Growth in the HR Solutions segment is driving achievement of the FY2026 plan

HR Solutions is the core business, generating revenue of ¥11,286 million for the cumulative nine months of the fiscal year ending September 2026, up 17.7% year on year, and accounting for approximately 80.6% of consolidated revenue of ¥14,010 million. HR Solutions had 2,314 customers, an increase of 236 year on year, while MRR rose 16.2% to ¥1,089 million and ARPU increased 5.5% to ¥475,000. Customer numbers, recurring revenue and pricing all increased simultaneously, indicating that expansion of the subscription base, rather than a one-off large contract, was the main driver of revenue growth.

On a company-wide basis, customer numbers were 3,042, ARR was ¥16,521 million and ARPU was ¥457,000. Year on year, customer numbers increased by 178, ARR by 10.7% and ARPU by 6.1%. HR Solutions is pursuing enterprise customer acquisition, stronger consulting capabilities and parallel feature expansion, including generative AI. At the next earnings release, we will need to distinguish not only the increase in new customers but also the adoption rate among major customers, upgrades by existing customers and growth in consulting revenue.

For cumulative 3Q operating profit in HR Solutions, the earnings presentation shows ¥5,568 million, while the segment profit total in the earnings summary is approximately ¥5,441 million, indicating a discrepancy between the materials. The difference may reflect differences in the definitions of operating profit and segment profit or in the allocation of common costs, but as the gap is approximately ¥127 million, it will be important to see whether the full-year materials clearly present a bridge between segment profit and company-wide operating profit. In FY2025, HR Solutions generated revenue of ¥13,246.6 million and segment profit of ¥5,930.9 million, making the focus for FY2026 not only the expansion of revenue but also maintenance of the profit margin.

The company has stated that ARPU for the Talent Palette talent-management platform will continue to rise by several percent annually year on year from 4Q onward. At the next earnings release, it will be necessary to determine which of customer acquisition, upselling and churn supported full-year growth, starting from the 3Q levels of 2,314 customers, MRR of ¥1,089 million, ARPU of ¥475,000 and a churn rate of 0.37%. In addition, as specific guidance for FY2027 HR Solutions revenue and customer numbers has not yet been disclosed, whether segment-level guidance is presented with the full-year results will also be monitored.