Earnings Call: Q4 2026

Sep 4, 2026

Summary

FY26 revenue and profit declined, with crypto price fluctuations weighing on ordinary income despite higher operating income. FY27 guidance anticipates revenue of ¥24B; M&A and existing-business growth underpin FY28 Adjusted EBITDA target of ¥4B.

Thank you for joining Ateam Holdings fiscal year 2026 full year earnings call. Here are today's highlights. I will go through them in detail shortly. Today's agenda consists mainly of these four items. There are five items in total. This is the summary of the full year consolidated results. As shown here, revenue came to ¥22,997,000,000, 96.2% year-on-year and 93.9% versus forecast. Adjusted EBITDA was ¥1.1 billion, 64% year-on-year and 73.4% versus forecast. Ordinary income was ¥584,000,000, 36.8% year-on-year and 64.9% against forecast. Net income was ¥359,000,000, 34.7% year-on-year and 60% versus forecast. On this point, both revenue and profit declined year-on-year. We advanced various initiatives toward achieving our medium-term management plan, but ordinary income fell sharply due to the significant impact of crypto asset price fluctuations. What I have just explained are shown here on a graph. The previous page compared results against forecast. This page shows the year-on-year comparison. As for the factor behind the sharp decline in ordinary income mentioned earlier, as shown here, the price of Bitcoin fell significantly over the year from ¥17 million to ¥9 million. As a result, the provision of allowance for sales promotion expenses has decreased. Operating income, as you can see here, has increased significantly due to crypto assets. As we have explained before, regarding the impact of crypto asset market prices, when the price of crypto assets rises, the provision for sales promotion rises, so expenses increase. As a result, operating income drops, but ordinary income rises due to the valuation gain. When the price falls, it is the other way around. This time, the latter case applied. Operating income rose, but ordinary income declined. This slide shows revenue by segment. For revenue, D2C provided support, but both revenue and profit declined. Businesses acquired through M&A contributed to earnings, but revenue decreased due to a share transfer and the curbing of advertising expenses to secure profit. One reason is heightened customer acquisition competition in some media, as well as areas we deprioritized, which caused revenue and profit to decline. In entertainment, there was no major change from the previous period, but a contract for the project ended, which affected revenue and profit. These are the fourth quarter results. Revenue was ¥5,754,000,000, 96.7% year-on-year and 97.1% quarter-on-quarter. Adjusted EBITDA was ¥322,000,000, 105% year-on-year and 122.8% quarter-on-quarter. Ordinary income was ¥199,000,000, 54.2% year-on-year and 116.4% quarter-on-quarter. Quarterly net income was ¥16,000,000, 66.8% year-on-year and 14.5% quarter-on-quarter. Revenue dropped because we cut back our advertising spend in response to some media we deprioritized and to competitors stepping up their own ad placements. However, Adjusted EBITDA increased. By segment, the results are as follows. Digital Marketing revenue was ¥4,699 million. Adjusted EBITDA was ¥460 million. For entertainment, revenue was ¥1,054 million. Adjusted EBITDA was ¥68 million. This shows the quarterly performance trend for Digital Marketing, both year-on-year and quarter-on-quarter. Revenue decreased while profit increased. Growth in D2C has supported the overall results. In addition, revenue from microCMS, which joined the group through M&A, was the driver. microCMS itself is growing steadily year-on-year. In the entertainment business as well, there has been no major change, and profitability has been maintained through collaborative projects. This is the collaborative project ratio for the entertainment business, currently at 22.6%. As for the share of overseas revenue from our own proprietary titles, it has been trending at around 40%. The trend in consolidated quarterly results is shown on the slide. Let me now review our medium-term management plan and discuss our initiatives going forward. First, here is the medium-term management plan we have set out toward fiscal year 2028. We have set targets of ¥34 billion in revenue, ¥4 billion in Adjusted EBITDA, ¥2 billion in operating income, and a total payout ratio of 100% or more. I will also explain the three themes we are working on within the framework of this plan. The first is executing our growth strategy to enhance growth potential. This is our growth strategy associated with M&A. Looking back, we have made contacts with 293 companies to date, and as a result, have executed M&A with five companies, investing a total of ¥3.3 billion. We have also changed our M&A organizational structure. For funding, we have borrowed ¥1 billion. For PMI, our concept is we respect independence and autonomy of each company. This is the first key point. We have so far carried out five M&As, investing ¥3.3 billion. Since our plan has allocated ¥10 billion in M&A, outstanding amount is ¥6.7 billion. Going forward, as shown in the middle, our policy is to acquire businesses that can demonstrate what is distinctively Ateam and that can accelerate business growth. These are the five companies that have joined us to date. microCMS is a headless CMS. It provides an admin interface for managing websites. Paddle offers a rewards app with which users can earn crypto assets by walking. WCA is engaged in web marketing, and Strainer operates the economics media outlet called Strainer. SiGNITY is a company that provides PUSH ONE, a web push notification delivery service. As shown here, we have made contacts with a cumulative total of 293 companies, held 71 top management meetings, and signed share purchase agreements with five of them. The rate of increase has been rising steadily. As I mentioned earlier, we have changed our organizational structure. The former corporate strategy division has been abolished. An investment committee has been established which strengthens governance along with an M&A promotion office. As you can see, this consists of two bodies, one that judges whether an investment is appropriate and one that promotes M&A execution. Through the five M&A deals to date, about 10% of the Digital Marketing segment revenue now comes from the companies that have joined us. As noted here, microCMS and Paddle have both been performing well. microCMS has been growing steadily as such, and we believe it has been due to these four points. In the past, orders came in through an inbound approach, but we formed a business team and shifted to a more proactive approach. Second, we have strengthened promotion on Qiita, our engineer community site. We have also integrated the push notification service of the newly joined company mentioned earlier. In microCMS's product lineup, we now offer PUSH ONE, a web push notification feature as an optional add-on. Then there are our agency partners. We have been building out our agency network, which now numbers 100 agencies. As a result of these contributions, we have achieved these figures. Paddle has also been growing steadily, and we have pursued these four initiatives. The first is our track record. The second is global expansion. Thirdly, we have launched a new crypto asset app, and strengthening our relationships with the affiliates. These results also reflect strengthened relationships with crypto asset exchanges. Next is reducing risk and volatility under the medium-term management plan. Broadly, there are two elements. Managing the business portfolio and the policy for operating existing businesses. For portfolio management, based on internally defined metrics, we will at times consider divesting existing services. In fact, looking back, we have already divested two services. As for the policy on existing businesses, the Entertainment business inherently tends to be a high volatility business domain. For that reason, we are shifting toward a low-risk, medium-return collaboration model. Regarding strengthening of existing businesses, we have added a new service to Navikuru, our vehicle trading comparison site, and launched Navikuru Assist. For Hikkoshi Samurai as well, we have launched Hikkoshi Samurai Smart Compare. In both cases, users previously received about 10 calls from dealers in case of Navikuru or moving companies in case of Hikkoshi Samurai. However, these are new services. Users now receive one call or maybe three in the case of Hikkoshi Samurai Smart. For D2C, since it is based on recurring and subscription purchases, our policy is to acquire new customers to the extent that does not squeeze overall company profit. As a result, D2C is also being operated with a low volatility. These are our initiatives toward reducing risk and volatility. Now about strengthening shareholder returns. This is the third point of our key themes. This is our shareholder return policy. We target total shareholder returns of JPY 4 billion to JPY 5 billion and an average total payout ratio of 100%. Over the two years, between fiscal year 2025 to fiscal year 2026, we have returned JPY 2.4 billion to our shareholder. The red portion here, JPY 410 million, is the dividends. The gray portion, JPY 1,472 million, represents the increase over the originally planned dividend plus share buybacks. This means that in 2026, only dividends were paid out. Combining these three together, approximately JPY 2.4 billion was allocated to shareholder returns. We will continue to consider share buybacks and dividend increases going forward. To summarize our initiatives going forward, it boils down to two: actively promoting M&A and strengthening the earning power of our existing businesses. I will explain M&A on the next page. Regarding strengthening the earning power of existing businesses, I introduced the new services earlier. We plan to expand them further. Active M&A. Leveraging creativity multiplied by technical strength. We will compete in businesses where we can demonstrate what is distinctively Ateam. We intend to grow together going forward with companies that operate businesses with unique product strengths. What makes us distinctively Ateam has, since our founding, essentially meant using creativity, ideas, and strong technical capability. We want to grow together with companies that meet our three key criteria for growing businesses, which reflect our business policy. Does it have recurring customers? Does the business have a high degree of independence? Does it have an advantage in the market? Beyond that, there is the Ateam culture. It would be even better if a potential M&A partner's culture were very similar to ours. In fact, we believe the five companies that have joined us, mentioned earlier, fit within this description. In the medium-term management plan, we are aiming for Adjusted EBITDA of JPY 4 billion by 2028, and this is the breakdown. Against the fiscal year 2026 result of JPY 1.1 billion, we expect JPY 2 billion-JPY 2.5 billion from the new services I described earlier and further growth in existing businesses. We expect an additional JPY 500 million-JPY 1 billion in EBITDA earnings through M&A. Here, we have already invested JPY 3.3 billion of the total JPY 10 billion budget, and we intend to deliver these results using the remaining JPY 6.7 billion. As a result, we expect Adjusted EBITDA of JPY 4 billion. These are our initiatives. While no major changes from the previous period, we are extending from what was previously a B2B2C area further into B2B area. In practice, we are pursuing advertising agency operations and proposing new customer acquisition channels and growth centered on M&A. This is our financial strategy. As a result, we will work toward the PER growth and WACC reduction shown on the right. Finally, this covers shareholder returns and our earnings and dividend forecasts. For the earnings forecast, in 2027, we expect revenue of JPY 24 billion, out of which JPY 20.2 billion from Digital Marketing and JPY 3.8 billion from Entertainment. We forecast Adjusted EBITDA of JPY 1.2 billion, EBITDA of JPY 1.1 billion, operating income of JPY 600 million, ordinary income JPY 600 million, and net income JPY 300 million. As for our approach to the forecast, as was mentioned, since it is difficult even for us to predict crypto asset prices, for items such as ordinary income, forecast is based on the price as of the end of July fiscal year 2026. Regarding dividends, we will continue with JPY 28 per share. This is planned to be paid in two installments, an interim and a year-end dividend. The dividend payout ratio is 173.5%. This is our shareholder benefit program. We have decided to continue presenting shareholders holding five or more trading units with an annual QUO card worth JPY 20,000. This will be JPY 10,000 at interim point and JPY 10,000 at year-end. In 2027, as explained earlier, we will actively pursue M&A while growing our new services and existing businesses to strengthen our earning power. We see this as a year of steadily climbing the steps toward achieving our medium-term management plan. That concludes my explanation.