Products HR is driving growth, but conversion into profit remains uneven

In the six months ended September 2026, group revenue was ¥138,366 million and operating profit was ¥4,249 million. Revenue increased 5.0% year on year, while operating profit fell 14.6%. By segment, Products HR generated revenue of ¥67,233 million, approximately 48.6% of group revenue, and segment profit of ¥1,856 million, making it the largest contributor to group profit. The human resources and education business as a whole generated revenue of ¥113,656 million and segment profit of ¥2,543 million, making clear that human resources-related operations are the group's main growth driver.

However, Products HR's revenue growth of 15.1% translated into profit growth of only 8.2%, so growth is not being converted directly into profit. In Q1, revenue was ¥32,497 million and segment profit was ¥993 million, up 15.5% and 32.3% year on year, respectively, indicating that profit growth momentum slowed on a cumulative first-half basis. The Q3 results and expense disclosures will need to distinguish whether upfront investment in hiring, training and workplace infrastructure is a necessary cost of responding to expanding demand or a temporary drag on profit.

The business's three-month average headcount was 25,270, up 14.5% year on year. This was further expansion from Q1's headcount of 23,287, up 10.1%, indicating progress in strengthening supply capacity through hiring and training. The company says that, in addition to expanded semiconductor investment for AI and data centers, orders from a range of industries including electrical and electronic equipment and machinery remain solid. However, it has not disclosed indicators that directly link demand and supply, such as semiconductor-related revenue, order volume, order backlog or the assignment rate of employees.

At the next results announcement, the focus will be not only on revenue growth but also on whether the increase in headcount is translating into actual working headcount, assignments and higher unit prices. If revenue growth remains at 15.1% year on year while profit growth stays in the single digits, it will be important to explain specifically when hiring and training investments will be recovered, the mix of contracted services, team dispatches and high-unit-price projects, and the benefits of diversification into industries outside semiconductors.