SMS (2175) Q3 2025 earnings summary

Executive summary

• Q3 FY03/2025 net sales rose 14% YoY to JPY 44,885 million, but operating income fell 27% and net income declined 12% due to higher hiring and advertising investments.

• Full-year forecast revised downward due to weaker job seeker motivation, intensified competition, and regulatory changes in the Career Segment.

• Overseas Business underperformed due to reduced marketing budgets and geopolitical factors.

• A joint venture with N-Gate Co., Ltd. was established to expand management support in the disability welfare field.

Financial highlights

• Net sales for Q3 FY03/2025: JPY 44,885 million (+14% YoY); operating income: JPY 3,592 million (−27% YoY); net income: JPY 3,846 million (−12% YoY).

• Revised FY03/2025 forecast: net sales JPY 61,050 million (−7% vs initial forecast, +13% YoY), operating income JPY 6,300 million (−31% vs initial, −24% YoY), net income JPY 6,050 million (−25% vs initial, −16% YoY).

• EPS revised to 70.81 yen from 93.85 yen.

• Career Segment sales: JPY 27,639 million (+14% YoY); Elderly/Disability Care Operators (Kaipoke): JPY 8,796 million (+23% YoY); Overseas: JPY 6,083 million (+3% YoY).

Outlook and guidance

• Net sales and profit forecasts were revised downward, mainly in the Career and Overseas Segments, due to lower job seeker activity and increased competition.

• Company will continue investing in advertising to attract job seekers and support future growth.

• Market for aging society services expected to expand in the medium to long term.

• Personnel expenses are expected to be lower in 2H due to reduced hiring, but advertising expenses will remain as planned.