AGEHA Inc.

Business Details

With major corporations as its primary clients, the company's strength lies in its "companion" model, providing seamless support from issue identification and strategy formulation through to the production of creative tools such as video, websites, and graphics, and the provision of solutions. From this fiscal period, the company has reorganized its support areas into four domains: "Product & Service Marketing," "Corporate Communication," "Inner Branding," and "Recruiting." It is pursuing both deeper cross-selling within existing clients and expansion of the number of newly acquired client companies in parallel.

Recent Overview

Net sales rose 2.6% year on year to ¥970 million, but operating profit fell 27.5% to ¥68 million due to a rise in the cost ratio

In H1 FY2026 (October 2025 to March 2026), net sales increased 2.6% year on year to ¥970 million, securing revenue growth, while cost of sales rose from ¥406 million to ¥459 million, causing the gross profit margin to decline from 56.9% to 52.6%. Operating profit fell sharply by 27.5% year on year to ¥68 million. By area, Corporate Communication (up 49.3% year on year) and Recruiting (up 16.7% year on year) grew, while Product & Service Marketing (down 32.9% year on year) and Inner Branding (down 30.7% year on year) declined. Operating cash flow was negative ¥131 million, mainly due to a substantial increase in trade receivables (up ¥228 million). There has been no change to the full-year earnings forecast (net sales of ¥1,850 million, operating profit of ¥50 million).

Key Products

Growth Drivers

• Growing corporate needs to solve issues related to corporate branding (increasing importance of human capital management)
• Deepening expansion through cross-selling and up-selling within existing clients (increasing transaction value per client)
• High growth in the Corporate Communication area (up 49.3% year on year in this interim period) and steady expansion in the Recruiting area (up 16.7% year on year)
• Continued expansion of the internet and video advertising markets
• Increase in the number of newly acquired client companies through a strategy focused on major corporations and strengthened sales efforts toward key clients
• Improved precision in addressing client needs through the reorganization of support areas into four domains

Risks

• Decline in orders due to reductions in client companies' recruitment and advertising budgets (net sales tend to be seasonally low in the first quarter)
• Decline in gross profit margin due to increased cost of sales (gross profit margin of 52.6% in this interim period, deteriorating from 56.9% in the same period of the prior year)
• Persistently elevated SG&A expenses due to increased personnel costs (salaries and allowances increased from ¥215 million to ¥241 million compared with the same interim period of the prior year)
• Risk of operating cash flow turning negative due to a substantial increase in trade receivables (up ¥228 million)
• Decline in net sales in the Product & Service Marketing area and the Inner Branding area (down 32.9% and 30.7% year on year, respectively)
• Risk of client companies restraining budgets due to macroeconomic uncertainty, including U.S. trade policy and rising prices
• Achieving the full-year forecast (net sales of ¥1,850 million) requires ¥880 million in sales in the second half, posing a risk of progress being weighted toward the latter half of the year