Message from Takayuki Funahashi, President and CEO of Insource Co., Ltd. – Explanation on Our Business and Performance for the First Quarter of the Fiscal Year Ending September 2026

Overview of the First Quarter Results for the Fiscal Year Ending September 2026

Although net sales increased 7% compared to the same period last year, they fell short of the plan by 200 million yen. Operating income declined 4% year-over-year, missing the target by 220 million yen. Key factors included a lack of proposals biased toward digital-related needs of large corporations, a reduction in the number of public courses offered resulting in sluggish participant growth, and the considerable time required for on-the-job training (OJT) of new sales personnel. Additionally, increased personnel expenses contributed to the decline in operating income. The video and e-learning business saw a 5% year-over-year increase in gross profit due to price revisions.

Future Measures and Initiatives by Business Segment

An urgent sales countermeasure team was established to strengthen new customer acquisition efforts. Proposal amounts were added as a KPI, achieving 1.8 times the proposal amount compared to the previous term in 1Q. A sales system utilizing generative AI was introduced to enhance proposal capabilities. In the instructor dispatch training segment, the proposal system for large corporations was reinforced to aim for growth recovery in the DX field. Public courses will improve convenience and profitability by increasing the number of sessions and revising prices. The IT services business targets sales growth by implementing AI functions, while the public sector focuses on maintaining large projects and acquiring smaller ones. For the medium-term plan, growth is expected by increasing AI-related personnel and leveraging the strengths of existing educational services.