Alue (7043) Q2 FY2026 Earnings Deep Dive: Record-High Profits Driven by Core Corporate Training Expansion and Cost Optimization

Alue Co., Ltd. (Securities Code: 7043) delivered exceptionally strong results for the second quarter of the fiscal year ending December 2026 , with both net sales and operating profit reaching record highs for the first half of the year, fueled by significant growth in its core corporate training business.

This report provides a comprehensive analysis of the earnings highlights, shifts in revenue structure, trends in segment-specific KPIs, business structural reforms such as the withdrawal from its Chinese subsidiary, and progress against full-year earnings forecasts.

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1. Consolidated Earnings Highlights: Record Q2 Net Sales and Operating Profit

For the first half of the fiscal year ending December 2026, consolidated results were as follows: net sales of 1,983 million yen (+14.3% YoY) , operating profit of 322 million yen (+176 million yen, +120.9% YoY) , ordinary profit of 324 million yen (+116.3% YoY) , and net profit attributable to owners of the parent of 146 million yen (+65.3% YoY) .

The graph below illustrates the trend in cumulative Q2 net sales and operating profit over the past several years.

[Commentary and Significance of Slide 10]

The performance trend slide above provides critical data demonstrating the company's growth momentum and dramatic improvement in profitability.

• Steady Growth in Net Sales : From 752 million yen in Q2 2020, sales have followed a continuous upward trend, reaching a record 1,983 million yen in Q2 2026. This is driven by growth in existing businesses and contributions from newly acquired subsidiaries (such as Quintegral).
• Significant Surge in Operating Profit : The company has successfully pivoted from a temporary operating loss in Q2 2024 (-57 million yen) to 146 million yen in Q2 2025, and further to 322 million yen in Q2 2026.
• Structural Profitability Improvement : The growth in operating profit (+120.9%) significantly outpaced the growth in sales (+14.3%), highlighting the synergy between increased marginal profit and effective fixed cost control (cost optimization).

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2. Revenue Structure Analysis: Improved Gross Margin and SG&A Efficiency

The primary drivers of this profit growth can be broken down into two factors: increased gross profit and containment of the SG&A ratio .

Quarterly gross profit reached 1,261 million yen (up from 1,087 million yen in the same period last year) , with the gross profit margin improving to 63.6% (+1.0pt YoY) . This is attributed to an increase in high-margin projects within the core domestic classroom training business.

Specific factors contributing to the change in operating profit can be examined in the variance analysis slide below.

[Commentary and Significance of Slide 16]

This quarterly operating profit variance analysis slide clearly outlines the "176 million yen profit increase" from 146 million yen in the previous year to 322 million yen in the current period.

• Increase in Gross Profit (+173 million yen) : Sales expansion, primarily in domestic classroom training, directly contributed to higher gross profit.
• Control of Personnel and Recruitment Costs (+7 million yen) : Despite factors such as the addition of subsidiaries, cost increases were contained through efficient staffing and recruitment management.
• Reduction in Operating Expenses (+14 million yen) : Cost optimization measures have borne fruit, following reviews of outsourcing fees, supplies, and communication costs.
• Lower SG&A Ratio : Total SG&A expenses remained nearly flat at 938 million yen (compared to 941 million yen in the previous year, -0.3%), resulting in the SG&A-to-sales ratio dropping by 6.9pt from 54.2% to 47.3% . The company has shifted to a structure where revenue growth more easily translates into profit.

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3. Business Trends and Key KPI Progress

(1) Corporate Training Business (Core Segment)

The corporate training business performed exceptionally well, with net sales of 1,730 million yen (+19.0% YoY) , segment operating profit (before common cost allocation) of 733 million yen (+43.7% YoY) , and operating profit after common cost allocation of 435 million yen (+70.6% YoY) .

Key KPIs for the non-consolidated business are as follows:

• Number of Clients : Increased from 291 to 320 .
• Sales per Client : Rose from 4,417 thousand yen to 4,706 thousand yen .
• Unit Price for Existing Clients : Rose from 5,012 thousand yen to 5,349 thousand yen .
• New Client Acquisition : Acquired 68 new clients, with unit prices rising from 1,959 thousand yen to 2,338 thousand yen (contributed by large-scale projects).
• Sales per Employee (Productivity) : Significantly improved from 12,479 thousand yen to 15,060 thousand yen (with headcount remaining flat at 100 at the start of the period).

In particular, the company leveraged its strength in the new employee training sector , which is concentrated in the April-June period, capturing the rising corporate appetite for human capital investment.

(2) etudes Business (Cloud-based LMS/e-Learning)

Net sales for the etudes business were 217 million yen (-1.2% YoY) . While the conclusion of a large-scale contract led to a slight decline, the company is focusing on functional enhancements. During the period, an "AI Feedback Function" was added to e-learning for new hires and prospective employees, providing high-quality feedback based on the company's proprietary learning materials.

(3) Global/Subsidiary Trends and Withdrawal from China (Extraordinary Loss)

While Quintegral and Quintegral Philippines are contributing to group performance, a decision was made to withdraw from the Chinese subsidiary (Shanghai, etc.) . Given the shrinking market for human resource development for Japanese companies due to the "localization" of Japanese firms in China, the company decided to exit early to concentrate management resources.

• Extraordinary Loss : Recorded a one-time cost of 63 million yen.
• Structural Improvement Effect : The operating loss of the Chinese entity (-33 million yen in FY2025) will be eliminated from the next fiscal year, contributing to an improvement in the group's overall operating margin. The impact of the extraordinary loss is absorbable by profit growth in other businesses, and there is no change to the full-year earnings forecast.

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4. Seasonality, Full-Year Forecasts, and Dividend Policy

Due to the concentration of corporate new employee training in April, the company's business has a seasonal characteristic where sales and profits are highest in the second quarter (April-June) . Q2 operating profit alone reached 444 million yen , meaning the majority of annual profit is generated in this quarter.

Progress against the full-year consolidated earnings forecast and the dividend plan are shown in the slide below.

[Commentary and Significance of Slide 21]

This consolidated earnings forecast and dividend slide is a crucial comparison table showing the full-year outlook and shareholder return policy.

• Progress Against Full-Year Forecast : As of Q2, net sales reached 1,983 million yen (50.4% progress) , operating profit reached 322 million yen (78.9% progress) , and ordinary profit reached 324 million yen (80.5% progress) . This represents a very high rate of progress compared to historical seasonal trends.
• Policy to Maintain Earnings Forecast : Given the conservative estimates for the second half (Q3 and Q4) and the ability to absorb the extraordinary loss from the China withdrawal, the company is maintaining its initial full-year forecast (net sales of 3,934 million yen, operating profit of 409 million yen).
• Enhanced Shareholder Returns (Planned Dividend Increase) : With EPS expected to remain stable at 96.97 yen, the company plans a significant increase in the annual dividend per share from 7.00 yen in the previous year to 11.00 yen (planned, +51.7% YoY) .

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5. Summary and Future Outlook

Alue's Q2 FY2026 earnings were outstanding, marking record-high performance driven by higher unit prices and an increased number of clients in the core corporate training business , combined with SG&A optimization across the group .

Key points to watch moving forward include:

1. Sustainability of Project Acquisition in H2 : After the peak training demand in Q2, to what extent will mid-career/management training and stock-type/recurring services like etudes support H2 performance?
2. Profit Margin Improvement from China Withdrawal : How much will the operating margin rise from the next fiscal year once the extraordinary loss recorded this term is cleared?
3. Monetization of New AI-Powered Features : Will product differentiation, such as the AI feedback function in etudes, contribute to acquiring new and existing clients?

The company's future initiatives will be closely watched as it demonstrates a solid business foundation and strong cost-control capabilities.