade policy, geopolitical risk, and foreign exchange fluctuations, which could affect corporate appetite for marketing investment.

Performance Trend

Revenue has been on an expanding trend over the past five fiscal years, growing from ¥1,829 million in FY2021 to ¥2,306 million in FY2025. Operating profit peaked at ¥303 million in FY2021 and remained sluggish thereafter at ¥16 million in FY2024 and ¥11 million in FY2025, but improved significantly to ¥120 million in the first half of FY2026 (ending September 2026). The full-year forecast calls for operating profit of ¥100 million (up 821.7% year on year), indicating an expected structural recovery in profitability. The 35.9% year-on-year decline in net profit is attributable to the unwinding of a one-time tax effect from the prior year (recognition of deferred tax assets, with income tax adjustment of -¥81 million), and does not reflect a deterioration in underlying business conditions. As external factors, risks remain that price increases and delayed recovery in real wages could affect personal consumption, while corporate demand for AI utilization and marketing sophistication continues to support underlying demand.

Growth Strategy

Aiming for net sales of ¥2,800 million through increased marketing consultant headcount, service expansion via M&A, and higher customer unit value

In line with the medium-term management plan, the company continues to hire marketing consultants and focus on their training and development. It aims to expand its mid- to long-term customer acquisition and order-taking capacity, targeting sustained growth in net sales and customer count.

The company made Essence Marketing, which has strengths in the design and operation of SNS marketing targeting younger demographics centered on TikTok, a subsidiary effective April 1, 2026 (voting rights 60%, acquisition cost ¥66 million). This internalizes strategic design and operational capabilities in the SNS domain, building an integrated provision system spanning from research to SNS operations.

The company made PA Communication, an integrated marketing communications firm with strengths in the beauty and fashion domains, a subsidiary effective April 28, 2026 (voting rights 90.16%, acquisition cost ¥111 million). By internalizing PR functions and strengthening the ability to propose integrated solutions combining digital initiatives, the company aims to provide higher value-added services to client companies and promote cross-selling.

The company is strengthening composite proposals combining research, strategy, promotion, SNS, and PR for its existing customer base (cumulative total of over 3,700 companies), aiming to continuously raise customer unit value. In the previous fiscal year, customer unit value rose from ¥2,112 thousand to ¥2,795 thousand, and the company aims to further increase unit value through service expansion following the M&A transactions.

NEO MARKETING Inc.

Business

Business Model

Company Strengths

ENVALITH's Perspective

Interim period saw revenue and profit growth, but net profit fell 35.9% YoY due to the fading of a tax effect, indicating underlying weakness

Achieving the full-year forecast requires a second-half-weighted performance: the progress rate for operating profit already exceeded 120% at the interim stage

Accelerated growth through successive M&A is expected, but financial burden and integration risk warrant close monitoring

Performance Trend

Growth Strategy

Disclaimer

NEO MARKETING Inc.

Business

Business Model

Company Strengths

Integrated marketing support framework spanning the entire value chain

Proprietary consumer panel "i-Research" with approximately 730,000 members

Cumulative customer base of over 3,700 companies and cross-selling opportunities

ENVALITH's Perspective

Interim period saw revenue and profit growth, but net profit fell 35.9% YoY due to the fading of a tax effect, indicating underlying weakness

Achieving the full-year forecast requires a second-half-weighted performance: the progress rate for operating profit already exceeded 120% at the interim stage

Accelerated growth through successive M&A is expected, but financial burden and integration risk warrant close monitoring

Performance Trend

Growth Strategy

Expanding order-taking capacity through hiring and development of marketing consultants

Strengthening SNS marketing capabilities through the consolidation of Essence Marketing as a subsidiary

Incorporating PR and integrated marketing capabilities through the consolidation of PA Communication as a subsidiary

Promoting cross-selling and up-selling to raise customer unit value

Disclaimer