Rise Consulting Group, Inc.

Business Details

Centered on four methodologies—"Hands-on Style," "Scopeless," "More than Reports," and "Professionals"—the company provides strategy formulation, business process reform, IT implementation, DX promotion, and more to a wide range of industries. In principle, staff below manager level operate under a one-consultant-per-client system, achieving high utilization rates. The One Pool system enables assignments that cross industries and domains, and the use of external partners is combined to supplement resource shortages. In the first quarter of FY2027 (ending February 2027), the impact on utilization from changes in personnel composition coincided with increased upfront investment, causing both revenue and profit to fall significantly below the same period of the prior year.

Recent Overview

Q1 operating profit declined sharply, down 51.3% year on year, due to changes in personnel composition and increased upfront investment

In the first quarter of FY2027 (ending February 2027) (March–May 2026), changes in personnel composition affected project acquisition and overall utilization, resulting in revenue of ¥2,116 million (down 4.1% year on year). Selling, general and administrative expenses swelled to ¥936 million (up 35.8% year on year) due to increased recruitment costs and sales-related personnel expenses associated with the promotion of priority measures, causing operating profit to fall sharply to ¥240 million (down 51.3% year on year). As a subsequent event, Ricoh AI Consulting Co., Ltd. (20% ownership stake, an equity-method affiliate) was established on June 11, 2026, through joint investment with Ricoh Company, Ltd. The full-year earnings forecast remains unchanged (revenue of ¥10,000 million, operating profit of ¥946 million).

Key Products

Growth Drivers

• Expansion of revenue scale driven by the continued increase in the number of consultants (active recruitment and rapid development into productive staff)
• Expansion of the consulting market driven by rising demand for DX and AI (domestic market forecast at approximately ¥1,023.0 billion in 2027)
• New customer acquisition through the establishment of a dedicated new business development department (Business Development Department) and strengthened practice-driven sales activities
• Resource expansion and reduced lost opportunities through the use of external partners (partner company platform)
• Business expansion into the AI consulting domain through the establishment of the AI-focused subsidiary NouScale and the establishment of Ricoh AI Consulting Co., Ltd. (an equity-method affiliate)
• Promotion of "optimization of personnel composition," "evolution of existing businesses," and "strengthening of sales capability through alliances, etc." toward achieving the medium-term management plan's (FY2026 ending February 2026 – FY2030 ending February 2030) targets of 20–25% revenue CAGR and 25–30% operating margin

Risks

• Decline in project acquisition capability and utilization rate due to changes in consultant personnel composition (which resurfaced in Q1 FY2027 ending February 2027, with operating profit down 51.3% year on year)
• Risk of erosion of human capital due to intensifying competition for hiring excellent talent and employee turnover
• Risk of revenue concentration in major clients (NTT DATA and group companies) (approximately 43% of revenue in FY2025, ending February 2025)
• Impairment risk related to goodwill (¥5,121 million): potential for impairment losses to arise if business plans are not achieved
• Commoditization risk from the rise of low-price competitors
• Outlook for a significant decline in full-year operating profit for FY2027 (ending February 2027) to ¥946 million, down 44.5% year on year, due to continued upfront investment (with Q1 progress rate remaining at only 25.4%)
• Risk of selling, general and administrative expenses remaining elevated due to increased recruitment costs and sales-related personnel expenses