Key Positives From The Results
Although revenue growth was marginal, OPM improved +0.8pt from 7.9% to 8.7%, confirming the sustained effectiveness of profitability improvement initiatives. Per-CM productivity reached an annualized JPY 1.14M, marking a new all-time high and underscoring the clear progress in structural reform.
- Gross Profit Marginimproved from 18.3% to 18.9% (+0.6pt YoY), driven by higher billing rates and rent reductions from site consolidation
- SG&Adeclined JPY 120M YoY; lower depreciation absorbed higher personnel costs, resulting in operating income of JPY 3.21B (+11.2% YoY)
- Net Income Attributable To Owners Of Parent Companycame in at JPY 2.27B (+22.2% YoY), boosted by a one-time JPY 150M reduction in income tax expense from preferential tax treatment
- ITOCHU Synergy Revenuereached JPY 4.44B (+5.5% YoY), with continued growth driven by increased telecom carrier business and CRM system integration support services
- BellCloud+ Deployed Seatsreached 9,800 (+1,000 seats QoQ); HOL pipeline shows 6 confirmed, 4 informally committed, and 12 in final-stage negotiations, with commercialization efforts advancing
Key Concerns From The Results
Revenue grew only +0.3% YoY, leaving top-line acceleration as a challenge going forward. Meanwhile, CM headcount declined to 31,130 (-1,100 YoY), raising the question of whether productivity gains from AI adoption and profitability initiatives can translate into revenue growth.
- SC (Smart Contact Center) Revenuedipped -0.3% YoY, weighed down by declines in staffing-related services within the service industry segment (JPY -510M)
- Finance Costsincreased JPY 40M YoY (from JPY 190M to JPY 230M); rising market interest rates and higher borrowing costs will continue to pressure profits
- Revenue Declined Across Multiple Verticals, including manufacturing (JPY -200M) and wholesale/retail (JPY -180M), warranting attention to customer portfolio concentration risk
- Tangible Fixed Assets And Equity-Method Investmentsdeclined by a combined JPY 1.23B, contributing to non-current asset contraction and raising questions about the balance with growth investment
Focus Areas / Items To Monitor Going Forward
- HOL Commercialization Progress And Revenue Contribution: Timing for conversion of the 6 confirmed / 4 informally committed / 12 final-stage negotiation pipeline into revenue and the associated ARR scale
- AVILEN JV BA Intelligence Ramp-Up: Three contracts awarded since launch, but the pace of order momentum and path to profitability relative to the FY2030 target of 200 clients
- Sustainability Of Revenue Growth Amid Declining CM Headcount: The extent to which AI adoption and price pass-through can drive per-CM productivity gains to compensate for the top-line impact
- Revenue contribution and gross margin outlook for each HOL component (Knowledge Generator → Sherpy → Voice AI auto-response) on a standalone basis
- Root causes of the JPY 510M decline in SC service industry (staffing-related) revenue and the outlook for recovery
- Quantitative disclosure of the full-year cost impact on COGS and SG&A from average wage increases exceeding 8%
- Breakeven timing for BA Intelligence and the probability of achieving the FY2030 target of 200 clients
- Full-year target for BellCloud+ deployed seats and the ultimate seat count target under Mid-Term Management Plan 2028
- Breakdown of growth drivers for SB business against the full-year plan of JPY 23.0B (telecom carriers, Horizon One, etc.)
- Number of initial store DX deployment cases and revenue scale from the Thinker × TOPPAN Group collaboration
- Interest-bearing debt reduction policy and target Net DER level in a rising rate environment
- M&A and business investment pipeline and available investment capacity
- Whether assumptions used for impairment risk assessment of JPY 94.6B in goodwill have been revised
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 36,701M | +0.3% |
| └ SC Business | JPY 31,340M | -0.3% |
| └ SB Business | JPY 5,360M | +3.5% |
| Gross Profit | JPY 6,924M | +3.3% |
| Gross Profit Margin | 18.9% | +0.6pt |
| Operating Income | JPY 3,213M | +11.2% |
| Operating Income Margin | 8.7% | +0.8pt |
| Net Income Before Tax | JPY 3,090M | +10.9% |
| Net Income Attributable To Owners Of Parent Company (Quarterly) | JPY 2,268M | +22.2% |
| Quarterly Comprehensive Income | JPY 2,379M | +32.5% |
| Basic EPS | JPY 30.51 | +21.5% |
| Diluted EPS | JPY 30.42 | +21.5% |
Operating income increased JPY 324M YoY, driven primarily by a JPY 219M improvement in gross profit and a JPY 121M reduction in SG&A. Net income attributable to owners of parent company grew +22.2% in double-digit fashion, further boosted by a one-time decrease in income tax expense (JPY 155M YoY tailwind).
Performance By Business Segment
| Segment | Revenue | YoY | Net Income Before Tax | YoY | Margin |
|---|---|---|---|---|---|
| CRM Business | JPY 36,675M | +0.4% | JPY 3,081M | +11.1% | 8.4% |
| Other | JPY 26M | -68.8% | JPY 9M | -37.2% | 34.6% |
- Transportation/Telecom: +JPY 260M YoY, led by expansion in CRM services for telecom carriers
- Finance/Insurance: +JPY 120M YoY, supported by steady demand in life insurance-related services
- Other Industries: +JPY 260M YoY, driven by contributions from new electricity services and real estate management
- SB Business: +JPY 180M (+3.5%) YoY, with expansion in telecom carrier customer/transaction management and Horizon One HR/accounting services
- Other Subsidiaries: +JPY 330M YoY, reflecting business expansion across group companies
- Service Industry: JPY -510M YoY; internet-related services grew, but a sharp decline in staffing-related business was the primary drag
- Manufacturing: JPY -200M YoY, with declines centered on equipment manufacturers and pharmaceutical-related clients
- Wholesale/Retail: JPY -180M YoY, due to volume declines in certain product sales services
Progress Versus Full-Year Guidance
Revenue progress stands at 24.1% and operating income at 24.7% against the full-year plan, broadly in line with the 25.0% benchmark. Net income attributable to owners of parent company reached 26.7%, exceeding the benchmark due to the one-time reduction in income tax expense from preferential tax treatment. Current progress rates indicate a solid start to the fiscal year.
| Item | Value (1Q Cumulative) | Full-Year Forecast | Progress Rate |
|---|---|---|---|
| Revenue | JPY 36,701M | JPY 152,000M | 24.1% |
| Operating Income | JPY 3,213M | JPY 13,000M | 24.7% |
| Net Income Before Tax | JPY 3,090M | JPY 12,600M | 24.5% |
| Net Income Attributable To Owners Of Parent Company | JPY 2,268M | JPY 8,500M | 26.7% |
- The CRM business exhibits minimal quarterly earnings skew, with a broadly even revenue distribution. A 25.0% benchmark progress rate serves as the guideline
Changes To Guidance
No changes to full-year consolidated guidance. Figures announced on April 8, 2026 remain unchanged.
Commentary On Shareholder Returns
The dividend forecast remains unchanged at JPY 60 per share annually (JPY 30 interim / JPY 30 year-end). The basic policy targets a 50% consolidated payout ratio, with a commitment to achieving dividend increases through earnings growth. The projected payout ratio is 52.5%.
Financial Position
Despite carrying JPY 94.6B in goodwill on the balance sheet, the equity ratio improved to 43.9% (+0.4pt vs. prior fiscal year-end), sustaining its upward trend. Net interest-bearing debt declined JPY 1.58B from the prior fiscal year-end through loan repayments, with Net DER decreasing to 0.54x.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Cash and Cash Equivalents | JPY 8,216M | +14.2% vs. prior FY-end |
| Total Assets | JPY 168,697M | -0.7% vs. prior FY-end |
| └ Total Current Assets | JPY 29,889M | +0.6% vs. prior FY-end |
| └ Total Non-Current Assets | JPY 138,808M | -0.9% vs. prior FY-end |
| Goodwill | JPY 94,679M | +0.0% vs. prior FY-end |
| Equity Attributable To Owners Of Parent Company | JPY 74,031M | +0.1% vs. prior FY-end |
| Interest-Bearing Debt (Short-Term Borrowings) | JPY 18,100M | +JPY 800M vs. prior FY-end |
| Interest-Bearing Debt (Long-Term Borrowings) | JPY 30,089M | -JPY 1,349M vs. prior FY-end |
| Net Interest-Bearing Debt | JPY 39,973M | -JPY 1,577M vs. prior FY-end |
| EBITDA | JPY 5,342M | Operating income JPY 3,213M + D&A JPY 2,129M |
News Released Alongside The Earnings Announcement
None
Major Announcements During The Quarter
- 2026/06/01Launched an AI contact center operations support service leveraging Zoom Contact Center for municipal governments; targeting deployment to 20 municipalities by March 2031 BellSystem24 Launches Sales of Zoom Contact Center-Based Operations Support Service for Municipal AI Contact Center Transformation
- 2026/05/25Began offering "Sherpy (tentative name)," an AI chat navigator as the second installment of HOL; proof-of-concept trials underway with a major life insurer and energy companies Launch of AI Chat Navigator "Sherpy (Tentative Name)," the Second Installment of Contact Center Generative AI Automation Solution "Hybrid Operation Loop," Capable of Accurately Responding to Complex Inquiries
- 2026/05/22Announced integration of KCS-compliant knowledge auto-generation solution "Knowledge Generator" with BellCloud+/BellCloud+CX from August 2026 Integration of KCS-Compliant High-Quality Knowledge Auto-Generation Solution "Knowledge Generator" with Cloud Voice Platform "BellCloud+®/BellCloud+CX®" to Expand Utilization of Call Recording Data
- 2026/05/01Entered the live commerce support space; providing end-to-end support from planning to performance measurement, with a pre-launch at Senshukai's "Belle Maison Fan Meeting" BellSystem24 Enters Live Commerce Support Space
- 2026/04/08Formulated Mid-Term Management Plan 2028; unveiled a three-year plan targeting revenue of JPY 175.0B and operating income of JPY 16.0B for FY ending February 2029 Notice Regarding Formulation of Mid-Term Management Plan
Large-Shareholding Filings / Material Proposals Over The Past Year
- SOMPO Asset Management: New filing → 5.19% (reported 2026/05/21) — Pure investment purpose through discretionary investment management contracts and investment trusts
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