The core professional talent business recovered in 4Q, lifting full-year operating income +30.8%. Mirai Works Inc. now targets JPY 600M in operating income by ramping up new graduate hires and deepening relationships with large corporate clients.

Key Positives From The Full-Year Results

Revenue rose to JPY 11,630M (+4.4% YoY), marking a 15th consecutive year of top-line growth. Operating income reached JPY 371M (+30.8% YoY), or 100.5% of the revised plan issued on August 14. Personnel expenses rose by JPY 291M, but a JPY 190M reduction in recruiting and other SG&A partly offset the increase, so gross profit growth flowed through to the bottom line. 4Q returned to an operating profit on the recovery of the core business, giving the FY27 plan a reasonably solid starting point.

• Margin Expansion
  : Gross profit margin improved to 26.1% (+0.6pt YoY), and gross profit of JPY 3,030M hit a record high
• 4Q Turnaround
  : 4Q revenue was JPY 2,980M (+7.5% YoY) and operating income JPY 129M (vs. JPY 55M a year earlier). This marks a return to profit from a 3Q operating loss of JPY -11M
• Record Quarter for Core Service
  : Professional Agent Service posted 4Q revenue of JPY 2,779M (+9.0% YoY), a quarterly record. Average monthly contracts of 852 exceeded both the prior quarter and the prior-year period
• Higher Value per Contract
  : Gross profit per contract was JPY 256K (KPI disclosed in the earnings release). Growth in higher-value consulting and execution support engagements, such as AX support for large corporates, drove the improvement
• Stronger Cash Generation
  : Operating CF expanded to JPY 394M (vs. JPY 123M in the prior year). Goodwill is now fully written off, so absent new M&A, the JPY 22M of goodwill amortization booked in FY26 will not recur

Key Concerns From The Full-Year Results

Against the initial plan (revenue JPY 13,000M, operating income JPY 600M), the company delivered only 89.5% on revenue and 61.8% on operating income (our estimates). This forced a mid-year downward revision. The shortfall stemmed mainly from insufficient sales capacity and stagnant contracts per sales rep, meaning organizational issues capped earnings growth. The FY27 plan again hinges on getting people productive, so execution credibility will be tested.

• Contract Shortfall
  : Annual contracts totaled 9,931, or 87.1% of the 11,400 plan. Mid-career hiring doubled YoY (200%), but attrition meant the net increase in mid-career staff was only marginal
• Productivity Dilution
  : With new graduates formally assigned to sales, 4Q contracts per sales rep fell to 9.9 (vs. 14.7 a year earlier). The lag before new hires become productive is weighing on productivity
• Weaker Large-Client Penetration
  : Revenue per large corporate client fell to JPY 74M (vs. JPY 81M in the prior year and a JPY 90M plan). Contracts with large corporates also dipped to 6,607 from 6,624, so deepening these relationships remains a challenge
• Personnel Cost Pressure
  : Personnel expenses rose to JPY 2,021M (+16.9% YoY), outpacing gross profit growth (+6.7% YoY). Whether the company can sustain the cut in other SG&A (-23.0% YoY) will determine profit levels
• Repeated Impairment
  : The company booked a JPY 113M goodwill impairment related to Greenroom (acquired March 2025). This follows a JPY 93M impairment in the prior year, making it the second consecutive year of write-downs and confirming that the M&A investment has not paid off

Focus Areas / Items To Monitor Going Forward

• Sales Capacity and Productivity
  : Progress Rate against the FY27 plan assumptions of 67.6 sales FTEs (excluding FY26 new graduates) and 13.6 contracts per rep. The pace at which 23 new graduates become productive, along with mid-career staff retention, will determine whether the 11,000-contract target is achievable
• Large-Client Expansion
  : Progress by the newly established Firm Alliance Department in winning major foreign consulting firms, and growth in the number of Platinum clients (target: 22). The key question is whether accumulating high-value engagements can further lift gross profit per contract
• Turnaround of Loss-Making Businesses
  : Profit improvement in the Regional Revitalization and Solutions businesses through "selection and concentration." The FY27 plan still assumes an operating loss of JPY -110M for the Solutions Business, so we want clarity on the path to breakeven

Key Financial Highlights

(YoY figures for EPS, margins and 4Q metrics are our estimates. The impairment loss relates to goodwill for Greenroom, and the goodwill balance is now zero. A deferred tax adjustment of JPY -30M also contributed to the increase in net income.)

Performance By Business Segment

The earnings release reports a single segment, the Professional Talent Business. The figures below are based on business-level disclosures in the earnings presentation. The core Professional Talent Business generates most of company-wide profit, while the Regional Revitalization and Solutions businesses remain loss-making.

Segment Performance Table

(All figures are our estimates based on the sum of quarterly disclosures. Operating income is after allocation of common costs and excludes consolidation adjustments. The full-year actuals in the company's plan-vs-actual materials show operating income of JPY 623M for Professional Talent, JPY -119M for Regional Revitalization and JPY -110M for Solutions, which differ from the quarterly totals.)

Progress Versus Full-Year Guidance

Against the revised plan announced on August 14, revenue came in marginally short at 99.8%. However, tighter SG&A control, including outsourcing and advertising costs, pushed profit lines above plan, with operating income at 100.5% and net income at 108.4%. That said, these results follow a sharp downward revision from the initial plan (revenue JPY 13,000M, operating income JPY 600M). The feasibility of the FY27 plan should therefore be judged on how far the rebuild of the sales organization progresses.

(Full-year plan reflects the revised figures announced on August 14, 2026. Achievement rates for recurring profit and versus the initial plan are our estimates.)

• Loss-Making 3Q
  : 3Q (Apr–Jun) has posted an operating loss for two consecutive years, at JPY -19M in FY25 and JPY -11M in FY26. In both years this coincided with the quarter of peak personnel expenses (based on historical results)
• 4Q Productivity Dip
  : New graduates are formally assigned to sales in July. As a result, sales headcount jumps in 4Q and contracts per sales rep tend to dip temporarily

Guidance For Next Fiscal Year

FY27 guidance calls for revenue growth and a sharp increase in profit. Gross profit is projected to grow +11.2%, while SG&A growth is held to +4.2% (our estimate), lifting OPM to 4.8%. Key assumptions include Professional Talent Business revenue of JPY 11,600M and operating income of JPY 780M, 11,000 annual contracts and 67.6 sales FTEs. The plan does not factor in any M&A-driven growth.

• Revenue: JPY 12,500M (+7.5%)
• Operating Income: JPY 600M (+61.4%)
• Recurring Profit: JPY 600M (+58.0%)
• Net Income: JPY 360M (+130.5%)
• EPS: JPY 68.97 (+130.5%)

Commentary On Shareholder Returns

The annual dividend for FY26 was JPY 0, and the company expects to remain non-dividend paying in FY27. During the year, it disposed of JPY 38M in treasury shares and recorded a JPY 13M gain on disposal. The company repurchased JPY 101M of its own shares in the prior year but made no buybacks this year.

Financial Position

The company has no interest-bearing debt, and the equity ratio rose to 43.2%. The full write-off of goodwill has eliminated intangible asset risk, leaving a leaner balance sheet.

Disclosures Released Alongside The Earnings Announcement

Major Announcements During The Quarter

Large-Shareholding Filings / Material Proposals Over The Past Year

• Shoji Okamoto: 52.4%→51.2% (2025/12/24) - Representative Director of the issuer, holding as a stable shareholder (amendment report filed due to a decrease of 1% or more)