Overseas segments account for 57% of Dentsu Group’s revenue, highlighting a structure that challenges the conventional view of the company as being driven primarily by profits from Japan. This article reviews the goodwill impairment trend resulting from overseas expansion and the factors behind the stock price recovery.
According to Dentsu Group’s annual securities report for the fiscal year ended December 2025, revenue from Japan was ¥608.3 billion, representing 42.4% of the total. The Americas, EMEA and APAC combined generated ¥820.2 billion overseas, accounting for 57.2%. On a numerical basis, more than half of the group’s revenue is now generated overseas.
The origins of the group’s overseas weighting include its acquisition of UK-based Aegis Group plc in 2013, making it a wholly owned subsidiary, and its acquisition of US-based Merkle Group Inc. in 2016. The group currently reports results across four regions—Japan, the Americas, EMEA and APAC—with overseas operations now at the center of revenue generation, while Japan continues to significantly outperform overseas operations in earnings power.
For the fiscal year ended December 2025, adjusted operating profit was ¥121.1 billion in Japan, ¥72.3 billion in the Americas, ¥33.8 billion in EMEA and ¥2.7 billion in APAC, leaving the three overseas regions with a combined total of only ¥108.8 billion. The operating margin on gross profit was 24.4% in Japan but remained low overseas, while growth trends were positive in Japan and negative across the overseas regions.
The stock price rose from ¥3,044 at the end of October 2025 to ¥3,545 at the end of November, but fell after the start of the new year to ¥2,699 at the end of March 2026. It then entered a recovery trend, rising to the ¥2,900 range at the end of April, the ¥3,000 range at the end of May, ¥3,545 at the end of July and ¥3,704 at the end of August. At the same time, a recovery in overseas earnings is considered important for a future recovery.
Goodwill impairment declined from ¥831.1 billion at the end of December 2023 to ¥697.0 billion at the end of 2024 and ¥320.1 billion at the end of 2025. Meanwhile, impairment losses of ¥72.2 billion, ¥235.2 billion and ¥402.5 billion were recorded in the three years from 2023 through 2025. In the fiscal year ended December 2025, the overseas business recorded ¥402.5 billion in goodwill impairment, and profit attributable to owners of the parent was negative for the third consecutive fiscal year. A return to profitability is expected in the first half of 2026, and full-year earnings guidance has also been set.
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