Link And Motivation Inc. Stock

[Interpreted] I am Yoshihisa Ozasa, Chairman and Representative Director of Link and Motivation. I would now like to begin the earnings briefing for the six months ended June 30 of the fiscal year ending December 2026. This is today's agenda. First, I will provide an overview of the company. Second, under the management report, I will present, one, our report on business results; and two, our report on organizational conditions.

Third, I will report on the progress of our medium-term growth strategy. Fourth, I will present the monthly fee revenue plan for Motivation Cloud and announce an upward revision to our MRR as of year-end. Fifth is concerning M&A, an announcement regarding the signing of a basic agreement on a share exchange to make SELF Inc. a wholly owned subsidiary.

Sixth, I will report on the progress of our share repurchase program. And finally, seventh, I will announce the expansion of our shareholder benefits program. Now for the first agenda, company overview. Our mission is, through Motivation Engineering, we provide opportunities to transform organizations and individuals and create a more meaningful society. All group companies and divisions are united under this mission. Our business operations consist of three divisions.

First is the Organizational Development Division. This is our B2B business targeting corporations and includes the Consulting & Cloud business and the IR support business. Next is the Individual Development Division, which is our B2C business. This includes our Career School business and Cram School business. Finally, shown at the bottom of the slide is the Matching Division. This division operates the ALT Placement business and the Personnel Placement business.

Moving on to the second agenda, the management report. I will first report on our consolidated statements of operations. Regarding revenues, we saw growth primarily driven by the Consulting & Cloud business as well as the recognition of revenue from three companies that became wholly owned subsidiaries in the second quarter of 2025. We saw a substantial year-on-year increase of 11.7%. Progress is proceeding as expected. Gross profit also saw a significant year-on-year increase of 14.6% as the Consulting & Cloud business and the Personnel Placement business, including OpenWork, grew as anticipated.

On the other hand, operating profit saw only a slight year-on-year increase due to higher SG&A expenses resulting from the full consolidation of these subsidiaries. However, progress towards our full year earnings forecast stands at 51.3%, indicating steady progress. Net income increased year-on-year. Here are the revenue and gross profit by segment.

First, in the top row is the Organizational Development Division. As a result of growth in our core Consulting & Cloud business, both revenue and gross profit saw substantial year-on-year increases, with revenue up 14.6% and gross profit up 14.4%. Moving on to the Individual Development Division. Although the Cram School business grew, the number of enrollments at existing classes at Career Schools declined, resulting in both revenue and gross profit falling below the previous year's levels.

Revenue was 93.7% of previous year's level and gross profit was 88.3% of the previous year's level. Next is the Matching Division. Due to significant growth in the Personnel Placement business centered on OpenWork, both revenue and gross profit saw substantial year-on-year increases, with revenue up 13.4% and gross profit up 17.8% year-on-year. Here is a summary by division. First, Consulting & Cloud business, driven by growth in Motivation Cloud, both revenue and gross profit increased year-on-year, with revenue up 9.2% and gross profit up 8.8%.

The graph lower right shows the trend in Motivation Cloud's monthly fee revenue. As of the end of second quarter, monthly fee revenue came to approximately JPY 650 million, up 21.3% year-on-year, indicating steady growth. As for the IR support business, we made two IR support companies wholly owned subsidiaries starting in the second quarter of 2025. Thanks to the contribution from the high-margin video streaming services operated by these two companies, both revenue and gross profit saw substantial year-on-year increases.

Revenue up 33.8%, gross profit up 48.6%. Next is the Individual Development Division. First, in the Career School business, both revenue and gross profit fell below previous year's levels due to a decline in the number of enrollments in existing classes. Revenue was 90.1% of the previous year's level and gross profit was 84.2% of the previous year's level. The graph lower right shows revenue from our online courses, which we have been focusing on. However, growth in this area has also been somewhat sluggish.

Next is the Cram School business. As the number of enrollment and average revenue per enrollee increased as expected, both revenue and gross profit saw substantial increases, with revenue up 17.7% and gross profit up 18.6% year-on-year. Next, Matching Division. First, regarding the ALT Placement business, as the number of placements increased, both revenue and gross profit rose year-on-year, with revenue up 9% and gross profit up 7%.

Next, Personnel Placement business. OpenWork Recruiting grew as expected, resulting in substantial year-on-year increases in both revenue and gross profit. Revenue up 25.3% and gross profit up 26.8%. The graph on the right shows the sales trend for OpenWork Recruiting. This segment also showed very strong growth, up 39.3% year-on-year.

This slide shows the consolidated SG&A expenses. With focused investments to accelerate growth, SG&A expenses increased substantially year-on-year. The full consolidation of three companies, including Unipos, starting in the second quarter of 2025, resulted in an increase in each category of SG&A expenses. This is the consolidated statements of financial position. Both assets and liabilities increased due to an increase in deposits associated with the share repurchase and an increase in financial liabilities.

Equity has decreased as a result of the share repurchase of JPY 934 million. Regarding the second quarter dividend, our policy is to continue paying quarterly dividends commensurate with our business performance, which allows for flexible returns to shareholders. For the second quarter, we plan to pay a dividend of JPY 4.1 per share on September 25. The annual dividend is projected to be JPY 16.4.

Next, moving on to the management report on two, the organizational conditions. As part of our human capital management philosophy, we aim to firmly link our corporate business strategy with our organizational strategy. Within our organizational strategy, with the goal of maximizing human capital to improve productivity, we have set two objectives: enhancing human resource capabilities and improving organizational capability or engagement.

This chart shows the engagement ratings for organizational capabilities. Utilizing one of Japan's largest databases, employees are ranked on an 11-point scale according to the engagement score, which is calculated based on the correlation between employees' expectations and their satisfaction with their company, their supervisors, and their workplace. On the right are the engagement ratings for each company. The engagement ratings for companies acquired last year in 2025 are also improving steadily. Agenda three is a progress report on our medium-term growth strategy.

We aim to achieve an operating income of JPY 15 billion in 2030. Furthermore, we are focusing on building a recurring revenue model centered on our Consulting & Cloud business, with a goal of achieving an ARR of JPY 24 billion as a key indicator. As milestones towards this goal, we have set targets of JPY 10 billion in operating income and JPY 15 billion in ARR in 2028.

To achieve this, we will expand the target customers for Motivation Cloud from major companies to midsized enterprises. By expanding our existing services and, in addition, focusing on the expansion of new services, primarily among our existing major customers, we will achieve accelerated growth in ARR.

Point one refers to the expansion of existing services and point two refers to the expansion of new services. Now let me explain point one further, the expansion of existing services. We are rolling out this initiative by industry. For existing services, we are expanding our reach from leading companies to midsized enterprises within each industry and promoting the adoption of Motivation Cloud Engagement. As a result, adoption is accelerating, particularly in the manufacturing, construction, energy, and transportation industries.

As highlighted on the right, in the transportation industry, we have secured introductions with Kyushu Rail Company, a major company, as well as the West Japan Railway Company. In the second quarter, we secured 21 new introductions in manufacturing, five in construction, two in energy, and five in transportation. Additionally, we're expanding our support beyond corporations to include local governments.

There is a growing need for organizational diagnosis and transformation within local governments as well. As a result of expanding our support primarily for major local governments, the number of organizations we support has increased to 26, including nine government offices. By leveraging the knowledge we have cultivated through corporate transformation, we aim to further expand our support.

Regarding new introductions, we have signed contracts with Tokushima and Miyagi Prefectural governments. Next, I would like to discuss the growth policy regarding the expansion of new services, point two. Motivation Engineering consists of two steps, diagnosis and transformation. First, our diagnosis service, that is Motivation Cloud Engagement, focuses on engagement. We also offer a diverse lineup of transformation services, to which we have added two new offerings.

First is the recruiting support service that is Motivation Cloud Entry Management, released in April. And second is the management support service that is the AI Management or Motivation Cloud Management released this month in August. Regarding the recruiting support service, ARR surpassed JPY 200 million within three months of its release, and it is progressing smoothly. By shifting to a cloud-based service, we have dramatically improved efficiency and enabled more accurate recruitment support, leveraging data.

I'd like to emphasize that this has been a very successful launch. Next, regarding the management support service, which was released this August, this AI agent autonomously supports management tasks, freeing up managers' time and helping them improve their management skills. As shown on the right, one common challenge is a lack of time due to frequent meetings with team members and customer interactions. To address this, the AI will assist with tasks such as handling inquiries and providing feedback, thereby freeing up time for managers.

Another common issue is that, while managers may possess technical skills, they often lack management skills related to organizational management and member development. To address this, the system will support the improvement of management skills by identifying areas for improvement among members and providing development advice to managers. We believe this market potential in this management domain is enormous.

In this high-potential management support market, the advent of AI is leading to an increased emphasis on individualized and direct management support. We aim to leverage our competitive advantages to further increase monthly fee revenue. Additionally, with an eye towards long-term expansion, we are making progress on our overseas expansion. We are expanding overseas with a long-term goal of becoming a global human capital management platform provider.

We are currently operating in five Asian countries, namely Singapore, Thailand, Vietnam, the Philippines, and Indonesia. And our monthly fee revenue has grown substantially, reaching approximately 160% year-on-year. Going forward, we aim to become a truly global human capital management platform provider by expanding into North America, Europe, Oceania, and other regions. Fourth agenda, I would like to explain the upward revision to the monthly fee revenue forecast for Motivation Cloud.

As you see here, Motivation Cloud's monthly fee revenue is accumulating very steadily, and our new services are also off to a strong start. Initially, we had planned for monthly fee revenue of JPY 700 million by the end of the year, but we are revising this figure upward to JPY 730 million, representing a year-on-year increase of 16.4%.

Now to the fifth agenda, M&A. We would like to announce the conclusion of a basic agreement on share exchange to make SELF Incorporated a wholly owned subsidiary. To summarize SELF in a nutshell, please consider it a generative AI company. On August 10, we concluded a basic agreement to begin discussions aimed at making SELF a wholly owned subsidiary of a company through a share exchange.

The company offers various services related to generative AI and proprietary AI technologies, including SELFBOT. Let me explain this in a bit more detail. SELFBOT, provided by SELF Inc. is a service that centralizes management of learned information and facilitates customer support, internal use and the deployment of AI agents based on that centrally managed information. One of the benefits is that it streamlines operations by reducing communication costs.

For example, in a common scenario where it takes time to respond to internal or customer inquiries, SELFBOT makes it possible to generate precise responses instantly. Additionally, while creating data materials while gathering information can be time-consuming, AI agents can summarize and output information tailored to specific requirements.

Within the Motivation Cloud, we position this service as part of the diagnosis and transformation category, specifically as an AI agent bot service within that transformation framework. We are committed to helping our customers improve their productivity. Furthermore, by combining SELFBOT with our cloud and consulting services, we can achieve continuous enhanced customer transformation outcomes.

For example, in the context of Personnel Placement consulting, rather than simply providing a one-time recruitment handbook after a few months of consulting and then ending the engagement, clients can subsequently use SELFBOT to provide information on topics such as building rapport during interviews, thereby fostering a long-term relationship even after the consulting engagement concludes. Similarly, whether it's sustaining the training effects in actual work after new employee orientation or improving the accuracy of managerial evaluations after providing an evaluation handbook, this SELFBOT is expected to generate significant synergy with our consulting services.

Discussions have begun, and we plan to allocate treasury shares we hold as consideration. The effective date of the share exchange is scheduled for Thursday, October 1. Agenda six, progress on the share repurchase. With the aim of improving ROE, we decided in February of this year to conduct a share repurchase with a maximum acquisition amount of up to JPY 6 billion, the largest in our history.

As shown on the right, as of July 31 of this year, we have acquired 47.01% of the total number of shares and 54.11% of the total acquisition cost. We will continue to steadily proceed with the share repurchase going forward. Agenda seven, announcement regarding the expansion of the shareholder benefits program. First, regarding our shareholder benefits program, simply put, it is a system that provides digital gifts whose value varies depending on the number of shares held and the length of continuous share ownership. To enhance shareholder returns, we have decided to increase the base amount of the shareholder benefits program by 10%. As a result, we will present shareholder benefits worth up to JPY 440,000 for the year.

When the benefit yield is combined with the dividend yield, the total yield will exceed 6%, significantly above the prime market average. We intend to continue focusing on shareholder returns moving forward. This concludes the presentation of the second quarter financial results. In particular, the Organizational Development Division and the Matching Division are making steady progress. We are also focusing on building a sustainable revenue base, and including this upward revision, we will continue to prioritize the stable growth of our business.

We hope you will continue to follow our progress closely. Thank you very much for your attention.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

This is Yoshihisa Ozasa, Chairman and Representative Director of Link and Motivation. I would like to begin the earnings briefing for the three months ended March 31, 2026. Here is today's agenda. First, I will provide an overview of the company; second, performance report; third, an update on progress of the medium-term growth strategy; and fourth, on the progress of share repurchase program.

Now let's begin with the company overview. Our mission is through motivation engineering, we provide opportunities to transform organization and individuals and create a more meaningful society. Each division and company operates under this mission. This slide shows our business structure consisting of three divisions. First, at the top is the Organizational Development Division. This division supports the creation of organizations that individuals choose. We refer to this as the motivation companies, and this division includes the Consulting and Cloud business and the IR Support business.

Next is the Individual Development Division. This division supports creating individuals that organizations choose. We refer to this as i-companies, and this division includes our Career School business and our Crime school business. Finally, shown at the bottom of the slide is the Matching division, providing opportunities to link organizations and individuals. And this division includes our ALT placement business and our personnel placement business.

Next, I would like to present the consolidated business results for the first quarter of the fiscal year ending December 2026. First, regarding revenues, we saw growth primarily driven by the Consulting and Cloud business, resulting in a significant year-on-year increase of 14.1%, progressing as expected. Operating income was also driven by growth in the Consulting and Cloud business. As a result, operating income also saw a substantial year-on-year increase, up 21.9%, which is also progressing as expected.

This slide shows the revenues and gross profit by segment. First, the Organizational Development Division. As a result of growth in our core Consulting and Cloud business, revenue increased significantly, up 18.7% year-on-year and gross profit rose 20.2%. Next is the Individual Development Division in the middle. Although the Crime School business grew, the number of enrollments in existing classes in the Career School business decreased, resulting in both revenue and gross profit falling below the previous year's levels. Next is the Matching division, driven by strong growth in the Personnel Placement business centered on OpenWork, revenue increased substantially by 14.4% year-on-year and gross profit rose 18% year-on-year.

Next is a summary of each division. First, the Consulting and Cloud business. Driven by the growth of Motivation Cloud, both revenue and gross profit saw substantial year-on-year growth with revenue up 11.2% and gross profit up 11.5% compared to the previous year. IR Support business. Following the acquisition since second quarter of FY '25, we made two IR support companies, our wholly-owned subsidiaries. Thanks to the high-margin video streaming services offered by these two companies, both revenue and gross profit saw substantial year-on-year increases with revenue up 48.2% and gross profit up 80.7%.

Finally, please look at the graph on the right. This shows Motivation Cloud's monthly fee revenue, up 20% year-on-year, and this is also showing strong growth. Next is the Individual Development Division. Regarding the Career School business, both revenue and gross profit fell below previous year's levels due to a decline in the enrollment in existing classes. Revenue was 90% of the previous year and gross profit was 88.6% of the previous year. Please look at the graph on the right. Amidst structural reforms, we have focused on online courses, but results have been slow to materialize, resulting in performance that is nearly flat from the previous year. As for the Cram School business, the number of enrollment and revenue per enrollee increased as expected with revenue rising significantly, up 12.5% and gross profit up 20.5% year-on-year. Next is the Matching division. First, regarding the ALT placement business, as a number of placements increased as expected, revenue saw a substantial year-on-year increase, up 11.3% and gross profit up 8.8%. Next is our Personnel Placement business. Here, OpenWork recruiting grew in line with expectations, resulting in a substantial year-on-year increase in revenue, up 21.5% and a significant increase in gross profit, up 24.7%. The graph on the right shows OpenWork recruiting sales, up 43.5% year-on-year, and this division has also grown substantially.

This slide shows the selling, general and administrative expenses. As a result of focusing on investments to accelerate growth, these expenses increased significantly year-on-year, up 19.2%. In particular, due to enhanced marketing efforts for Motivation Cloud, sales-related expenses rose significantly, up 23.8% year-on-year. This is the consolidated statements of financial position. Assets decreased due to a decline in cash and cash equivalents, while liabilities decreased slightly. Shareholder's equity decreased due to share repurchase.

Now, regarding dividends, we are continuing our policy of paying quarterly dividends, which allows for flexible payouts to shareholders. We plan to pay a dividend of JPY 4.1 per share for the first quarter on June 25. The graph on the right shows the trend in annual dividends. While there was a temporary pause around the time of COVID-19 pandemic, we have since been steadily increasing our dividends. Next, I will report on the progress of our medium-term growth strategy, the third point on the agenda. As shown on this slide, we have set a target of achieving JPY 15 billion in operating income in 2030 with a milestone of reaching JPY 10 billion in 2028. We are also focusing on shifting to a recurring revenue model, primarily through our consulting and cloud business and aim to achieve an ARR, annual recurring revenue of JPY 24 billion in 2030 as a key indicator. As a milestone toward this goal, we are targeting JPY 15 billion in 2028.

Specifically, regarding Motivation Cloud, we will focus on expanding new services for our existing major company customers while also broadening our reach to include medium-sized domestic companies and by doing so, realize accelerate growth of ARR. There are two points I would like to highlight. The first is expansion of new services and the second is expansion of existing services to medium-sized domestic enterprises. This is the overall service structure of Motivation Cloud. Until now, in response to the trend towards mandatory disclosure of human capital information, we have expanded our diagnostic services primarily among major enterprises. As the needs of major companies shift from disclosure to transformation, we will also focus on expanding our transformation services.

First, our diagnostic engagement service, Motivation Cloud Engagement is a service that boasts an overwhelming market share, having held the #1 position for 9 consecutive years. Moving on to transformation services. In addition to our existing Sharing Service, Role Development Service and DX Digital Transformation Support Service and Peer Bonus Service, we will be launching new Recruiting Support Service, and Management Support Service.

First, regarding the Recruiting Support Service. In terms of the market environment, while recruitment costs are rising for all companies, fill rates are declining and satisfaction with the quality of hires remains low. Going forward, an outcome-oriented approach that is simultaneously achieving both the quantity and quality in recruiting is required. Until now, we have provided side-by-side support through consulting in the recruitment domain. However, moving forward, we will transition from side-by-side support consulting to a cloud-based model and promote DX in recruiting, enabling us to support even more customers through what we call the Motivation Cloud Entry Management. Its key features include significantly streamlining the process where consultants previously handled everything from target setting to side-by-side support through cloud-based services while also enabling accurate transformation support driven by data. We will provide support through the use of Bridge aptitude test, the introduction of virtual interview systems and ongoing consulting support from consultants to drive results. The monthly fee revenue immediately following the release, while Motivation Cloud Engagement generated approximately JPY 5.5 million, Motivation Cloud Entry Management has generated JPY 7.5 million, indicating a very smooth launch.

The second point is our management support service. While AI-driven business efficiency continues to advance, the burden of management remains heavy and the importance of implementation support is expected to grow in the future. We aim to expand new in-house development of cloud services that helps managers free up time to focus on the tasks they should be prioritizing. Given the market environment, where support for management execution is becoming increasingly important, we are making steady progress towards releasing a new in-house developed cloud service by the end of 2026 that utilizes AI agents that allow managers to gain more time so that they can concentrate on their core responsibilities.

This is our growth strategy for expanding our existing services. Regarding our existing services, we're expanding our target to include domestic medium-sized enterprises and promoting the adoption of Motivation Cloud engagement. First, as shown here, we have secured adoptions from top-tier companies across various industries, delving deeper into those specific sectors. Adoption is accelerating in the manufacturing and construction industries. Order status for the first quarter of this year: We have secured 15 orders in the manufacturing sector and 4 in construction, indicating a gradual expansion from large enterprises to domestic medium-sized enterprises.

Next, fourth agenda on the progress of our share repurchase program. The share repurchase is proceeding smoothly. We have acquired 36.65% of the total outstanding shares, representing 41.67% of the total share value. This is our largest ever share repurchase program totaling JPY 6 billion, and the time line runs through August 31 of this year. We expect smooth progress going forward. And here's an overview of our core business operations. While some divisions such as the Individual Development Division are facing challenges, our key focus areas, the Organizational Development Division and the Matching division are growing steadily, benefiting from favorable market conditions. We hope you will continue to have high expectations for our future growth. And this concludes our earnings briefing. Thank you very much.

[Statements in English on this transcript were

spoken by an interpreter present on the live call.]

I am Yoshihisa Ozasa, Representative Director of Link and Motivation Inc. I would now like to begin the financial information briefing for the fiscal year ended December 31, 2025.

Here's today's agenda, which consists of 5 items. First, I will provide a company overview. And second, our performance report. Third, I will present our outlook for 2026. Fourth, I will share details regarding our announcement of our largest average share repurchase to date. Finally, as the fifth item, I will discuss our medium-term growth strategy, targeting operating income of JPY 15 billion in 2030.

Moving on to the first item, company overview. Our mission is through motivation engineering. We provide opportunities to transform organizations and individuals and create a more meaningful society. All of our group companies and business units are aligned and united under this single mission.

Regarding our specific operations, our business is structured into 3 divisions. First is the Organizational Development Division which oversees our Consulting & Cloud business and IR Support business. Second is the Individual Development Division, which operates our Career School and Cram School businesses. And finally, the Matching Division shown in the bottom section, this division operates our ALT, Assistant Language Teacher Placement business, which bridges foreign talent with local boards of education. In addition, we also provide Personnel Placement business within this division.

Now let's move on to the second item, performance report. This is our consolidated statements of operations. Regarding revenues, performance exceeded our forecast due to growth in all businesses, except the Career School business. We achieved a significant year-on-year increase, reaching record high revenues. Revenues reached JPY 41.522 billion, representing 110.9% of the previous year's level.

Next, regarding gross profit, our high-margin Consulting & Cloud business and personnel Placement business, including OpenWork and grew as expected. As a result, gross profit also exceeded our forecast showing a significant increase to 113.7% year-on-year.

On the other hand, regarding operating income, we have decided to implement further structural reforms in the Career School business. Consequently, we made the decision to record the full amount of goodwill for this business as an impairment loss. As a result, operating income fell below the previous year's level. Similarly, net income resulted in a year-on-year decrease due to the impact of recording this impairment loss.

Next, here are the revenues and gross profit by segment. In the Organizational Development Division, both revenues and gross profit saw significant year-on-year growth. While we fell slightly short of our forecast, we achieved record-high figures for both revenues and gross profit. Year-on-year, revenues reached 113.4% and gross profit reached 114.7% of the previous year's level.

In the Individual Development Division, the number of students attending our existing classes decreased as we prioritize restructuring within the Career School business. As a result of our transition toward online services, both revenues and gross profit for this division decreased year-on-year. Revenues were 94.7% and gross profit was 94.8% of the previous year's levels.

Conversely, the Matching Division achieved significant year-on-year growth in both revenues and gross profit. Our Personnel Placement business centered on OpenWork has grown significantly. Revenues reached 114.7% of the previous year's level and gross profit rose to 119.7% year-on-year.

Here's a summary of each division. First, in the Consulting & Cloud business, Motivation Cloud acted as the primary driver of growth. As a result, both revenue and gross profit saw significant year-on-year increases with revenues reaching 114.8% and gross profit reaching 113.9% of the previous year's levels. The graph on the right shows the Motivation Cloud monthly fee revenue. We achieved 121.6% year-on-year growth, and our MRR as of the end of last December reached JPY 627.382 million.

Next is our IR Support business. In addition to the production of an integrated report, the video streaming service saw strong growth. As a result, revenues increased to 106.2% year-on-year and gross profit achieved a significant jump to 124.2% compared to the previous year.

Allow me to provide more detail regarding the Motivation Cloud monthly fee revenue. While our forecast for the end of last year was JPY 650 million, the actual results fell slightly short of this target. This was due to various factors, including shifts in customer search behavior driven by the rise of generative AI. In response, we're optimizing our marketing channels and increasing our marketing budget. The number of sales negotiations recovered in the second half, and we have secured a number of sales negotiations required for growth. We invite you to stay tuned for our future progress.

Next, let's look at the Individual Development Division. Regarding the Career School business, while student enrollment in existing classes decreased, our online classes grew significantly as expected. This demonstrates that our structural reforms are progressing steadily. Also in that graph on the right side, our online course revenues expanded to 117% year-on-year. To further accelerate our restructuring, we have decided to recognize a full impairment loss on the goodwill associated with this business.

Moving forward, we aim for renewed growth by continuing to expand our online course offerings.

Regarding the Cram School business, both the number of students enrolled and the revenues per enrollee increased as expected. As a result, revenues reached 108.7% year-on-year, while gross profit saw a significant increase to 114.3%.

Next, I will discuss the Matching Division. In our ALT Placement business, the number of placements increased as expected. As a result, both revenues and gross profit grew substantially with revenues reaching 111% and gross profit reaching 111.9% compared to the previous year.

In our Personnel Placement business, OpenWork recruiting grew as expected. As a result, both revenues and gross profit showed a significant year-on-year increases with revenues reaching 127.4% and gross profit reaching 126.7% compared to the previous year. As shown in the graph on the right side, OpenWork recruiting sales are growing steadily, reaching 134.2% compared to the previous year.

Next, I will discuss our consolidated SG&A expenses. As a result of our focused investment to accelerate growth, SG&A expenses saw a significant increase, reaching 119.2% compared to the previous year. In addition to the increase in various SG&A expense items resulting from acquiring 3 companies, including Unipos, Inc., sales-related expenses, Item #4, increased due to intensified advertising for OpenWork and bolstered marketing for Motivation Cloud.

This is our consolidated statements for financial position. Assets increased, primarily driven by a rise in accounts receivable, reflecting the increase in sales as well as the recognition of goodwill from our M&A activities. Liabilities also increased mainly due to higher borrowings regarding net assets, this rose due to the recording of net income and the acquisition of Unipos Inc. shares through a share exchange. The total increase in net staff has amounted to JPY 2.432 billion. ROE decline is a result of lower net income and an increase in shareholders' equity following the acquisition of Unipos Inc.

Next, I would like to elaborate on the status of our goodwill. The goodwill balance has increased year-on-year. This is primarily due to the acquisition of Unipos Inc. as well as the acquisition of 2 additional companies within our IR Support business. On the other hand, due to the impairment loss in the Career School business, the goodwill associated with that segment has been eliminated. Given that the business environment for our other segments remain strong, we believe that our risk of future goodwill impairment has been significantly reduced.

Next, I would like to discuss our dividends. We will continue to pay quarterly dividends, which allow for flexible shareholder returns. For the fourth quarter, we plan to distribute a dividend of JPY 4.1 per share on March 25 from the next fiscal year 2026 onwards. We intend to pursue a continuous dividend increases through growth in business performance.

Now let's move on to our outlook for 2026. Here is a summary of our forecast of results for 2026. Our policy of concentrating management resources on our core Consulting & Cloud business remains unchanged.

Regarding revenues, we're projecting a record high of JPY 46.7 billion, driven by the substantial growth of our Consulting & Cloud business, we expect operating income to also reach a record high of JPY 6.31 billion.

Regarding ROE, we anticipate maintaining a high level of 30% or more.

The next slide presents our revenues and gross profit by segment. First, for the Organizational Development Division, we expect significant growth driven primarily by the expansion of our core Consulting & Cloud business. In the Individual Development Division, we will continue to steadily implement restructuring in our Career School business. We expect growth to slightly exceed the previous year's level. For the Matching Division, we're anticipating significant growth driven by further market share expansion in the ALT Placement business as well as the continued expansion of our Personnel Placement business, including OpenWork.

Next is the growth outlook for Motivation Cloud. We project that monthly fee revenue at the end of 2026 will reach approximately JPY 700 million, 111.6% of the previous year's level, driven primarily by the steady accumulation of Motivation Cloud engagement revenue.

These are our organizational indicators. First, we aim to link our business strategy with our organizational strategy and achieve enhanced productivity. To this end, we will maintain high levels of human resources and organizational capabilities.

Regarding talent strength, we have projected the ratio of employees with a role survey rating of A or higher as illustrated in this diagram.

Regarding our engagement rating, we will strive to ensure that 10 out of 10 companies achieve a rank of AA or higher.

Next, I would like to announce our largest share repurchase to date. Aiming to improve ROE through share repurchases, we have decided to implement our largest ever share buyback program with an upper limit of JPY 6 billion. The acquisition period will run from February 13 to August 31 of this year. While our past repurchases have been on the scale of JPY 1 billion to JPY 2 billion, we have authorized this record-breaking JPY 6 billion for the current program.

Now I'd like to discuss our medium-term growth strategy. While we have rarely touched upon specific medium-term figures in the past today, for the first time, I would like to outline our road map toward achieving JPY 15 billion in operating income by 2030.

First, I would like to share our mindset back when we founded the company in 2000. Fortunately, we were flooded with requests from clients right from the very beginning. It became clear that we needed to bolster our workforce immediately. So we began placing job advertisements for mid-career recruitment. Our core message at the time was this, corporations are leaving the most important management issue to last. Despite being a startup with only 7 members, we were overwhelmed by the response receiving 230 applicants through that 1 job advertisement. At the time, against the backdrop of the dot-com bubble's collapse, many companies were undergoing large-scale restructuring and layoffs. In such an environment, I felt a lingering sense of anxiety wondering if anyone would truly listen to us when we spoke about the importance of human capital and employee motivation. However, the overwhelming success of that job [ advertisement ] gave me the firm conviction that this business would succeed, that was exactly how I felt at the time.

Regarding our journey, we took our first steps in 2000 as an organizational transformation consulting firm. After growing steadily and achieving a public listing, we expanded our scope from organizations to individuals starting in 2010. This expansion led to the establishment of our Individual Development Division as well as the birth of our Matching Division. Subsequently, in 2016, we launched Japan's first cloud service for improving employee engagement. By transforming our consulting expertise into our cloud solution, we have probably maintained the #1 market share in the engagement field for 9 constitutive years.

Moving forward, if we plan to further accelerate our growth, leveraging the solid foundation we have built over the years, my current conviction is that to realize a more meaningful society, we must further expand the possibilities of human capital. Given the favorable external environment, we will achieve further growth as a human capital management partner for core clients.

This slide illustrates the projected growth of our operating income and ARR. Our goal is to achieve JPY 15 billion in operating income by 2030 with JPY 10 billion as a key milestone in 2028. Regarding ARR, we are targeting JPY 24 billion in 2030 with a milestone of JPY 15 billion scheduled for 2028.

As a result of steadily promoting the shift of consulting services to the cloud, Motivation Cloud enables us to diagnose organizational health, primarily through the lens of engagement. Consequently, Motivation Cloud engagement has partly maintained the #1 market share for 9 consecutive years. Furthermore, we're expanding our scope of transformation services. This includes Motivation Cloud sharing, which is designed to provide like organizational culture and our role development service which focuses on enhancing talent capabilities and individual strength. In addition, our DX Support Service is designated to drive productivity improvements. We have also our Peer Bonus Service, which we recently acquired through M&A. This service also contributes significantly to enhancing engagement.

To provide some specific figures, there are currently approximately 1,000 companies that we support through our diagnostic services alone. These 1,000 companies continue to attract their engagement scores through our diagnostics but have not yet progressed to receiving transformation support. On the other hand, we have 1,200 companies that utilize our transformation services alone, such as recruitment support the evaluation and compensation system design or human capital development. Consequently, the number of companies receiving our ideal integrated approach, both diagnosis and transformation is currently limited to approximately 250.

Going forward, we will implement a two-pronged cross-selling strategy. First, we will propose our transformation solutions to build 1,000 clients currently using only our diagnostic services. Second, we will encourage the adoption of engagement diagnostics for those companies that only receive transformation support. Through these efforts, we aim to increase the number of clients utilizing both diagnostics and transformation services twofold or even threefold. Furthermore, we are driving the cloudification of new segments within our transformation services. In addition to the 4 areas mentioned earlier, we will introduce Recruitment Support Services to enhance the volume and quality of hiring activities as well as Management Support Services. Both are scheduled for release within this year. Needless to say, these services will be fully AI integrated.

Next, regarding the expansion of our existing services, we will broaden our reach beyond major domestic corporations to include midsized and small domestic enterprises as well as overseas markets. In addition, we're expanding our new services by driving cloudification in new domains within our transformation business. Specifically, we plan to launch a new cloud service for Recruitment Support in April of this year. Another is our Management Support Service and also a new cloud-based offering, which we intend to release by the end of this year. Naturally, both of these services are AI-powered.

We are pleased to announce that the new Recruitment Support Service scheduled for release in April will be named Motivation Cloud Entry Management. Our goal is to achieve recruitment that not only increases the number of hires, but also continuously enhances their quality. We provide a one-stop solution that spans the entire process from marketing and closing to onboarding including support for BPO. A key differentiator is our ability to leverage our proprietary database to visualize the specific characteristics and aptitude of each applicant. By leveraging our consulting expertise, we'll support the simultaneous improvement of both the quantity and quality of recruitment, covering everything from talent pool development to candidate interviews. Furthermore, we will collaborate with harutaka, the recruitment DX service provided by ZENKIGEN Inc. with whom we recently formed a capital and business alliance. The harutaka product also leverages AI-powered web interviews to centralized recruitment-related data, enabling highly accurate optimization of the entire hiring process. It already has a proven track record with adoption by over 1,000 companies, primarily in major corporations. By integrating this functionality into Motivation Cloud Entry Management, we will launch it as a new cloud service in the recruitment field starting this April.

For long-term growth, we're also driving expansion into international markets, moving beyond the domestic market. At present, we have established a footprint in Asia, specifically in Singapore, Thailand, Vietnam, the Philippines and Indonesia.

Looking ahead, we plan to expand into North America, followed by Europe and Australia.

Our ultimate goal is to solidify our position as a premier global HR consulting firm. Our operations in the Asian market are progressing exceptionally well with growth outpacing our initial projections. Overseas, the monthly subscription revenue for Motivation Cloud has achieved a remarkable growth of about 450% year-on-year. In Vietnam, our platform has been adopted by a leading Japanese food manufacturer and we have further strengthened our presence by opening a new office in Hanoi. In Singapore, the number of [ information ] has almost doubled in just 6 months. In Thailand, we have achieved a growth rate of about 600% year-on-year. These results have led us to our firm conviction that Motivation Cloud is globally competitive and has significant potential in international markets.

Regarding my vision for the future, I believe that Motivation Engineering is a technology for developing our relationship-based perspective rather than being things through the prism of elemental productionism akin to the laws of physics. This perspective allows us to perceive organizations through their interconnectedness closer to biology than physics. I see Motivation Engineering as the movement to distribute this lens to society and to the entire world.

Going forward, we'll expand our reach, not only within Japan, but across the entire globe. We invite you to stay tuned for the exciting developments ahead.

The core message today is that we are experiencing exceptionally strong tailwinds. I hope you will keep a close eye on our future growth as we accelerate toward our goals. Thank you very much.

I'm Yoshihisa Ozasa, Chairman and Representative Director of Link and Motivation Inc. We will now begin the earnings briefing for the 9 months ended September 30, 2025.

Here's today's agenda. First, company overview; second, performance report; third, report on growth strategy of Consulting and Cloud business. Fourth, expansion of shareholder benefits program.

Now for the first item, company overview. This is our group's mission. Through Motivation Engineering, we provide opportunities to transform organizations and individuals and create a more meaningful society. All our companies and businesses are united under this mission.

Now the specifics of our business operations are structured into 3 divisions. First, the Organizational Development division. This encompasses our consulting and cloud business, which supports corporate clients in practicing human capital management. Another is our IR support business, which supports corporate clients in disclosing human capital management information.

Next is the Individual Development division. This includes the Career School Business, which primarily supports career development for working adults and the Cram School Business, which supports improving the academic ability of elementary, junior high and high school students.

Finally, the Matching Division, the ALT Placement business deploys native English-speaking assistant language teachers to local governments and boards of education. The other is the Personnel Placement Business, which supports matching job seekers and companies.

Now I will proceed to the second point, the performance report. This is the consolidated statements of operations. Regarding revenues, we saw significant growth, primarily driven by the Consulting and Cloud business. Revenues increased substantially year-on-year by 11%, progressing as expected. Gross profit substantially increased by 12.7% year-on-year as the high-margin Consulting and Cloud business and the Personnel Placement business, including OpenWork progressed as expected.

Regarding operating income, our core Consulting and Cloud business drove growth, resulting in a substantial year-on-year increase of 11.1%.

Net income increased year-on-year, reflecting higher operating income despite an increase in income taxes and other factors. This shows revenues and gross profit by segment.

First, the Organizational Development Division. Revenues and gross profit increased substantially year-on-year as a result of significant growth in the Consulting & Cloud business. Revenue increased by 11.9% year-on-year and gross profit grew by 12.7% year-on-year.

Next is the Individual Development division in the middle. Revenues decreased and gross profit was flat year-on-year as the Cram School business grew, but new enrollments in existing classes in the Career School business slumped. Revenue decreased by 4.3% year-on-year and gross profit reduced by 0.9% year-on-year.

Next is the Matching Division. Revenues and gross profit both increased substantially year-on-year, driven by strong growth in the Personnel Placement business centered on open work. Revenue increased by 14.1% year-on-year and gross profit grew by 17.7% year-on-year.

Here's a summary by division. For the Organizational Development Division, revenues and gross profit increased significantly year-on-year because of substantial growth of 26.7% in monthly fee revenue of Motivation Cloud. For the Consulting and Cloud business, revenue was increased by 15.2% year-on-year and gross profit grew by 13.9% year-on-year.

Moving to the IR Support business. Revenues decreased slightly by 2.4% year-on-year due to the absence of a major nonrecurring event that occurred in the previous year. However, an increase in the gross profit margin resulted in a substantial increase of 10.4% in gross profit.

Next is the summary for the Individual Development division. First, for the Career School business, online courses, a priority service generated substantial growth. The number of enrollments in existing schools decreased, resulting in a year-on-year decrease of 5.9% in revenues and a slight decrease of 2.8% in gross profit. The graph on the right shows the trend in online course revenue. This segment grew steadily by 21.4% year-on-year.

Moving to the Cram School business, revenues increased by 6.5% and gross profit increased substantially by 12.7% year-on-year as enrollment and revenues per enrollee increased as expected.

Next, the summary for the Matching division. First, the ALT Placement Business. The number of ALTs dispatched increased in line with expectations, resulting in a substantial increase in revenues of 10.5% and an increase of 9.9% in gross profit year-on-year.

Regarding the Personnel Placement business, revenues and gross profit both increased substantially by 25.6% and 24.1%, respectively, year-on-year due to growth in OpenWork recruiting in line with expectations. The graph on the right shows the trend in OpenWork recruiting revenue. It also grew sharply, increasing by 31.9% year-on-year. This shows the consolidated statements of operations.

SG&A expenses, the total expenses increased by 14% year-on-year. First, number three, office and system expenses increased as a result of stronger technology development of Motivation Cloud. Additionally, number four, sales-related expenses increased due to expansion of advertising at OpenWork. Furthermore, number five, other expenses increased due to an increase in expenses related to the acquisition of Unipos. This is the consolidated statements of financial position.

Assets increased due to an increase in receivables resulting from higher revenues and recording of goodwill associated with M&A. Liabilities increased primarily because of an increase in borrowings. Equity increased by JPY 3.797 billion due to the recording of net income and the acquisition of shares of Unipos through a share exchange. This concerns the dividends for the first 3 quarters of 2025.

Our policy is to continue paying quarterly dividends, allowing for flexible payments. We also maintain our policy of continuing dividends linked to performance. For 2025 3Q, we plan to pay a dividend of JPY 4.1 per share on Thursday, December 25.

Next, report on growth strategy of Consulting and Cloud business. First, market environment in core businesses. Given the current decline in Japan's workforce and the rapidly shifting industries toward knowledge and service-based models, diversifying motivations to work and so on, human capital management continues to attract increasing attention. In this context, we recognize a growing need for enhancing human resources capabilities, starting with recruitment, followed by development and improving engagement.

Therefore, among our 3 divisions, our focus is on accelerating the Consulting and Cloud business within the Organizational Development division.

Regarding the competitive advantage of the Consulting and Cloud business, our strength lies in providing a one-stop solution for human capital management, diagnosis, transformation and disclosure. Furthermore, in each individual area, for example, in the diagnosis domain, we have held the #1 market share for 9 consecutive years in the engagement segment. This is Motivation Cloud. We possess one of the largest databases in Japan.

Moving to that Transformation domain. We offer one-stop solutions for challenges across the entire spectrum of organizational and HR matters, including recruiting, training, development, evaluation, compensation systems and corporate culture transformations. This comprehensive capability is another competitive advantage. Annually, we support approximately 900 companies through these consulting services.

Regarding disclosure, which falls under our IR support services, we assist companies in disclosing the growth of their human capital based on diagnosis and transformation. Following the recent acquisition of 2 companies, we have now secured approximately 1,000 client accounts, representing about 1/4 of the roughly 4,000 listed companies.

Let me now discuss our initiatives to accelerate growth. First, for diagnosis, we plan to increase the number of clients supported. For transformation, we aim to expand our service areas.

Regarding increasing diagnosis support, number one, large domestic companies; and number two, domestic SMEs, while we also serve local governments and overseas clients. Today, we will focus on number one and number two, for transformation and expansion of service offerings; number three, we plan to enhance service offerings through internal development, M&As and business partnerships.

Regarding number one, further expand relationships with major companies in Japan. We are focused on expanding the introduction of Motivation Cloud at major companies as a key growth driver. Motivation Cloud monthly fee revenue from companies with 5,000 or more employees increased significantly by 30% year-on-year. We will continue to promote adoption across a wide range of industries and among leading companies within those sectors to accelerate growth.

Next, regarding number two, expand relationships with small- and medium-sized enterprises in Japan. Our partner companies such as FCE, San-in Godo Bank, Awa Bank and starting this October, Fukuoka Financial Group have a combined customer base of up to 52,000 companies.

Leveraging this customer asset, we will launch a new SME-focused service, Motivation Cloud Basic. This is an affordable version of Motivation Cloud designed for SMEs, offering one-stop solutions for challenges such as recruiting, training talent development and enhancement, compensation systems and corporate cultural transformation.

Number three, expansion of Motivation Cloud transformation Services. For instance, to revitalize internal communication, we offer motivation cloud sharing. For training managers, we have Motivation Cloud role development. Additionally, we have RoboPat and FCE Prompt Gate as well as Unipos, which recently joined our group. These services developed in-house through business partnerships or via M&A will expand our transformation offerings.

Moving forward, many companies currently face recruitment challenges. We plan to expand our services to address these challenges, such as developing junior employees or cultivating senior management through new offerings developed in-house via M&A or through business partnerships.

Here's the trend in Motivation Cloud's monthly fee revenue. Monthly fee revenue of Motivation Cloud increased by 26.7% year-on-year and surpassed JPY 620 million with the addition of the peer bonus Unipos service. We will achieve further growth by focusing on the development of transformation services as well as the introduction at major companies.

Next, as you can see here, in August 2025, we decided that shareholders who have held 1,000 or more shares for 1 year or longer as of the record date for the fiscal year ending December 2025 will receive Digital Gift, which can be redeemed in various forms such as electronic money or points.

In addition, in response to feedback from shareholders regarding the gift, a QUO card has been added to the lineup of rewards.

This concludes the presentation of our third quarter financial results. Overall recurring revenue is growing steadily. We hope you will continue to watch for our future growth.

Thank you for your attention.