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Financial results presentation3697SHIFT Inc.Information and Communications, Services and Others

Second-Quarter Financial Results Presentation for the Fiscal Year Ending August 2026

Revenue reached a record high for the first half, while operating profit fell below the year-earlier period due to upfront investments in recruiting AI talent and AI-related systems. The company expects to begin recouping its AI investments in the second half and has indicated that it expects performance to recover.

Worth reading
51Recurring
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Mixed performance
Direction inferred from the company’s description.
Scale
25
¥100 million (AI investment amount in the first half)
Wording
Avoiding a definitive answer
How definitive the wording is.

Contents of this document

Financial results presentationSecond quarter of the fiscal year ending August 20267 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales720 Hundreds of millions of yen+16.8%
Operating profit69 Hundreds of millions of yen-14.3%
Gross Profit Margin33.5%
Operating profit margin9.6%
Selling, general and administrative expensesAmount not stated
Results for the three months of the current quarter
Net Sales
371.9 Hundreds of millions of yen+18.0%
Gross profit
127.79 Hundreds of millions of yen+14.3%
Operating profit
40.89 Hundreds of millions of yen-9.9%
Gross Profit Margin34.4%
Operating profit margin11.0%
What the company explained in this material
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • AI investment amount in the first halfApproximately ¥2.5 billion
  • Labor costs for developing AI solutions¥230 million
  • AI-related system usage fees (cost of sales)¥30 million
  • Personnel costs for developing AI tools¥870 million
  • AI talent recruitment costs (402 people)¥1.32 billion
  • AI-related system usage fees (SG&A)¥80 million
  • Other AI-related expenses, etc.¥30 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • Pipeline value at each point in time, including unbooked orders
  • Historical trends
New initiatives
  • Expansion of the AI modernization business
  • Expansion of the AI BPaaS business
  • Expansion of the DQS series
  • AI enablement of SHIFT on a standalone and group-wide basis
  • Business process automation using AI agents
Key KPIsA metric the company considers important as a management benchmark.
  • Average Revenue per Customer¥9.04 million
    Year on year against the same period last year+9.4%
  • Client contacts per customer2.1 People/company
  • Average revenue per client contact¥4.31 million
    Year on year against the same period last year+4.8%
  • Customer Retention Rate49.2%
  • Standalone revenue growth rate122.8%
Unit price and quantity metricsThese figures show sales broken down by price and volume.
  • Average Revenue per Customer¥9.04 million
  • Client contacts per customer2.1 People/company
  • Average revenue per client contact¥4.31 million
Market Size / Share
  • SOM¥7.5 trillion
    MarketTarget market for AI modernization
  • SOM¥12 trillion
    MarketAI BPaaS market
  • TAM¥40 trillion
    MarketAI BPaaS market
Number of employees
Hiring and changes during the period402 people included in AI talent recruitment costs
Contents of this document
ItemDetails
Document typeFinancial results presentation
Fiscal Period CoveredSecond quarter of the fiscal year ending August 2026
Net Sales720 Hundreds of millions of yen (YoY +16.8%)
Operating profit69 Hundreds of millions of yen (YoY -14.3%)
Gross Profit Margin33.5%
Operating profit margin9.6%
Selling, general and administrative expenses非開示
Results for the three months of the current quarterNet Sales 371.9 Hundreds of millions of yen (YoY +18.0%) / Gross profit 127.79 Hundreds of millions of yen (YoY +14.3%) / Operating profit 40.89 Hundreds of millions of yen (YoY -9.9%) / Gross Profit Margin 34.4% / Operating profit margin 11.0%
Breakdown of Factors Affecting the ChangeFactors AI investment amount in the first half / Amount Approximately ¥2.5 billion, Factors Labor costs for developing AI solutions / Amount ¥230 million, Factors AI-related system usage fees (cost of sales) / Amount ¥30 million, Factors Personnel costs for developing AI tools / Amount ¥870 million, Factors AI talent recruitment costs (402 people) / Amount ¥1.32 billion, Factors AI-related system usage fees (SG&A) / Amount ¥80 million, Factors Other AI-related expenses, etc. / Amount ¥30 million
Key KPIsIndicator name Average Revenue per Customer / Value ¥9.04 million / Year on year against the same period last year +9.4%, Indicator name Client contacts per customer / Value 2.1 People/company / Year on year against the same period last year Not disclosed, Indicator name Average revenue per client contact / Value ¥4.31 million / Year on year against the same period last year +4.8%, Indicator name Customer Retention Rate / Value 49.2% / Year on year against the same period last year Not disclosed, Indicator name Standalone revenue growth rate / Value 122.8% / Year on year against the same period last year Not disclosed
Unit price and quantity metricsIndicator name Average Revenue per Customer / Value ¥9.04 million, Indicator name Client contacts per customer / Value 2.1 People/company, Indicator name Average revenue per client contact / Value ¥4.31 million
Number of employeesNumber of Employees Not disclosed / Hiring and changes during the period 402 people included in AI talent recruitment costs
Assumptions Underlying the Business OutlookPipeline value at each point in time, including unbooked orders, Historical trends
Market Size / ShareMarket Target market for AI modernization / Amount ¥7.5 trillion / Category SOM, Market AI BPaaS market / Amount ¥12 trillion / Category SOM, Market AI BPaaS market / Amount ¥40 trillion / Category TAM
New initiativesExpansion of the AI modernization business, Expansion of the AI BPaaS business, Expansion of the DQS series, AI enablement of SHIFT on a standalone and group-wide basis, Business process automation using AI agents
Items this document does not state (16)
Ordinary incomeNet incomeFull-year earnings forecastProgress against full-year forecastSelf-assessment against the planSegment resultsNumber of stores and locationsRisk amount incorporated into the outlookMedium-term management plan targetsFinancial targetsAnnual DividendPayout ratioAcquisition of treasury sharesCapital expendituresOrders received and order backlogKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

The company made approximately ¥2.5 billion in AI investments in the first half. The breakdown included ¥1.32 billion in AI talent recruitment costs, ¥870 million in personnel costs for developing AI tools, and ¥230 million in labor costs for developing AI solutions.

How to read this page

This is not the documentKomori reads the disclosure the company filed and writes this summary. Figures are as stated by the company and are not audited.
Weight is not a verdictIt measures how much this changes what the company had already told the market. It is not a view on the shares.
Corrections happenIf the company reissues this disclosure, the page is rebuilt from the corrected version and the revision number moves up.
Second-Quarter Financial Results Presentation for the Fiscal Year Ending August 2026 | SHIFT Inc. (3697) timely disclosure | Komori