Direct Marketing MiX Inc. (7354) — Company information

Business

Direct Marketing Mix Co., Ltd. is a holding company with 9 subsidiaries, operating as a sales solutions company with direct marketing at its core. Through channels such as phone contact (outbound and inbound) via its self-operated contact centers, field sales, and web contact, the company directly approaches client companies' end users to support the sale of products and services. Its primary target is the telecommunications infrastructure sector, with NTT DOCOMO being its largest customer, accounting for 17.6% of sales. In recent years, the company has expanded into Hybrid-type Operations and DX Fulfillment domains, increasing its presence in the overall BPO market. Listed on the Prime Market of the Tokyo Stock Exchange.

Business Model

Based on outsourcing agreements with client companies, revenue is recognized using unit prices calculated on the basis of seat count, operating hours, and results achieved, among other metrics. The Marketing Business (93% of sales) covers outbound calling, BPO, and Consulting, while the Onsite Business (7% of sales) handles the staffing of communicators and others both within and outside the group. The company has been improving its revenue structure through the elimination of unprofitable projects and price pass-through, with the Marketing Business achieving an operating margin of 15.6% in FY2025 (ending December 2025).

Company Strengths

Sales to NTT Docomo, the largest customer, reached ¥3,985 million (17.6% of sales), up 17.3% year on year. Orders in the outbound domain from the telecom infrastructure sector have remained solid, and continuing transactional relationships with major customers form a stable earnings foundation.

After operating profit declined to ¥1,220 million in FY2023 (ending December 2023), the company carried out a cleanup of unprofitable projects, reviewed its cost structure, and passed through price increases to major customers. In FY2025 (ending December 2025), operating profit recovered to ¥2,133 million (up 48.7% year on year), with the Marketing Business operating profit margin recovering to 15.6%.

Each subsidiary has obtained certification under the ISMS international standard "ISO27001" as well as the Privacy Mark. In the BPO (Business Process Outsourcing) business, which handles important personal data entrusted by client companies, an information management system backed by third-party certification is one of the company's competitive advantages.

ENVALITH's Perspective

Operating profit of ¥925 million in Q1 FY2026 (fiscal year ending December 2026) represents a 39.4% progress rate against the full-year forecast of ¥2,350 million. Profit growth is accelerating, up 23.9% year-on-year, with price pass-through effects and the shift toward high-value-added domains contributing more than expected. The company describes performance as generally in line with plan, but the Q1 standalone profit level provides sufficient buffer to achieve the full-year forecast. The continued tailwind from expanding outsourcing demand amid labor shortages in the external environment is also worth noting favorably.

In Q1 FY2026 (fiscal year ending December 2026), the company acquired ¥300 million of treasury stock, strengthening shareholder returns. The annual dividend forecast has also been raised to ¥9.50 (a 35.7% increase from ¥7.00 in the previous fiscal year), demonstrating a proactive stance. On the other hand, the structure in which goodwill accounts for ¥13,063 million (48.4%) of total assets of ¥27,001 million remains unchanged, and impairment risk in the event of a downturn in performance remains a potential concern. Additionally, total borrowings (current and non-current) stand at ¥5,966 million, indicating a certain degree of financial leverage, and attention should also be paid to the increase in financial expenses amid rising interest rates (financial expenses of ¥28 million in Q1, approximately double the same period last year).

External revenue from the Onsite Business (staffing) was ¥333 million, down 21.4% year-on-year. Structural demand contraction continues as client companies increasingly bring contact center staffing in-house, and although the shift toward prioritizing profitability has secured operating profit of ¥31 million, the segment's scale remains on a downward trend. The external revenue ratio of the Marketing Business has risen to 94.5%, heightening the concentration risk whereby order trends in this business increasingly determine overall performance. Progress in diversifying beyond the telecommunications infrastructure sector will be a key point for medium- to long-term evaluation.

Performance Trend

Over the past five fiscal periods, revenue peaked at ¥30,286 million and ¥34,674 million in FY2021 and FY2022, respectively, before plunging sharply in FY2023 to revenue of ¥26,851 million and operating profit of ¥1,220 million. From FY2024 onward, profitability recovered rapidly through the elimination of unprofitable operations and a shift toward high-value-added domains, with FY2025 revenue of ¥22,694 million, operating profit of ¥2,133 million, and profit for the period of ¥1,345 million. In the first quarter of the fiscal year ending December 2026, revenue was ¥6,111 million (up 2.1% year on year), operating profit was ¥925 million (up 23.9% year on year), and quarterly profit attributable to owners of the parent was ¥581 million (up 25.3% year on year), clearly illustrating a structure in which profit growth substantially outpaces revenue growth. As an external factor, expanding outsourcing demand driven by labor shortages provides a tailwind, while uncertainty remains regarding a slowdown in personal consumption due to price increases and the impact of U.S. trade policy, among other factors. The full-year forecast remains unchanged at revenue of ¥24,000 million (up 5.8% year on year) and operating profit of ¥2,350 million (up 10.2% year on year).

Growth Strategy

Continued pursuit of profitability improvement through expansion of the three high-value-added domains and new customer acquisition and price pass-through.

Aiming to improve segment profit margin by concentrating on high-value-added operations. In Q1 FY2026 (ending March 2026), online financial planner consultations and other services in the Hybrid-type Operations area performed well, and the Marketing Business operating margin reached approximately 20%.

Expanding new business development personnel to promote customer diversification into finance, healthcare, local government, and other sectors. In Q1 FY2026 (ending March 2026), orders in the Outbound and Hybrid-type Operations areas outside the telecommunications infrastructure sector grew, and an increase in new customers was confirmed.

In addition to passing on rising labor costs to customers, the company is achieving further increases in customer unit prices backed by market recognition of its high productivity. In Q1 FY2026 (ending March 2026), a company-wide improvement in profit margin was confirmed, directly contributing to the improvement of the earnings structure.

The annual dividend forecast for FY2026 (ending March 2026) has been set at ¥9.50 per share (a 35.7% increase from ¥7.00 in the previous fiscal year). In Q1 FY2026 (ending March 2026), the company acquired ¥300 million of treasury shares, actively implementing a shareholder return policy linked to profit growth.

Direct Marketing MiX Inc.

Business

Business Model

Company Strengths

ENVALITH's Perspective

1Q operating margin of 15.1% shows high progress rate of 39.4% against full-year forecast, suggesting upside potential

Share buyback of ¥300 million implemented, but goodwill impairment risk on ¥13,063 million remains a point to watch

Continued sales decline in the Onsite Business reflects a structural challenge, while dependence on the Marketing Business has increased further

Performance Trend

Growth Strategy

Disclaimer

Direct Marketing MiX Inc.

Business

Business Model

Company Strengths

Stable large-scale order base in the telecom infrastructure sector

Rapid profitability recovery through cleanup of unprofitable projects and price pass-through

Information management system backed by ISO27001 and Privacy Mark certification

ENVALITH's Perspective

1Q operating margin of 15.1% shows high progress rate of 39.4% against full-year forecast, suggesting upside potential

Share buyback of ¥300 million implemented, but goodwill impairment risk on ¥13,063 million remains a point to watch

Continued sales decline in the Onsite Business reflects a structural challenge, while dependence on the Marketing Business has increased further

Performance Trend

Growth Strategy

Expanding the revenue share of the three core domains (Outbound, Hybrid-type Operations, DX Fulfillment)

Strengthening new customer development outside the telecommunications infrastructure sector

Achieving higher customer unit prices and price pass-through amid rising labor costs

Strengthening shareholder returns (dividend increase and share buybacks)

Disclaimer