Hello, everyone. I am Kobayashi, a director at SHIFT. Thank you very much for joining the livestream of our financial results briefing for the first quarter of the fiscal year ending August 2025. I will cover the performance status of Q1 and discuss plans for SHIFT3000. After my presentation, we will move on to a Q&A session. If you have any questions, please enter your organization name and your name and submit your questions via chat. We kindly ask that you submit your questions by the end of our presentation. Thank you for your cooperation. All right, let us get started with the presentation. Here is today's agenda. First, I will cover the Q1 performance, then our efforts towards further high growth, and finally, I will explain our plans for SHIFT3000. First, let us go over the executive summary.
Regarding our performance, we achieved a 20.3% increase in sales, and we also reached a very high level in terms of gross profit margin. We achieved a record high with a gross profit margin of 33.2%, the highest among past Q1 results. This was made possible by improving our utilization rate. For the second topic, we are working on initiatives to drive further growth while maintaining this utilization rate. We are implementing structural changes to achieve this, and I will explain those as well. For the third topic, regarding SHIFT3000, I will discuss how we plan to advance further growth. First, let us talk about the Q1 performance. Here is the PL. Our sales reached JPY 30.1 billion, which is a 20.3% increase compared to the previous period. What is noteworthy is the gross profit margin.
By maintaining our utilization rates, we were able to improve the gross profit margin, which was a challenge last year, to 33.2%, a 2.1-point improvement compared to last year. Typically, the first quarter tends to be lower than the last fourth quarter. In this regard, we were able to add 0.5 points by increasing the utilization rate. As a result, our operating profit increased by 94% compared to last year, reaching JPY 3.5 billion, and our operating profit margin was 11.7%, marking a very promising start. Here, we are showing the trends for each fiscal year. The JPY 30.1 billion mentioned earlier represents a progress rate of 23.2% towards our target of JPY 130 billion, which is significantly going well compared to past standards. We consider this JPY 130 billion in sales as our baseline. Therefore, we currently believe that surpassing these numbers is possible.
Regarding operating profit, compared to last year, we have achieved a progress rate of 26.1% for Q1, which is quite a high level. Next, let us talk about the trend in gross profit margin. The key issue was whether we could maintain the high utilization rates, which was a challenge, but we managed to maintain high utilization rates both on a parent and consolidated basis. We also succeeded in increasing engineer unit price, so we are maintaining a high level. The white dots here show the gross profit margins from past Q1s. You can see this trend in the graph at the top right, where we have achieved the highest value ever for Q1. Moving forward, we are planning to focus on how we can boost these numbers in Q2.
As I've noted here, the reason we were able to achieve a 33.2% gross profit margin is due to maintaining high utilization rates and increasing engineer unit price. Additionally, we implemented organizational changes for FY 2025. By creating industry-specific teams, we're aiming to connect more closely with our customers. By making the teams smaller, we can better focus on the current workload of our engineers, which helps us maintain high utilization rates. To strengthen our sales force, we made significant organizational changes, such as transferring members with technical knowledge to the sales department. Last year's challenge was the fixed costs, like depreciation from the headquarters relocation. However, as our sales grew, the ratio of fixed costs gradually decreased, allowing us to achieve a high gross profit margin. Second quarter is the busiest quarter for us, and it's our tailwind.
To boost our performance for the second quarter, we'll be ramping up our sales activities and working on improving our utilization rates. We're also continuing to hire both high-level and professional employees. As a result, the engineer unit price is increasing, leading to higher revenue from high-valued projects. This, in turn, is expected to boost our gross profit margin. By achieving this in the second quarter, we believe we've made a good start towards reaching full-year target, which is 33.5% in gross profit margin. Next, let's talk about the trend in customer unit price. Our loyal customers are those who provide us transactions for over one year with consistent annual dealings. The unit price for these customers has been on the rise, thanks to high-value sales and cross-selling.
The overall customer unit price for SHIFT itself saw a bit of a slump in FY 2024 due to the increase of new customers. However, by strengthening our sales capabilities, we managed to hit a bottom and then lift things up. From here, we aim to bring the customer unit price on an upward trend. Also, in this first quarter, we added two new companies through M&A, which has expanded the number of customer transactions on a consolidated basis. Next, we have the trends for a new KPI that we consider important. This is the monthly project unit price. It shows how much revenue we generate on average per month for a single project. Looking at the trends, back in 2017, it was around JPY 2 million per month. Considering the engineer unit price was about JPY 600,000, that's roughly equivalent to 2.5 people.
Then, as the engineer unit prices and proposal unit prices have increased, the project unit prices have been on an upward trend. However, since last year, it seems like things have been a bit stagnant. We believe that further increasing the project unit price is a crucial factor for SHIFT2000, SHIFT3000. To achieve this, we plan to strengthen our sales activities to boost these unit prices. This involves gaining customer trust and increasing cross-selling opportunities. If we can provide our services to more key positions, I believe we can increase the project unit price. With these initiatives, we're aiming to implement them this fiscal year and build further growth for FY 2025. The number of projects is on an upward trend, so by increasing the project unit price, we aim to boost our sales growth rate.
Next, let's talk about engineer unit price. Regarding engineer unit price, thanks to the improvement in utilization rates and the increase in sales of high-valued services, we've been able to achieve solid growth. We've finally managed to surpass JPY 1 million in engineer unit price. As for the number of engineers, we've been holding back strategically on hiring due to last year's utilization rates. It might seem like the number of engineers isn't growing much. We've been holding back on hiring, but now we want to shift towards expansion. We're ramping up our recruitment efforts to ensure we can hire effectively in the second half of the year. Over here on the right, there's a green line graph. This shows the ratio of business partners to the total number of engineers.
So far, we've been keeping the business partner ratio at around 8% to improve utilization rates, but now we're planning to increase the number of engineers from business partners to help cover recruitment. We think it's appropriate to raise this business partner ratio from 8% to 10%-12%. We plan to continue recruiting business partners accordingly. Next, let's look at the performance by segment. As you can see, the utilization rate has improved across the entire SHIFT group, leading to an increase in the sales rate in all segments. Also, the sales ratio is increasing, so we want to focus on improving this area as well. Next, let's talk about the ratio of SG&A expenses. The recruitment cost this quarter is at 2.2% of sales, which is relatively low. This is because, as mentioned earlier, we were holding back on recruitment activities, so it's a bit restrained.
However, moving forward, we will accelerate hiring again this year as our growth investments to support business expansion. Overall, we're at 21.6%, so we believe we've managed to grow quite efficiently. This is the consolidated balance sheet. In October, we implemented a share buyback for the first time. The balance sheet is looking solid, and we consider M&A as a strategic investment. We have ample investment capacity and are planning to continue making strategic investments. Next, I'd like to explain our plans for further high growth. As I mentioned earlier, we've managed to improve our gross profit margin by increasing our utilization rates. We've also made excellent progress towards our target revenue of JPY 130 billion. With this solid foundation in place, we want to initiate transformations for high growth. We have two main ideas for this. First, structural changes.
I believe that with the current structure, we can't achieve further high growth. We're working on redefining roles and setting goals to drive structural changes for future steady growth. Secondly, it's service. In other words, it's our business. We want to advance our business, especially by leveraging AI, which is being used in various industries these days. We're considering this year as the year of AI for us and plan to fully utilize it. First, let me explain about the structural changes. In order to surpass JPY 1 trillion and achieve further high growth, it's crucial to establish how we engage with our customers. For that, to strengthen our sales, we've appointed Vice President Sasaki as the new chairman. Additionally, we're recruiting experts as advisors from industries we are facing too. By applying this strategy in all fields, we believe SHIFT will enhance its industry recognition and increase sales.
In this way, we aim to accelerate top sales within leading companies in the industry. By advancing this approach across all industries, including technical fields with advisors, we believe SHIFT will enhance its industry recognition and increase sales. To strengthen our sales, we must enhance communication to build trust and raise project prices. Without gaining trust, we can't increase project unit prices as mentioned earlier. We're planning to expand our communication efforts to build trust with customers. One major change we've made this time is strengthening our service delivery team. Last year, we introduced a new system called the Captain System. This system is designed to capture opportunities that arise in the sales field. The Captain System is progressing smoothly this year as well, with an increase in the number of captains and the expansion of sales opportunities. However, this alone isn't enough.
We've established roles, structure, and evaluation system to maintain our growth rate. First, let's talk about our approach to maintaining a high growth rate. Up until now, we've been evaluating our employees based on our sales scale. As you can see in this graph, we're aiming to increase from JPY 400 million to JPY 500 million, expanding by JPY 100 million. However, this would only result in a growth rate of 125%. When it comes to increasing the growth rate, actually reducing the sales scale per manager, like going from JPY 200 million to JPY 300 million, also results in a JPY 100 million increase. This translates to a growth rate of 150%. We have members who are good at maintaining large scales of sales and those who excel at gaining trust in SHIFT and expanding from smaller scales. We've divided these into two categories.
We're not just chasing sales scale, but also focusing on smaller units to pursue growth rates. We've redefined this role. Until last year, we focused on scale, so we had delivery managers overseeing sales of over JPY 200 million and those overseeing sales below JPY 200 million. This was roughly a one-to-one ratio. Looking at the graph below, you can see that for sales over JPY 300 million, the growth rate was actually quite low. However, when we look at those under JPY 200 million, the growth rate is high. Based on this performance, we're changing our structure by reallocating people in appropriate roles for each member. For FY 2025, we're significantly increasing the number of managers overseeing sales in the JPY 200 million range, while also ensuring stable growth for larger scales. We're optimizing our allocation to maintain these levels.
By doing so, we can see that the expected growth rate is significantly enhanced. With the current state, we believe that with this reallocation, we can achieve a growth rate of 150%. To make this reallocation work, we're reviewing our evaluation system and moving forward with providing skill training support. With this, we've initiated a new system to achieve high growth from the first half to the second half and towards FY 2026. Next, let's talk about business evolution. We've modeled what we've been doing and are thinking about it in this way. When we first started, we focused on expanding our software testing services. Currently, we're at a scale of JPY 30 billion. Regarding the growth of our business, we first acquired BPO and then moved onto large-scale projects. To facilitate this scaling up, we're advancing our business evolution through Testing CoE.
We've established a framework to divide tasks from upstream to testing. We're aiming to become the industry leader. With this mindset, we're evolving our business. We've been modeling this evolution based on our past experiences. We've expanded our service capabilities to development, PMO, upstream consulting, security, and BPO with a new service called WASURENAI that we started last year as a new pillar of our business. We're planning to advance the evolution of our business with these new pillars. First, I'd like to explain the current situation regarding the expansion of our consulting services. We've been advancing our business through software testing, and based on the accumulated data and know-how, we're now providing consulting services. We're using these our insights as a tool to figure out how to achieve high-quality development, and we're getting involved from the upstream stages.
However, we found ourselves primarily focusing on downstream consulting, which meant we were limited to IT consulting and operational support, as well as support for some upper streams. Now, thanks to our brand recognition and enhanced recruitment capabilities, we've been able to attract top-notch consultants from leading consulting firms and business companies in the industry. As a result, since last year, we've significantly expanded the ratio of directors and senior managers in our consulting division. This expansion has also allowed us to extend our capabilities into the upper stream domain. As a strategic business consultation, we've expanded into DX business and organizational support, and we've managed to make 47 of proposal models. With the creation of business templates, we've been able to secure large-scale projects, as I've explained since last year. Here, we're showcasing some examples.
For instance, the first project involves securing a large-scale contract worth JPY 140 million per month. From there, we've been able to connect it to subsequent services like software testing and PMO. Even just in consulting, sales have increased by 1.5x and project unit price by 1.3x , allowing us to expand our business from consulting. This kind of growth has been progressing well. Next, let's talk about the ERP domain. To catch the big wave of the year 2028, we've been expanding in the ERP domain. When we analyze the market, we see that consulting fees are getting quite high. Especially in the on-premises, IaaS ERP domain are quite large in scale. At the same time, they are looking quite like a red ocean domain. On the other hand, the area we should be aiming for is the SaaS ERP version up and rollout domain.
This is often implemented without customization, which is our specialty. It involves a lot of testing areas like stable data transfer and core system integration, where large vendors find it hard to enter, and the project scale tend to be smaller. This domain is the field where we can fully utilize our capabilities. We are focusing on this area. The graph on the right shows implementing SaaS ERP, version up, and rollout are boosting sales. We've identified key points for expanding in this domain, which will help us grow our ERP business. It's not just that. By working with ERP, we believe we can also capture the surrounding BPO opportunities. For example, with tasks like data entry, if we can secure this area, we can fully utilize our resources. We're planning to advance our business growth in this way as well.
Next is agile. Regarding agile, we've been continuously supporting companies that are mature in agile practices. In this context, we've been advancing services that integrate development and testing, like Dev QA Ops, to support development systems. However, we've also noticed that traditional waterfall companies want to transition to agile but find it difficult to do so. Therefore, we're exploring how to enable agile transformation, not just in development. We're focusing on changes in company culture. We're advancing the framework development. This means that beyond just development, we believe it's crucial to focus on areas we're skilled in, like organizational structure, management mindset, cultural formation, and HR. By offering services in these areas to traditional waterfall companies, we aim to promote agile transformation. We're planning to advance our unique agile business expansion by simultaneously transforming the company, offering services in a full-scope manner.
The agile market is expanding, and we're determined to thoroughly drive sales in this area. Move on to our WASURENAI service. Once again, let me talk about our WASURENAI service. It's being rolled out as a platform for SaaS management. Every company is now using SaaS, and managing it has become quite a challenge. It's not just SaaS. Asset management, like managing computers and such, is also a task that carries a significant burden for information system departments. We've been advancing the implementation of WASURENAI that manages all of this, offering it for free. It's been just over a year, but we've already managed to implement it in 1,000 companies. As we steadily increase the number of companies implementing our service for free, we're actually seeing sales opportunities in business process outsourcing, BPO domain.
Out of these 1,000 companies, we've managed to secure about JPY 200 million per month in BPO services from 84 companies. By implementing WASURENAI in these companies, we've registered over 5,100 SaaS accounts. That's a lot of SaaS. We've got it all covered. We can categorize these 5,100 accounts into seven business operations, shown on the right. When we think about these registered services, like IT management and security, using SaaS means that instead of modifying systems to fit business operations, there's a trend towards standardizing operations to fit the SaaS. So we're working on providing BPO services that align with these standardized operations. In the past year, as you can see on the right, we've been able to get a significant number of business deals. By increasing the number of companies adopting our services, we're focusing on BPO in these standardized operations. We're leading the business.
We're planning to expand in this massive BPO market. In 2025, we're aiming to implement our services in 5,000 companies. We're really picking up the pace to reach that goal. All right, next is the use of AI. At SHIFT, we've been promoting the use of AI in all possible areas. In the explanation I gave before, I talked about using it for testing design and reverse engineering. But now, we're pushing the use of AI in every department and every task. This includes sales, delivery, HR management, and setting up environments to boost literacy about AI among all employees. Thoroughly handle AI is our common goal as SHIFT. So we're planning to make this extensive use of AI even more user-friendly this year. As the world moves towards AI agentization, we're also working on integrating various systems like groupware and sales management tools within the company.
We are planning to connect and integrate the AI applications, like the one you see on the left of this presentation, to speed things up even more. Within SHIFT, we are pushing for AI agentization. By doing this, we are aiming to thoroughly utilize it internally and to boost our sales. Also, we are working on increasing the gross profit margin through efficiency and reducing SG&A expenses. With this, we will become an AI-native company, so we are planning to push external sales to various customers. Within our company, we can measure the effectiveness. I believe we can present a clear ROI. By providing services in this way, our customers can also become AI-native. This leads to improved operational efficiency and better profit margins.
As a result, they can focus more on their core business. From there, we are taking on these standardized operations as BPO, and we believe this can lead to our business expansion. This change brought by AI is exactly what will drive SHIFT to SHIFT2000, SHIFT3000, or even JPY 1 trillion. We believe it is going to become a necessity, just like it is the norm. We are planning to push this evolution forward by 2025. Next, let us talk about our M&A achievements. We have announced the acquisition of two new companies.
Regarding Infratop Inc., we really want to strengthen our synergy with them. In Japan, there are only 1 million IT engineers, and SHIFT is tackling the shortage by hiring non-IT personnel. However, training is crucial for them to become IT professionals. While face-to-face education is the norm, online education and trainings are expected to become more prevalent. It is important to offer a wide range of services. Infratop Inc. is exactly the company that is providing online education and trainings for non-IT personnel. By connecting this company with SHIFT, we can strengthen recruitment and increase the number of IT personnel. This is not just for SHIFT, but also when they move to other companies, we believe we can enhance our human resource introduction business.
Currently, within the IT population of 1.08 million, about 60,000 are being added each year. Out of these, around 10,000 are seen as students coming from these technical schools. By partnering with Infratop Inc., we can expand and accelerate recruitment and staffing. Right now, for example, tuition fee is quite high and might be a burden for the participants. By creating a scheme for effectively free education, we aim to make the IT business and industry more attractive, which aligns perfectly with SHIFT's vision. We have also started a new partnership with a global company this time. Among SHIFT's customers, there are many who are expanding globally. In this context, there has been a significant increase in the demand for local support. To address this, we are expanding our services and forming business alliances with companies in the U.S.
We aim to support our customers locally as well. In December, we have moved forward with business partnerships with these two companies. SHIFT is taking a step towards global expansion. Next, let us talk about SHIFT3000. We set an annual sales target of JPY 130 billion. Thanks to improvements in our operational efficiency, we are on track to achieve this goal. As mentioned earlier, through structural changes and the thorough use of AI, we are aiming to create a high growth with targeting at JPY 140 billion- JPY 150 billion of sales. I would like to explain how we are going to move forward, especially with the AI agent transformation. Earlier, we talked about sales, delivery, and human resource management.
We are planning to bring about changes in these areas through the thorough use of AI. SHIFT believes that AI is not about replacing people, but about augmenting them. We are moving towards coexistence and mutual prosperity with AI. For example, in sales, we used to think about what services would be appropriate for our customers. This matching process can be improved with AI. We definitely think we can significantly increase the sales unit price and effectively achieve higher sales with fewer people. Regarding service delivery, by increasing productivity per person, we can handle multiple projects instead of just one. We believe this could effectively raise the unit price for engineers. AI can also supplement experience, which means we can significantly reduce the time spent on education and growth. In the SG&A divisions, a significant part is human resource management. SHIFT's recruitment capability is a major strength.
We have expanded our HR department for accelerated business expansion. We believe that by increasing efficiency, we can double our recruitment numbers with the current HR members. We are moving forward with AI for reading resumes. Also, activities like employee interviews and feedback can be more personalized with AI. This can lead to a decrease in turnover rates and an increase in recruitment numbers. This is exactly what SHIFT is aiming for. I believe this will become a new way of strengthening recruitment. Regarding the management department, we believe that by advancing AI, not just existing tools, we can further streamline operational tasks. By streamlining these operational tasks, we can allocate more people to strategic tasks. By increasing these strategic tasks, we aim to continue SHIFT's high growth, and we want to achieve this through AI. With SHIFT3000, we set 36% for gross profit margin target.
In simulations, we think we can achieve 38% in GPM. We also believe we can efficiently reduce the SG&A expense ratio to 16%. By doing this, we aim to increase the operating profit margin. This is the kind of vision we are striving for. We want to elevate the path to SHIFT3000 to a higher level and start moving things forward ahead of schedule from 2025. We are a company that solves social issues by using new technologies like AI. We believe we can enhance labor productivity and international competitiveness at the SHIFT2000 stage, which is reaching a revenue level of JPY 200 billion. We want to continue working towards becoming a company that is essential to society. That concludes our report on the performance activities for the first quarter of the fiscal year ending August 2025. Thank you very much