Nihon M&A Center (2127) Q2 2025 earnings summary

Executive summary

• Sales for the first half of FY2024 were JPY 18,591 million, down 3% year-over-year, and ordinary profit was JPY 5,990 million, down 1.9% year-over-year, slightly missing sales guidance but exceeding profit forecasts by 33.1%.

• Second quarter standalone sales were JPY 10,953 million (+0.3% YoY), with ordinary profit at JPY 4,444 million (-0.6% YoY), maintaining a stable profit margin.

• Number of transactions closed declined 8.5% YoY for the first half, but new sell-side and buy-side mandates hit record highs, indicating strong future deal flow.

• Strategic investments in marketing, recruitment, digital transformation, and regional initiatives are ongoing.

• The company maintains industry leadership, recognized by Guinness World Records for transaction volume.

Financial highlights

• H1 FY2024 sales: JPY 18,591 million (-3% YoY); ordinary profit: JPY 5,990 million (-1.9% YoY); net profit: JPY 3,774 million (+2.3% YoY); ordinary profit margin: 32.2%.

• Q2 FY2024 sales: JPY 10,953 million (+0.3% YoY); ordinary profit: JPY 4,444 million (-0.6% YoY); profit margin: 40.6%.

• M&A sales per transaction rose to JPY 40.4 million in Q2 (+0.4% YoY).

• Gross profit margin for H1: 54.6% (-0.4pt YoY); SGA expenses down 5.0% YoY.

• SG&A ratio improved due to a higher proportion of consultants versus admin staff.

Outlook and guidance

• Full-year FY2024 sales forecast: JPY 48,900 million (+10.8% YoY); ordinary profit: JPY 17,000 million (+2.9% YoY); EPS: JPY 34.68 (+5.0% YoY).

• H2 expected to contribute more to sales and profit, with impacts from new management and marketing initiatives.

• Mid-term plan targets ordinary profit of JPY 30.5 billion by FY2027.

• Strategic investments to temporarily lower ordinary profit margin to 34.8% in FY2024.

• Optimism is driven by record-high leading indicators, but urgency remains due to recent underperformance in closed transactions.