Speaker 0
Thank you for joining our earnings results presentation. I am Hashimoto, CFO. Today, I will first explain our results for Quarter 1 of Fiscal Year 2026. After that, Mr. Onishi will explain Bill 1. Please see page 4. First, I will explain the highlights of the Quarter 1 results. First, net sales increased 20.1% year-over-year, maintaining solid growth. Consolidated ARR reached 52.1 billion yen as of the end of August 2026. Second, adjusted operating profit increased substantially by 328.3% year-over-year, and profit generation advanced further. Progress against our full-year Third, Bill 1, our accounting AX solution, continued its high growth, and net sales performed strongly, up 34.4% year-over-year. Operating results for the company as a whole are as shown on page 5. Net sales grew solidly, up 20.1% year-over-year. Gross profit margin remained at a high level of 87.6%. I will explain the details of adjusted operating profit. Please turn to page 6. First, gross profit increased as net sales grew solidly, and the cost of sales ratio was kept at a low level. Next, among SG&A expenses, personnel expenses increased by 381 million yen, but their ratio to net sales declined by 4 percentage points. Advertising expenses decreased by 677 million yen compared with the same period of the previous year when we conducted major promotions, and their ratio to net sales declined by 7.5 percentage points. As a result, the adjusted SG&A expense ratio declined by 12.4 percentage points year-over-year, and adjusted operating profit increased substantially. Please turn to page 7 for an overview by segment. In the Sansan Bill 1 business, net sales grew solidly. Adjusted operating profit increased substantially by 306.3% year-over-year, with Bill 1 turning profitable, making a major contribution. The 8 business continued to deliver strong sales growth. For adjusted operating profit, we continued to record a loss due to investments for growth in H2 and beyond. Next, I will explain the segment details starting from page 8. Net sales in the Sansan Bill 1 business increased 18.4% year-over-year. By service, Sansan increased 9.8% year-over-year, and Bill 1 increased 34.4%. Others include the results of the Contract Management, AX Solution, Contract 1, and our group company, NineOut, Inc. Of these, Contract Contract 1. Net sales increased 93.4% year-over-year, and the number of subscriptions increased 81.6% from the end of the same period of the previous year to 841, continuing its high growth. Adjusted operating profit increased substantially by 306.3% year-over-year. By breakdown, adjusted operating profit for Sansan alone increased 34.4% year-over-year, and profit for Bill 1 alone was 198 million yen, its first profit on a quarterly basis. I will explain Sansan's results and KPIs on page 9. Net sales in quarter 1 increased 9.8% year-over-year. Growth that was somewhat sluggish, but recurring sales, The sales, which is a more important indicator for understanding performance, grew solidly, up 12.1% year-over-year, as shown on the left side of the slide. The main factor behind the slower growth in net sales was a 19.8% year-over-year decrease in Sansan's other sales. These other sales consist mainly of initial sales related to new subscriptions, and it tends to fluctuate from quarter to quarter, depending on the size of the subscriptions acquired and the timing of revenue recognition. In addition, as shown in the center graph in quarter one, the number of subscriptions increased 13.7% year over year, and the net quarterly increase was a solid 381. At the same time, new subscriptions were mainly from small customers, and as a result, initial sales fell below the same period of the previous year. More recently in September, we completed the official release of AI Search, a new feature, and from quarter two, we began full-scale sales activities to strengthen proposals for the standard license, so we expect to win solid new orders from H2. Net sales growth in Q1 ended up below 10%, the lower end of the range of our full-year earnings forecast. However, in light of the current situation, there is no change to our full-year outlook. In addition, the average monthly churn rate for the last 12 months, shown on the right, was 0.54%, remaining at a low level of less than 1%. Next, I will explain the Bill 1 KPIs on page 10. In the graph on the left, MRR in August 2026 was 1,311 million yen, up 33% year-over-year. Next, in the center graph, the number of paid subscriptions increased 28.6% year-over-year, and monthly recurring sales per paid subscription Mr. Onishi will explain the details after this. Next, I will explain the 8 business. by our achieving full-year profitability for two consecutive fiscal years so far, and we are strengthening our staffing structure and taking other steps for future growth. As a result, in Q1, the adjusted operating loss widened somewhat year-over-year, but we expect to be profitable for the full year. Next, I will explain our medium-term financial policy and the earnings forecast for fiscal year 2026. Please see page 13. First, regarding the medium-term financial policy, there is no change from what we announced in July this year, but I will go over the key points again. For net sales, our policy is a compound annual growth rate of 16% to 20% over the next three years and an adjusted operating profit margin of 25% to 30% in fiscal year 2028. Please see page 14. Quarter 1 results for both net sales and adjusted operating profit are progressing smoothly against the full-year earnings forecast, and there is no change to the forecast announced at the beginning of the fiscal year. In addition, because our business model is based on recurring sales, net sales accumulate as the quarters progress, and profit It also grows toward H2. Regarding dividends, we plan an annual dividend of 5 yen, consisting of an interim dividend of 2.5 yen and a year-end dividend of 2.5 yen. That concludes my explanation. Next, Mr. Onishi will explain Bill 1. I am Onishi, Bill 1 Division Head. From here, I will explain the services we currently offer for Bill 1, our accounting AX solution, and our initiatives Under the concept of redefine the unnecessary, transform how your company works, BillOne is an accounting AX solution that solves challenges in accounting operations such as invoice receipt, expense reimbursement, and accounts receivable management. By applying technology, including AI, to business processes involving vouchers such as invoices and receipts, we aim to change how not only the accounting department but the entire company works. Since BillOne began offering its service In 2020, it has continued to deliver high net sales growth. We started with invoice receipt and have since expanded the areas we offer in accounting operations to invoice issuance, corporate cards, expense reimbursement, and then accounts receivable management. More recently, we are also advancing the use of technology, including AI. In invoice receipt, we are not only receiving invoices and digitizing them, but also expanding the scope of automation to the The subsequent business processes, such as entry, matching, and approval. In this way, we are evolving the service on both fronts, by broadening the accounting operations we cover and by enhancing the value we provide in each operation through technology. First, Bill 1 Invoice Receive, which is currently the core of our business. With Bill 1, we receive on behalf of customers' invoices that arrive by various means, such Such as postal mail and email accurately digitize and structure their content and enable centralized management. This leverages the technology and expertise we have cultivated at Sansan in accurately digitizing analog information. Being able to generate accurate invoice data, in other words, primary data, in this way is a major strength of Bill 1. Currently, starting from digitizing received invoices, we cover the subsequent processes of entry, matching approval and voucher storage all the way through, and automation using AI and other technologies is also advancing. Use of these features is expanding steadily, and the number of companies using automation features, starting with AI automatic matching, has exceeded 200. In addition, against the backdrop of this feature expansion, the new pricing plan for which we began proposals in June is also ramping up steadily. In recent new orders, approximately Currently, 90% of customers who ordered under the new pricing plan signed up for the standard edition or higher, which allows use of the new features using AI, and we have gained a certain level of traction in proposals under the new pricing plan. Going forward, we will continue to leverage our strength in accurately digitizing invoices and use technology, including AI, to expand the areas in invoice processing where things can be eliminated. Next is bill one expense. In traditional expense reimbursement, the business process generally presumes that employees pay expenses out of pocket and then submit receipts to be reimbursed. In this case, in addition to creating financial and psychological burdens on employees, the workload of the accounting department also increases because applications concentrate at the end and beginning of each month. Approvers and accounting staff also have to handle tasks, such as checking application details and vouchers, and returning applications for correction. To address these challenges, a major feature of Bill1Expense is that, in addition to the functions of a typical expense reimbursement system, it also offers, as an integrated package, a corporate card specialized for expense reimbursement. By using the Bill1Business card, which we issue ourselves, we aim not only to make expense reimbursement more efficient, but also to eliminate out-of-pocket expenses by employees altogether. Specifically, we issue the Bill 1 business card to all employees and switch from out-of-pocket payments to payments by corporate card. Because the usage limit for each card can be set easily according to the content of the advance application, employees can use only the amount they need, when they need it, and it is also possible to control the risks associated with all employees using corporate cards. After payment, card usage statements are reflected immediately, and submitted receipts are digitized with 99.9% accuracy. Furthermore, by automating the matching of receipts against card usage statements and checks based on laws and regulations, and each company's rules, we will reduce the checking and returning tasks not only for applicants, but also for approvers and accounting staff. At companies that have already adopted it, there are cases where petty cash management and out-of-pocket expenses were abolished, reducing on-site workload by 100 hours per month and shortening the monthly closing by five days, as well as cases where the workload of the accounting department related to expense reimbursement was reduced to one-third. In this way, Bill1Expense is a service that not only makes expense reimbursement more efficient, but also changes the business process itself from payment to expense processing. Recently, we have steadily won new subscriptions every month, mainly from existing customers, and are expanding at a steady pace. Next is Bill1AccountsReceivable. In companies' accounts receivable management, many analog tasks remain even after an invoice is issued. Among them, the heaviest burden is payment reconciliation, which links the billed amount to the actual payment received. In actual bank transfers, the name of the remitter may differ from the name of the customer, and differences may arise between the billed amount and the received amount because of transfer fees and other reasons. So, simple system matching cannot process them, and these tend to remain tasks requiring human checking and judgment. In addition, because payment status cannot be grasped in real-time, there are cases where checking work arises between the accounting department and departments such as sales. With Bill1 accounts receivable, by connecting everything from creating and issuing invoices through payment reconciliation and management of unpaid amounts in a single service, we are making accounts receivable management operations more efficient and automated. What makes this possible is real-time payment reconciliation using Bill1 Bank. We assign a unique virtual account to each business partner, and by reflecting that account information on the invoice when it is issued, we accurately link payment information with receivables information. Then each time a payment is made to BillOneBank, we automatically obtain the payment data and perform reconciliation in real time. Even in cases where the amounts do not match, we will expand the scope that can be automated by learning the patterns of discrepancies processed in the past. At companies that have already adopted it, there are cases where approximately 80% of payment reconciliation was automated, as well as cases where approximately 90% was automated, and the workload was reduced to one-sixth. In this way, by connecting everything from invoice issuance through payment reconciliation and management of unpaid amounts into a single flow, we will eliminate the analog tasks and checking tasks that depend on individuals in accounts receivable management. Bill 1 accounts. Receivable is also expanding steadily at present. I will explain the revenue model for Bill 1 expense and Bill 1 accounts receivable. The basic pricing structure is the same as Bill 1 invoice receive, based on an annual usage fee, according to usage, and consists of three additions, namely light, standard, and advanced. In addition, for Bill 1 expense, we We ourselves are the issuer of the Bill 1 business card, so we also have a model in which we can earn fee revenue according to card payment amounts. For small and medium enterprises, we also offer the suite license, which allows use of Bill 1 invoice receive and Bill 1 expense, among others, as a set of multiple features. In this way, in addition to expanding use of each individual service, we aim to broaden the revenue opportunity per customer by promoting use of multiple services. Finally, I will talk about room for future growth. As explained so far, starting with invoice receipt, BillOne is expanding the areas it offers in accounting operations to expense reimbursement and accounts receivable management. The current number of BillOne paid subscriptions is 5,468. In addition, the BillOne Invoice Network, which includes not only paid subscribers, but also free subscribers and companies that send invoices to BillOne users. has expanded to approximately 278,000 companies. On the other hand, there are approximately 2 million companies in Japan. So there is room for further expansion in both paid subscriptions and the invoice network. Given this situation, we believe Bill 1 has two major growth opportunities. One is expanding the revenue opportunity per company by broadening the areas we cover in accounting operations. The other is expanding the number of paid subscribing companies in the potential market of approximately 2 million companies in Japan, and expanding the invoice network, which could also become a future revenue opportunity. Going forward as well, we will continue to leverage technology to further broaden the areas we cover in accounting operations and aim for further growth of Bill 1 as an accounting AX solution that changes how the entire company works. That concludes my explanation of the Bill 1 service.
