SHIFT (3697) investor relations material

Executive summary

• Q1 net sales reached JPY 34.8 billion, up 15.5% year-on-year and 23.2% of the annual target, driven by digital transformation demand and robust software services.

• Operating profit declined 19.9% year-on-year to JPY 2.8 billion, mainly due to increased hiring and SG&A expenses.

• Proactive investments in recruitment and AI, with AI revenue on track for JPY 7 billion and a target of JPY 10 billion.

• Major M&A with Nisseacom, expected to add JPY 20.9 billion in sales and JPY 1.5 billion in operating profit.

• Share buyback of up to 3% or JPY 10 billion to address undervaluation and enhance capital efficiency.

Financial highlights

• Gross profit margin declined by 0.7 points to 32.5% due to strategic investments and lower utilization rates.

• Adjusted operating profit for Q1 was JPY 3.3 billion, with an adjusted margin of 9.5%.

• Net income attributable to owners was JPY 1.8 billion, down 9.2% year-on-year.

• SG&A expenses increased 30.7% year-on-year, mainly from personnel and recruiting costs.

• Total assets as of November 30, 2025, were JPY 79.1 billion, with net assets at JPY 42.9 billion and an equity ratio of 53.5%.

Outlook and guidance

• FY2026 sales target is JPY 150 billion, with adjusted operating profit guidance of JPY 20 billion and adjusted EPS of JPY 51.3.

• Sales growth above 120% year-on-year expected in Q2 and Q3.

• Long-term targets: JPY 200 billion sales by 2028 and JPY 300 billion by 2030.