Nomura Research Institute,Ltd. (4307) Q4 2026 Earnings Call Transcript

（Tokyo-24th April, 2026）

Nomura Research Institute, Ltd. FY March 2026 Financial Results Briefings Q&A Session Speakers:

Kaga Yanagisawa President & CEO, Member of the Board, Representative Director Masaaki Yamazaki Senior Executive Managing Director, Member of the Board, Representative Director Takao Yamaguchi Senior Managing Director

First Inquirer (Analyst) Q1: What are your reasons for and the benefits of collaborating with Anthropic? Given that U.S. AI companies have limited routes to access Japanese clients, doesn’t collaborating with such companies create a risk that—through deepening their learning about Japanese clients—they could ultimately take clients away from you? A1: Since its founding, Anthropic has placed extremely strong emphasis on safety and has focused on enterprises, and we have therefore taken note of the company and worked to build a relationship since its early days. Anthropic is strong with financial clients and places importance on safety, which is similar to NRI. We believe this collaboration will enable us to contribute to enhancing the corporate value of Japanese clients. We do not see U.S. companies taking clients away from us as a concern. The depth of our client relationships and the depth of our industry expertise are not things that can be easily absorbed by AI. Q2: I would like to ask about margin improvement under the Medium-Term Management Plan 2028. Compared with your explanations such as operational reforms in indirect functions, price increases, and productivity improvements in Financial IT, the operating margin target of 21.1% for the final year of the Medium-Term Management Plan 2028 appears 1 / 8 These materials were prepared for the sole purpose of providing information to use as reference in making investment decisions, and are not intended as a solicitation for investment. Copyright（C） Nomura Research Institute, Ltd. All rights reserved.

conservative. A2: Productivity improvements of “tens of times” apply when you isolate specific processes, and they are not something that can be rolled out company-wide all at once. The operating profit target of 200 billion yen for the final year of the Medium-Term Management Plan 2028 has been set quite conservatively, and if there is upside from production innovation effects, we will revise it as appropriate. Q3: I would like to ask about the business structural reform of the overseas business. Regarding the process behind the decisive decision to record full impairment for the two companies in Australia, was this driven by management, bottom-up, etc.? A3: For the overseas business, we initially considered an upside business plan, but performance began to deteriorate from the third quarter of FY March 2026. After entering the fourth quarter, during the process of formulating the Medium-Term Management Plan, we reworked the business plan for FY March 2027. The business growth rate has not changed from the initial plan, but profit for FY March 2026 declined compared with the amount initially expected. Based on this gap, we recalculated the figures and as a result, it led to full impairment (for the two companies). In the fourth quarter of FY March 2026, we conducted repeated simulations among the management teams of the overseas subsidiaries, management in Tokyo, and the corporate functions, and determined the impairment loss amount.

Second inquirer (Analyst) Q1: With respect to the overseas business structural reform for which you recorded costs of 2.0 billion yen in the fourth quarter of FY March 2026, has it been completed as planned? Please provide details of the businesses subject to withdrawal or impairment, particularly in Australia. A1: As part of the structural reform of the Australian business, we sold and liquidated Planit’s UK base, as well as the UK base of Velrada, which we acquired (in 2022) to add functions to ASG, which we acquired in 2016. The costs incurred for these were recorded separately from the goodwill impairment amount. In addition, we carried out workforce reductions, recording costs of approximately 1.0 billion yen in Australia and approximately 50 million yen in North America. In total, this resulted in recording structural reform costs of approximately 2.0 billion yen. We believe all structural reforms were completed by the end of FY March 2026.

2 / 8 These materials were prepared for the sole purpose of providing information to use as reference in making investment decisions, and are not intended as a solicitation for investment. Copyright（C） Nomura Research Institute, Ltd. All rights reserved.

Q2: Please provide quantitative figures for your outlook for revenue and operating profit for the overseas business in FY March 2027. A2: For the overseas business as a whole, we expect revenue of approximately 110 billion yen, roughly in line with FY March 2026. For operating profit, our minimum goal is breakeven. While we aim for upside, the overseas business profit/loss incorporated into our earnings forecast is break-even. Q3: I would like to ask about the AI-related business. On page 7 of the Medium-Term Management Plan 2028 materials, you indicate that AIrelated revenue was approximately 30 billion yen in FY March 2026. Is this mainly Consulting, and what is the breakdown? Also, what kinds of projects will increase as you head toward the 300 billion yen target? Will this lead to improved profitability including higher unit prices? A3: Defining AI-related revenue is very difficult. Recently, we have seen an increase in projects for AI implementation support and AI infrastructure development. Projects are becoming larger in scale, and projects in the tens of billions of yen have begun to emerge. We have also recently won projects to rebuild core systems on the premise of AI utilization. Projects premised on AI utilization are increasing, and projects that partially utilize AI are also expanding. Note that projects in which clients utilize AI are included in AI-related revenue, but projects in which we utilize AI in system development are not included in AI-related revenue. Q4: The stock market is highly focused on medium-term risks of disruption caused by AI. Could you comment on those risks, particularly with respect to the overseas business? A4: Overseas, clients are increasingly bringing IT development in-house, and outsourced portions tend to be more susceptible to economic fluctuations. In that environment, it has long been said that staffing-type businesses would be disrupted. At NRI, we have been working to replace and transform our workforce from staffing-type to personnel capable of project-based work. Through this structural reform, we have completed our response to low-growth areas.

Third inquirer (Institutional Investor) Q1: Under the Medium-Term Management Plan 2028, you have set a target of AI-related revenue of 300 billion yen in FY March 2029. How do you expect the composition—such as Consulting versus system development—to change? Also, how will margin levels 3 / 8 These materials were prepared for the sole purpose of providing information to use as reference in making investment decisions, and are not intended as a solicitation for investment. Copyright（C） Nomura Research Institute, Ltd. All rights reserved.

change compared with conventional SI? A1: All system renewal projects will be proposals that incorporate AI in some form. In Consulting as well, AI utilization will be a premise for business reforms and organizational changes, and initially, revenue in the Consulting segment will likely become entirely AI-related. AI-related business is an area where NRI can demonstrate its strengths, and we would like to raise unit prices as well. Since the market is in the process of expanding significantly, we will carefully assess the trend. Q2: In co-creation with Anthropic and others, what are NRI’s unique added value and differentiating factors? A2: Clients have high expectations for our strategic consulting capabilities that can unpack management issues. Our strength is that we can enter AX (AI Transformation) projects from the upstream. We also have a strength in understanding even the tacit knowledge behind existing systems and business processes, and we can design architectures in areas that cloud vendors cannot penetrate. In addition, we have also received high evaluations for our integration capabilities—combining models in the way that is optimal for each client. Q3: The revenue CAGR of 5% in the Medium-Term Management Plan 2028 appears conservative. To what extent have you factored in strong domestic demand such as modernization? A3: Please understand that we have estimated it conservatively.

Fourth inquirer (Analyst) Q1: Regarding Australia, how many personnel remain within Planit? Even if they can be used for initiatives such as automating testing processes, wouldn’t retaining headcount create risk? A1: A significant number of personnel in the staffing-type business have resigned, and only those who can demonstrate capabilities to assure quality in an integrated manner with development remain. We are not carrying excess headcount, and the structural reform is complete. Also, in April 2026, NRI Australia and Planit were integrated and are already being operated as one. Q2: You explained that Consulting in the fourth quarter of FY March 2026 saw a decline in profit due to lower utilization caused by a shortage of projects. Doesn’t that contradict 4 / 8 These materials were prepared for the sole purpose of providing information to use as reference in making investment decisions, and are not intended as a solicitation for investment. Copyright（C） Nomura Research Institute, Ltd. All rights reserved.

the narrative that AI Consulting is booming? What is the actual momentum? A2: In FY March 2026, factors such as the impact of U.S. reciprocal tariffs led to very large variations in demand by client. While we have many experts across industries, in the fourth quarter of FY March 2026 we were not able to sufficiently shift resources to areas with robust demand, resulting in an uneven distribution of utilization. Through the organizational reform and personnel transfers in April 2026, we have put in place a structure that enables agile resource shifts. Q3: Regarding domestic orders received in the fourth quarter of FY March 2026, please provide (as was explained) a sense of scale of large government agency projects in the Consulting segment, and also the background to the IT Infrastructure segment’s growth remaining in the single digits. A3: Government agency projects in Consulting were on the scale of several billions of yen, resulting in an order intake that was somewhat high. As for IT Infrastructure, there was a large project order in product sales in mid-single-digit billions of yen in the fourth quarter of FY March 2025; please understand the single-digit percentage increase as growth after absorbing the rebound from that. Q4: I would like to ask about the operating profit target of 200 billion yen in the Medium-Term Management Plan 2028. This seems like a level that could be achieved even without production innovation. Is this a message that you will proactively make investments such as R&D, or is it simply conservative? A4: This is our minimum commitment, and please understand it as conservative. In order to strengthen competitiveness in the AI era, a certain level of upfront, investment-type expenses—including R&D—will be necessary, and the figure reflects a conservative estimate that also takes that balance into account.

Fifth inquirer (Analyst) Q1: I would like to ask about the operating margin target in the Medium-Term Management Plan 2028. Under the Medium-Term Management Plan 2028, you plan investments of 240 billion yen including R&D. Will there be items that hit the P/L from FY March 2027, thereby suppressing operating margin? A1: The 240 billion yen investment plan includes R&D, but we are not planning to significantly 5 / 8 These materials were prepared for the sole purpose of providing information to use as reference in making investment decisions, and are not intended as a solicitation for investment. Copyright（C） Nomura Research Institute, Ltd. All rights reserved.

increase headcount engaged in R&D, and it is not something that will significantly worsen the P/L. Q2: Please explain how you position the Medium-Term Management Plan 2028. It appears that you set targets so as not to exceed the operating profit amount implied by the Long-term Vision V2030 of (over) 1 trillion yen in revenue and (at least) 20% operating margin. How do you view the positioning of the Medium-Term Management Plan 2028 within V2030? A2: We will steadily aim to realize the qualitative targets set forth in V2030. While we aim to achieve over 1 trillion yen in revenue as a numerical image under V2030, we will not pursue overseas revenue of over 250 billion yen at all costs; rather, we will firmly grow the domestic business and aim for over 1 trillion yen in total. V2030 set a target of operating margin of 20% or higher, and the Medium-Term Management Plan 2028 is a plan to aim for a higher level than that. Q3: Please explain your thinking behind the 70 billion yen share repurchase. You said you will execute it flexibly while watching the share price level, but how should we think about share repurchases after FY March 2028? A3: The main purpose is to achieve the ROE target of around 25% under the Medium-Term Management Plan 2028 and enhance shareholder returns. We estimate that our medium- to long-term cash flows will remain sound, and we believe we can maintain an ROE level of around 25% if we execute share repurchases of approximately 100 billion yen over the three years of the Medium-Term Management Plan. “Flexibly” means that, while taking into account the balance with future growth investments and shareholder returns at each point in time, we will implement the optimal measures.

Sixth inquirer (Analyst) Q1: Domestic operating margin for FY March 2027 would be around 23.6% when backcalculating with overseas at break-even. Likewise, domestic operating margin in the final year of the Medium-Term Management Plan 2028 would be around 23.4%, which makes it look like you are not assuming any improvement at all in the second and third years. Isn’t this plan overly conservative? A1: We understand your calculation logic, but we are building our company-wide plan while taking various risks into account, and figures back-calculated from partially explained numbers do not necessarily match the plan we hold internally. As we steadily improve 6 / 8 These materials were prepared for the sole purpose of providing information to use as reference in making investment decisions, and are not intended as a solicitation for investment. Copyright（C） Nomura Research Institute, Ltd. All rights reserved.

productivity, we have a plan to raise domestic operating margin. Q2: While the revenue growth rate in the Medium-Term Management Plan 2028 is around 5% CAGR and exceeds the revenue growth rate in your FY March 2027 earnings forecast, the pace of operating margin improvement is planned to slow over the next three years. This seems different from how NRI has constructed prior medium-term plans; what is the background? A2: The operating profit target of 200 billion yen has been set quite conservatively. The increase from the FY March 2027 profit amount may appear small, but if there is upside while we monitor how production innovation effects emerge, we will revise upward. Q3: Does break-even for the overseas business in FY March 2027 mean you plan to offset losses at other companies with profits from AUSIEX? It would not be a good look if lossmaking companies remain; are you considering liquidation or withdrawal going forward? A3: Since we are integrating the Australian business companies, please understand that it will become difficult to provide explanations by company going forward. Looking at the Australian business overall, we are not planning for it to be loss-making in FY March 2027. On the other hand, we consider it somewhat challenging to target a return to profitability in North America in FY March 2027.

Seventh inquirer (Analyst) Q1: Please explain the direction of the overseas business. After achieving revenue of 120 billion yen and an operating margin of 5% in three years, will you seek expansion again, or will you keep it as a stable business at a modest scale? A1: We strongly feel the risk of relying only on the Japanese market. In Japan, we believe strong demand will continue for another 10 to 15 years, but given the population decline, there will be limits to sustaining growth domestically alone. Over the long term, we want the overseas business to be positioned to drive growth for the NRI Group, and while we are struggling now, we are working hard to build a foundation. Whether we can immediately shift into an aggressive expansion stance once we reach the target level will need to be assessed, including qualitative aspects. We are still in the process of putting things in place through trial and error, including developing talent on the Japan side and strengthening management structures, and we would like to identify the timing to shift into an expansion stance after assessing the situation in each country.

7 / 8 These materials were prepared for the sole purpose of providing information to use as reference in making investment decisions, and are not intended as a solicitation for investment. Copyright（C） Nomura Research Institute, Ltd. All rights reserved.

Q2: I would like to ask about the domestic workforce structure after 2030. If AI accelerates downstream processes, it seems possible to grow without expanding headcount the way you have in the past. How do you think about this? A2: Our basic policy remains unchanged: headcount growth will be several percentage points lower than the top-line growth rate, and the difference will come from productivity improvements. We formulate workforce plans based on demand outlooks and productivity improvements. We are not thinking of increasing headcount on the same curve as in the past. We will emphasize the quality of talent and proceed while balancing productivity improvements and business expansion.

8 / 8 These materials were prepared for the sole purpose of providing information to use as reference in making investment decisions, and are not intended as a solicitation for investment. Copyright（C） Nomura Research Institute, Ltd. All rights reserved.