Interim report
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Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Translation October 30, 2025 Consolidated Financial Results for the Fiscal Year Ended September 30, 2025 (Under Japanese GAAP) Company name: Mitsubishi Research Institute, Inc. Listing: Prime Market of the Tokyo Stock Exchange Securities code: 3636 URL: https://www.mri.co.jp/ Representative: Kenji Yabuta, President and Representative Director Inquiries: Kyoko Adachi, General Manager, Accounting and Finance Division E-mail: ir-info@ml.mri.co.jp Scheduled date of annual general meeting of shareholders: December 17, 2025 Scheduled date to commence dividend payments: December 18, 2025 Scheduled date to file annual securities report: December 10, 2025 Preparation of supplementary material on financial results: Yes Holding of financial results briefing: Yes (for institutional investors and analysts) (Yen amounts are rounded down to millions, unless otherwise noted.) 1. Consolidated financial results for the fiscal year ended September 30, 2025 (from October 1, 2024 to September 30, 2025) (1) Consolidated operating results (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Fiscal year ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % September 30, 2025 121,458 5.3 8,010 13.5 9,734 19.5 6,386 27.6 September 30, 2024 115,362 (5.5) 7,060 (18.7) 8,147 (18.5) 5,003 (20.4) Note: Comprehensive income For the fiscal year ended September 30, 2025: ¥7,717 million [34.9%] For the fiscal year ended September 30, 2024: ¥5,719 million [(27.0%)] Basic earnings per share Diluted earnings per share Return on equity Ratio of ordinary profit to total assets Ratio of operating profit to net sales Fiscal year ended Yen Yen % % % September 30, 2025 405.55 － 9.2 7.9 6.6 September 30, 2024 316.44 － 7.5 6.9 6.1 Reference: Share of profit (loss) of entities accounted for using equity method For the fiscal year ended September 30, 2025: ¥1,332 million For the fiscal year ended September 30, 2024: ¥619 million (2) Consolidated financial position Total assets Net assets Equity-to-asset ratio Net assets per share As of Millions of yen Millions of yen % Yen September 30, 2025 128,113 81,346 56.1 4,566.65 September 30, 2024 119,732 76,373 56.5 4,296.49 Reference: Equity As of September 30, 2025: ¥71,923 million As of September 30, 2024: ¥67,630 million
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(3) Consolidated cash flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period Fiscal year ended Millions of yen Millions of yen Millions of yen Millions of yen September 30, 2025 6,422 (4,005) (3,008) 30,010 September 30, 2024 13,535 (2,906) (4,938) 30,627 2. Cash dividends Annual dividends per share Total cash dividends (Total) Payout ratio (Consolidated) Ratio of dividends to net assets (Consolidated) First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Millions of yen % % Fiscal year ended September 30, 2024 － 80.00 － 80.00 160.00 2,566 50.6 3.8 Fiscal year ended September 30, 2025 － 80.00 － 85.00 165.00 2,647 40.7 3.7 Fiscal year ending September 30, 2026 (Forecast) － 80.00 － 85.00 165.00 44.8 3. Consolidated earnings forecasts for the fiscal year ending September 30, 2026 (from October 1, 2025 to September 30, 2026) (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % yen Fiscal year ending September 30, 2026 122,000 0.4 7,500 (6.4) 9,000 (7.5) 5,800 (9.2) 368.26
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* Notes (1) Significant changes in the scope of consolidation during the period: None (2) Changes in accounting policies, changes in accounting estimates, and restatement (i) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (iv) Restatement: None (3) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) As of September 30, 2025 16,044,000 shares As of September 30, 2024 16,424,080 shares (ii) Number of treasury shares at the end of the period As of September 30, 2025 294,167 shares As of September 30, 2024 683,251 shares (iii) Average number of shares outstanding during the period Fiscal year ended September 30, 2025 15,747,084 shares Fiscal year ended September 30, 2024 15,811,442 shares Note: For information on the number of shares used as the basis for calculating basic earnings per share (consolidated), please refer to “5. Consolidated financial statements and significant notes thereto (5) Notes to consolidated financial statements (Per share information)” on page 25 of the attached materials. [Reference] Overview of non-consolidated financial results 1. Non-consolidated financial results for the fiscal year ended September 30, 2025 (from October 1, 2024 to September 30, 2025) (1) Non-consolidated operating results (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit Fiscal year ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % September 30, 2025 44,179 3.6 3,312 37.6 5,054 4.4 3,546 (8.5) September 30, 2024 42,625 (10.8) 2,406 (1.4) 4,842 (4.3) 3,877 (8.2) Basic earnings per share Diluted earnings per share Fiscal year ended Yen Yen September 30, 2025 225.19 － September 30, 2024 245.21 － (2) Non-consolidated financial position Total assets Net assets Equity-to-asset ratio Net assets per share As of Millions of yen Millions of yen % Yen September 30, 2025 63,205 47,121 74.6 2,991.85 September 30, 2024 60,821 45,835 75.4 2,911.91 Reference: Equity As of September 30, 2025: ¥47,121 million As of September 30, 2024: ¥45,835 million
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* Financial results reports are exempt from audit conducted by certified public accountants or an audit firm. * Proper use of earnings forecasts, and other special matters (Caution regarding forward-looking statements, etc.) The earnings forecast is made based on information available at the time of publication of this document. The Company does not guarantee that it will achieve the forecast results. Actual sales and profits may differ from the forecast results due to uncertainties inherent in the forecast and changes in business conditions, among other factors. For information on assumptions underlying the business forecasts and other related information, please refer to “1.Overview of operating results and others, (4) Outlook for the next fiscal year” on page 4. (Availability of supplementary material on financial results) The supplementary material for quarterly results is posted on the Company’s website.
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- 1 - Table of Contents of the Attached Materials 1. Overview of operating results and others ...................................................................................................................... 2 (1) Overview of operating results for the fiscal year under review ............................................................................... 3 (2) Overview of financial position for the fiscal year under review .............................................................................. 3 (3) Overview of cash flow position for the fiscal year under review ............................................................................ 3 (4) Outlook for the next fiscal year ............................................................................................................................... 4 (5) Basic policy on profit distribution and dividends for the fiscal year under review and next fiscal year .................. 5 2. Group companies .......................................................................................................................................................... 6 3. Management policy ....................................................................................................................................................... 8 (1) Management policy ................................................................................................................................................. 8 (2) Management strategy ............................................................................................................................................... 9 (3) Objective indicators to assess performance versus management targets, etc. .......................................................... 11 (4) Operating environment ............................................................................................................................................ 11 (5) Business and financial issues to be addressed ......................................................................................................... 12 4. Basic approach to selection of accounting standard ...................................................................................................... 13 5. Consolidated financial statements and significant notes thereto ................................................................................... 14 (1) Consolidated balance sheets .................................................................................................................................... 14 (2) Consolidated statements of income and consolidated statements of comprehensive income .................................. 16 (3) Consolidated statements of changes in net assets .................................................................................................... 18 (4) Consolidated statements of cash flows .................................................................................................................... 20 (5) Notes to consolidated financial statements .............................................................................................................. 22 (Notes on going concern assumption) .................................................................................................................... 22 (Notes on changes in accounting policies) ............................................................................................................. 22 (Additional information) ........................................................................................................................................ 22 (Notes on segment information, etc.) ..................................................................................................................... 23 (Per share information) .......................................................................................................................................... 25 (Significant subsequent events) .............................................................................................................................. 25 6. Non-consolidated financial statements ......................................................................................................................... 26 (1) Non-consolidated balance sheets ............................................................................................................................. 26 (2) Non-consolidated statements of income .................................................................................................................. 28 (3) Non-consolidated statements of changes in net assets ............................................................................................. 29 7. Status of orders received and sales ............................................................................................................................... 31 (1) Status of orders received .......................................................................................................................................... 31 (2) Sales performance .................................................................................................................................................... 31
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- 2 - 1. Overview of operating results and others (1) Overview of operating results for the fiscal year under review The fiscal year under review (from October 1, 2024 to September 30, 2025) is the second year of the Medium-Term Management Plan 2026 (“MP2026”), and we are at the halfway point of the overall MP2026 period. Under MP2026, we aim to achieve growth by enhancing the three values of financial, non -financial, and social value in accordance with the MRI Group’s management philosophy, as well as by scaling up through growth of the DX business, improving profitability through quality reform of core businesses, and accelerating the transformation of our business portfolio by fostering and expanding next-generation businesses. Specifically, the initiatives we are pursuing include the advancement of administrative DX for the public sector, support tha t combines DX consulting with the cloud shift and digital marketing that uses analyses of big data for the private sector, as w ell as the expansion of business domains and customer bases for the financial sector. In the fiscal year under review, we have been bolstering personnel and productivity in the Think Tank & Consulting Services (TTC) segment and working on a process of selection and concentration regarding new businesses on the basis of issues identified in the first fiscal year of MP2026, namely the previous fiscal year. In addition, in the IT Services (ITS) segment, we have been strategically deploying staff while bolstering mainstay businesses and improving the profit margin. In our consolidated financial results for the six months ended March 31, 2025, we reported lower profits, reflecting delays i n receiving TTC orders and a rise in additional expenses associated unprofitable projects in the ITS segment; however, from the third quarter, sales grew due to strong orders received in both the TTC and ITS segments. In the TTC segment, we maintained a high operation rate and measures such as the redeployment of personnel and reduction of expenses paid off, while in the ITS segment, the profit margin improved, reflecting the winding down of unprofitable projects and a profit boost related to retirement benefits. As a result, in the fiscal year under review, the MRI Group recorded net sales of 121,458 million yen (up 5.3% year on year), operating profit of 8,010 million yen (up 13.5% year on year), ordinary profit of 9,734 million yen (up 19.5% year on year), and profit attributable to owners of parent of 6,386 million yen (up 27.6% year on year). The results in each segment are as follows. <Think Tank & Consulting Services> For the fiscal year under review, net sales (sales to outside clients) amounted to 47,090 million yen (up 3.7% year on year), reflecting the contributions of ICT -related projects (cyber security, DX in the healthcare sector, etc.) for government agencies and projects related to systems and operations supporting business strategies for private companies in the energy, transportation and IT sectors, which more than offset the impact of the completion of large -scale projects recorded in the previous fiscal year. Ordinary profit was 5,715 million yen (up 34.9% year on year), mainly due to an increase in the share of profit of entities accounted for using the equity method (non-operating income), in addition to effect of increased sales. <IT Services> In the fiscal year under review, net sales (sales to outside clients) stood at 74,367 million yen (up 6.3% year on year), reflecting growth in system projects for the public sector and payment -related projects in the financial and credit card sectors. Ordinary profit was 4,037 million yen (up 3.3% year on year), reflecting the positive contribution of actuarial differences as a result of a review of the discount rate used to determine retirement benefit obligations in addition to the effect of increased sales, wh ich more than offset the negative im pact of unprofitable projects in the first half and the recording of expenses related to the head office relocation of Mitsubishi Research Institute DCS Co., Ltd.
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- 3 - (2) Overview of financial position for the fiscal year under review Total assets at the end of the fiscal year under review increased by 8,380 million yen (up 7.0%) from the end of the previous fiscal year to 128,113 million yen. Of which, current assets stood at 79,487 million yen (up 7.0%) and non-current assets were 48,625 million yen (up 7.0%). The increase in current assets reflects a rise of 3,435 million yen in contract assets as a result of increased sales. The increase in non-current assets was mainly attributable to a rise of 581 million yen in buildings and structures and an increase of 1,131 million yen in construction in progress primarily due to the head office relocation of Mitsubishi Research Institute DCS Co., Ltd. and the expansion of data center facilities, and an increase of 921 million yen in investment securities due to their market valuation. Liabilities rose 3,407 million yen (up 7.9%) from the end of the previous fiscal year, to 46,766 million yen. This chiefly reflects an increase of 1,105 million yen in accounts payable - trade and 1,488 million yen in provision for bonuses. Net assets climbed 4,973 million yen (up 6.5%) from the end of the previous fiscal year, to 81,346 million yen, mainly reflecting an increase in retained earnings of 1,934 million yen and a decrease in treasury shares of 1,925 million yen due to cancellation of treasury shares. The equity-to-asset ratio stands at 56.1%. (3) Overview of cash flow position for the fiscal year under review Cash and cash equivalents at the end of the fiscal year under review fell 617 million yen from the end of the previous fiscal year, to 30,010 million yen. The status of each cash flow category and the primary factors behind it are as follows. <Cash flow from operating activities> Cash flow from operating activities resulted in an inflow of 6,422 million yen (compared to a cash inflow of 13,535 million yen in the previous fiscal year). This primarily reflects 10,241 million yen in profit before income taxes and 3,465 million yen in depreciation, as well as an increase in provision for bonuses of 1,488 million yen, a share of profit of entities accounted for using equity method of 1,332 million yen , a gain on sales of investment securities of 1,541 million yen, an increase in accounts receivable - trade and contract assets of 2,338 million yen, a decrease in accrued expenses of 2,908 million yen, and income taxes paid of 2,691 million yen. This was a decrease in cash inflow of 7,112 million yen compared with the previous fiscal year, mainly reflecting an increase of 4,536 million yen for decrease (increase) in accounts receivable - trade and contract assets, a decrease of 4,396 million yen for increase (decrease) in accrued expenses, and an increase of 1,318 million yen in income taxes paid, partially offset by an increase of 2,259 million yen in profit before income taxes. <Cash flow from investing activities> Cash flow from investing activities resulted in an outflow of 4,005 million yen (compared to an outflow of 2,906 million yen in the previous fiscal year). This was mainly due to expenditures of 3,615 million yen for the purchase of property and equipment, expenditures of 2,782 million yen for the purchase of intangible assets, and proceeds from sales of investment securities of 2,427 million yen. This was an increase in cash outflow of 1,099 million yen compared with the previous fiscal year, mainly reflecting an increase of 2,258 million yen in expenditures for the purchase of property and equipment, which offset a decrease of 954 million yen in expenditures for payments of leasehold and guarantee deposits. <Cash flow from financing activities> Cash flow from financing activities resulted in an outflow of 3,008 million yen (compared to an outflow of 4,938 million yen in the previous fiscal year). This was primarily due to the payment of 2,564 million yen for dividends. Compared with the previous fiscal year, cash outflows decreased by 1,929 million yen, chiefly due to a decrease of 500 million yen in repayments of long-term borrowings, a decrease of 316 million yen in repayments of lease obligations, and a decrease of 1,034 million yen in purchase of treasury shares.
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- 4 - (4) Outlook for the next fiscal year In the next fiscal year, the Japanese economy will likely stay on a moderate recovery path, underpinned by domestic demand, primarily consumer spending, despite decline in exports under the impact of Trump’s tariffs. We expect that, with labor shortages being strongly felt, wage growth will be maintained and consumer spending will remain firm. Capital expenditure will likely continue expanding given strong needs for investment over the medium and long term in digital transformation (DX), green transformation (GX*1) and supply chain resilience among companies. However, attention needs to be paid to risk factors such as shifts in U.S. trade policies and deterioration of the situations in Ukraine and the Middle East. Higher levels of economic uncertainty overseas could pose downside risks to the Japanese economy, leading to a more cautious stance towards capital expenditure among companies, for instance. Despite such downside risks to the economy, the medium-to-long-term trend in Japan will likely still be a trend towards DX and GX initiatives. In response to rapidly increasing data center investment due to the use of generative AI and growing energy demand, the Japanese Government is promoting “Watt -Bitt collaboration (*2)” initiatives, and acceleration of investment for achieving both DX and GX is likely. According to research by the Ministry of Internal Affairs and Communications into the use of generative AI among Japanese companies, Japan still lags behind other countries and needs to catch up. There is a great deal of scope for companies to introduce AI agents, and it is predicted that there will be growing needs for consulting and soluti ons related to generative AI going forward. These trends are expected to act as a tailwind for Electric Power and Energy and Business Data Analytics and AI (BA/AI), which are among our priority areas. At the same time, we have been implementing MP2026, under which next fiscal year is the final fiscal year, and in light of ou r performance in the fiscal year under review, we have determined that we will struggle to achieve the financial targets under the plan. Accordingly, we will position next fiscal year as a year for rebuilding our businesses, in preparation to formulate the next Medium-Term Management Plan, starting from FY2027, including Vision 2030 on which MP2026 was based. In both the TTC and ITS segments, we will implement a strategy of selection and concentration and clarify and narrow down the areas in which we aim to generate synergy between the two segments. Through this, we will intensively invest the necessary resources in the areas where growth is expected in the future, and lay the foundations for steady growth moving forward. Based on the above, during the next fiscal year, the Group forecasts net sales of 122,000 million yen (up 0.4% year on year), operating profit of 7,500 million yen (down 6.4% year on year), ordinary profit of 9,000 million yen (down 7.5% year on year), and profit attributable to owners of parent of 5,800 million yen (down 9.2% year on year). In the TTC segment, we will strengthen Electric Power and Energy, Healthcare and Nursing Care, and Business Data Analytics and AI (BA/AI) as priority areas and will also focus on the themes of systems and policies and DX for government agencies, and management and DX for private-sector companies as areas where we can demonstrate our strength as a comprehensive think tank, while at the same time aiming to build an entire value chain from research & recommendations through to societal implementation. As regards the development of service businesses, we will continue expanding investment in promising areas such as energy and healthcare and making upfront investments for the exploration of seeds, etc. As a result, we forecast net sales (sales to outside clients) of 48,500 million yen (up 3.0% year on year), and ordinary profit of 5,300 million yen (down 7.3% year on year). In the ITS segment, we will take into account that large projects for the financial and credit card sectors that have driven our performance to date will be completed next fiscal year and will select and concentrate on priority domains based on an evaluation according to the three criteria of market environment, proposal capabilities, and the skills of our resources . With public and electric power projects and human resources and learning projects positioned as expansion areas in the industrial and public sectors and with financial projects and data and AI positioned as expansion areas in the financial and payment sectors, we wi ll allocate resources to these areas as a priorit y. As a result, we forecast net sales (sales to outside clients) of 73,500 million yen (down 1.2% year on year), and ordinary profit of 3,700 million yen (down 8.3% year on year). (*1) GX: Green Transformation. Refers to initiatives that position the transition to a renewable -energy centered industrial and social structure and the reduction of greenhouse gas emissions as growth strategies and aim to achieve a balance between protection of th e environment and economic growth. (*2) Watt-bitt collaboration: Meaning the integration of the electric power infrastructure (= watt) and the ICT infrastructure such as data centers and networks (= bitt) to address both rapidly increasing data center demand and electric power constraints.
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- 5 - Consolidated earnings forecasts for the fiscal year ending September 30, 2026 (Million yen) Fiscal year ended September 30, 2025 (Actual results) Fiscal year ending September 30, 2026 (Forecast) Change Amount Rate (%) Net sales 121,458 122,000 541 0.4 Think Tank & Consulting Services 47,090 48,500 1,409 3.0 IT Services 74,367 73,500 (867) (1.2) Operating profit 8,010 7,500 (510) (6.4) Ordinary profit 9,734 9,000 (734) (7.5) Think Tank & Consulting Services 5,715 5,300 (415) (7.3) IT Services 4,037 3,700 (337) (8.3) Profit attributable to owners of parent 6,386 5,800 (586) (9.2) Basic earnings per share (yen) 405.55 368.26 (37.29) (9.2) Note: Basic earnings per share is calculated using the average number of outstanding shares during the period. Average number of outstanding shares during the period Fiscal year ended September 30, 2025: 15,747 thousand shares Fiscal year ending September 30, 2026: 15,749 thousand shares The earnings forecast is made based on information available at the time of publication of this document. The Company does not guarantee that it will achieve the forecast results. Actual sales and profits may differ from the forecast results due to uncertainties inherent in the forecast and changes in business conditions, among other factors. (5) Basic policy on profit distribution and dividends for the fiscal year under review and next fiscal year MRI aims to achieve sustainable growth and increase its corporate value by contributing to the development of its customers and society and by creating value. MRI’s basic policy on shareholder returns is to maintain stable dividends, making decisions based on a comprehensive consideration of the balance between performance, future capital needs, and financial soundness. We aim for a consolidated payout ratio of 40%. Based on the above policy, we plan to pay a year-end ordinary dividend for the fiscal year under review of 85 yen. This, combined with the interim dividend of 80 yen, brings the annual dividend for the fiscal year under review to 165 yen per share. With regard to dividends for the next fiscal year, MRI expects to pay 80 yen per share for the interim cash dividend and 85 y en per share for the year-end cash dividend, which will bring the annual dividend to 165 yen per share.
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- 6 - 2. Group companies The MRI Group comprises 15 companies (nine consolidated subsidiaries) and five affiliates of MRI (three entities accounted fo r using equity method and two entities not accounted for using equity method), operating across two segments. One of these business segments is the “Think Tank & Consulting Services” segment, which comprises research and consulting services on public policies and ge neral business. The other is “IT Services,” which comprise software development, operation, and maintenance, together wit h information processing and outsourcing services. Think Tank & Consulting Services Since its founding, MRI has drawn on its knowledge of policies and systems, its ability to identify and analyze societal issu es, and its broad knowledge of next-generation technologies accumulated as a comprehensive think tank, as well as the quantitative analysis and evaluation techniques, prediction techniques and other analytical capabilities of its researchers specializing i n the field of science and technology, to provide research and consulting services. We provide the public sector with research and analysis, public policymaking and planning, consulting services, and business support in such social and public fields as national land development, transportation and traffic, ICT, regional management, healthcare, long -term care, welfare, and education, and in such science and technology policy fields as the environment, resources, energy, science and technology, and security. Meanwhile, we provide the private sector with consulting services in areas such as management and business strategy, marketing strategy, human resource policy and organizational reforms, sustainability management, and business innovation, as well as IT consulting for improving business competitiveness. (Names of main companies) Mitsubishi Research Institute, Inc. (MRI); consolidated subsidiaries MRI Business, Inc., MRI Research Associates, Inc., MPX, Inc., MRIA International Inc., and MRIV International LLC; and entities accounted for using the equity method Nippon Care Communications Co., Ltd., Japan Business Systems, Inc., and INES Corporation IT Services Mitsubishi Research Institute DCS Co., Ltd. (DCS), a subsidiary of MRI, plays a core role in providing software development, operation and maintenance together with information processing and outsourcing services in areas such as finance, manufacturing, lo gistics, services, and education, based on the knowledge and cutting -edge ICT technologies accumulated through the Think Tank & Consulting Services segment. We also offer complete support for the integration of IT into upstream and downstream management processes, including IT-based management system innovation and Internet-based business model innovation. Our outsourcing services consist of information processing services centered on the PROSRV payroll and human resources system offered by Mitsubishi Research Institute DCS Co., Ltd., and outsourcing and BPO (*) of core systems through the Chiba Information Center. (*) Business Process Outsourcing: Outsourcing certain business processes such as human resources, accounting and payroll - related processes to external specialist companies (Names of main companies) Consolidated subsidiaries Mitsubishi Research Institute DCS Co., Ltd., MRI Value Consulting & Solutions Co., Ltd., MD Business Partner Co., Ltd., and IT-One Co., Ltd.
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- 7 - [Business Structure] No mark: consolidated subsidiary *: Affiliate (entity accounted for using the equity method) Customers Provide services Provide services Provide services Provide services Think Tank & Consulting Services IT Services Provide system development and maintenance services Mitsubishi Research Institute, Inc. Provide research and consulting Mitsubishi Research Institute DCS Co., Ltd. Outsourcing, etc. Provide services Subcontracting MRI Business, Inc. MRI Research Associates, Inc. MPX, Inc. MRIA International Inc. MRIV International LLC (Note) Nippon Care Communications Co., Ltd.* Japan Business Systems, Inc.* INES Corporation* Outsourcing Provide services Provide system development and maintenance services MRI Value Consulting & Solutions Co., Ltd. MD Business Partner Co., Ltd. IT-One Co., Ltd.
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- 8 - 3. Management policy The forward-looking statements in the document are based on the judgment of the MRI Group as of the end of the fiscal year under review. (1) Management policy The MRI Group aims to create social value and overcome the challenges facing society through its business operations, with a goal of creating an abundant and sustainable world in the coming era, with a global population of 10 billion and lifespans of 100 years. In order to create a prosperous and sustainable world, we will tackle the challenges facing society by expanding and creating a cycle of value triad: social value, non -financial value, and financial value. The Group will seek to create and improve social value by enhancing customer value through business activities and resolving societal issues through co -creation with various partners. The basis for the realization of such social value is non-financial value consisting of human foundation, intellectual and co-creation foundation, and social trust foundation, which are the sources of the Group’s competitiveness. Financial value is the consideration that can be obtained through the provision of value to customers and the creation of social value, and we are committed to investing continuously for the next phase of growth. Through this cycle, the Group aims to grow in a sustainable manner and to sustain both the society and the Group itself. Based on the above management policy, the MRI Group has defined a total of six material issues from two aspects: Building a prosperous and sustainable world through our business, and achieving the sustainable growth of the Group.
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- 9 - <Building a prosperous and sustainable world through the Group’s business> Materiality Themes of the Group’s Initiatives Individual wellbeing Ensure health, self-fulfillment, and connection • Healthcare • Human resources • Regions and communities Societal sustainability Ensure safety, security and global sustainability • Financial and credit card services • Food and agriculture • ICT • Resilience (*) • Energy and a circular society Technology transforming society Societal implementation of innovative technologies, transformation of companies and society • DX • Research on advanced technology • Focus on development of societal implementation businesses (*) Resilience: Meaning “the ability to recover” and “the ability to bounce back”, it refers to the capacity to respond to a crisis, such as a natural disaster, and the capacity to recover quickly from situations of damage (fortitude). <Achieving the sustainable growth of the MRI Group> Materiality Themes of the Group’s Initiatives Human foundation Sustainable improvement of our people and the organization • Securing and developing human resources, operation of FLAP cycle (*) • Work-life balance, health-focused management • DE&I • Corporate culture reforms Intellectual and co- creation foundation Utilizing the value of collective knowledge and our co-creation foundation • Research & recommendations, accumulation of intellectual property and use of AI • Formation of customer and business partner networks • Group management Social trust foundation Maintaining and improving social trust in the Group • Risk management • Information security • Corporate governance • Decarbonization (*) FLAP cycle: Means cycle consisting of “Find” one’s aptitude and occupational requirements, “Learn” the knowledge necessary to improve one’s skills, “Act” to advance in one’s desired direction, and then “Perform” on one’s new career stage. Refers to a mechanism for sup porting order-made career development to match the skills, aptitudes and aspirations of individuals. (2) Management strategy (Medium-Term Management Plan 2026) The Group aims to brand and differentiate itself as a company to resolve societal issues, thereby accentuating its presence in the market. To this end, we drew up the Medium-Term Management Plan 2026 (“MP2026”) in October 2023, to realize our vision of where we want to be in 2030, and we have implemented initiatives in accordance with this plan. Under MP2026, we planned to achieve growth by enhancing the three values of financial, non -financial, and social value in accordance with the MRI Group’s management philosophy, as well as by scaling up through growth of the DX business , improving profitability through quality reform of core businesses, and accelerating the transformation of our business portfo lio by fostering and expanding next -generation businesses. Based on this plan, we established a basic policy consisting of (1) Business strategy, (2) Foundation strategy and (3) Value creation strategy. However, we have come to realize two fiscal years since the start of MP2026 that in the dramatically changing ICT and consulting sectors we have failed to fully tap into the favorable market conditions in these sectors and need to review our strategies a nd businesses. Accordingly, in FY2026, which is the final fiscal year of MP2026, we will partially revise the MP2026 strategies and targets, and we will also conduct a review for formulation of the next Medium -Term Management Plan (“next MP”), starting FY2027, including rebuilding our businesses.
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- 10 - a. Business strategy In the Think Tank & Consulting Services (TTC) segment, we will further strengthen our research and consulting business and put effort into building a strong value chain spanning Research & Recommendations, Analysis & Conceptualization, Design & Testing, and Societal Implementation. With areas such as Electric Power and Energy, Healthcare and Nursing Care and Business Analytics and AI (BA/AI) defined as priority areas, we will continue to excel at meeting needs in a wide -range of sectors as a full-range research institute. In the IT Services (ITS) segment, we aim to establish ourselves as a financial business partner and DX partner with core strengths both in Japan and overseas, focusing on major megabanks. b. Foundation strategy We will develop and upgrade the infrastructure from the following perspectives. <TTC> • Human capital management: While enhancing our human capital as a source of our competitiveness and strengthening engagement, we will aim to achieve a human resource portfolio linked with our business strategies. • Collaboration within the Group: We will concentrate resources on areas where we should strengthen coordination (public DX, electric power DX, DA and AI, etc.) and pursue synergy between consulting and societal implementation. • Upfront investment: We will systematically make upfront investments for continuous growth including investment in human resources (securing and developing human resources ), R&D ( research & recommendations , new business development), and investment in facilities and equipment. • Productivity: We will expand the scope of use of generative AI across the company, including in back -office operations. We will also improve the business division support function through the transformation of middle-office operations. • Risk management: In line with the expansion of the Group’s operations and the development of businesses that utilize AI and other technologies, we will further upgrade our risk management system, and ensure that project management systems for system development, legal functions, and information system security function well and are reinforced throughout the entire Group <ITS> • Technological foundation: We will strengthen technological capabilities both on the cloud and operations fronts, and we will aim to improve development productivity through the application of AI. • Business foundation: We will strengthen the business foundation from the five perspectives of sales capabilities, external cooperation, consulting, one-stop products, and regional strategies. • Management foundation: We will take the head office relocation of Mitsubishi Research Institute DCS and the introduction of new in -house information systems as an opportunity to implement workstyle reforms and improve productivity, and strive to improve the productivity of corporate operations. c. Value creation strategy We will promote the Group’s sustainability management by enhancing the value we provide to our customers based on the above business and infrastructure strategies, and by creating a positive cycle and expansion of the three values of financial , non-financial, and social value . Through Group public relations and IR activities aimed at stakeholders, we will proactively explain and promote our social value, as well as the non -financial capital and value we possess, in order to gain recognition and trust as a company to resolve societal issues, thereby anchoring the brand image of the Group as a whole.
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- 11 - (3) Objective indicators to assess performance versus management targets, etc. a. Financial value We use ordinary profit and ROE as key management indicators. In light of results in the fiscal year under review, which is the second year of the plan, we have revised targets for the final fiscal year of MP2026 as follows. During FY2026, we will seek to improve our corporate value and capital efficiency through formulation of the next MP and consideration of medium -to- long-term growth strategies going forward. Targets for the final year of MP2026 (fiscal year ending September 30, 2026) (Initial targets) (After revision) Net sales 135.0 billion yen 122.0 billion yen Ordinary profit 14.0 billion yen 9.0 billion yen ROE 12% 8% b. Non-financial value Based on the materiality established for the MRI Group, we have set specific non -financial value indicators that express our capacity to resolve societal issues, and aim to achieve these targets. Specifically, the ratio of female employees, the number of patent applications and registrations, the ratio of renewable energy, and others are set as indicators classified under the th ree elements of human foundation, intellectual and co-creation foundation, and social trust foundation, and their degree of achievement is used as a partial factor when calculating variable compensation (stock compensation) for internal directors, thereby reflecting the results in officer compensation. c. Social value Based on the materiality established for the MRI Group, we have connected the relevant businesses operated by the Group with the social value we aim to create and the social value created by our Group’s strengths, and have set indicators such as the scale of the human resources /healthcare business, the scale of the GX -related business, and the number of startup companies fostered, in order to clarify our social value. (4) Operating environment The Group has positioned the public sector business in the TTC segment and the financial and credit card business in the ITS segment as its core businesses and considers these businesses to be strengths. Mitsubishi Research Institute, Inc. is the cor e company in the TTC segment and Mitsubishi Research Institute DCS Co., Ltd. is the core company in the ITS segment, and the Group has maintained a stable business foundation and grown through cooperation between these two companies. As the challenges facing society become increasingly more sophisticated and complex, wide -ranging and highly specialized expertise, urgency, and agility are increasingly required in policy planning and system design aimed at resolving such issues. In the TTC segment, we have used our wide -ranging expertise and integrated strengths to lead the way in addressing socially impactful, high-priority issues in areas such as the environment, energy, healthcare, transport, mobility and telecommunications. As a result, we have steadily won significant public sector business. In addition, resolving societal issues now requires not only research or system design, but also more in -depth involvement, such as presenting concrete solutions that actually work, demonstrating and confirming their effectiveness, and applying and commercializing them in the real world. Such changes also indicate the possibility of developing new businesses, shifting from a business model that is heavily limited by the number o f personnel deployed to a business model that is not overly limited by human resources. In the financial sector, with the rapid spread and development of ICT, adapting to new technologies such as Fintech has become a matter of urgency. In addition, new international financial regulations and corresponding systemic responses are being required to address issues such as money laundering and the management of various market risks that have emerged with increased globalization. In the ITS segment, we have been expanding our business by perceiving such changes in the financial sector and tapping into demand such as that for the development of important infrastructure systems. At the same time, there is a rapidly growing demand for system requirements that are different from what existed before, such as flexible and low-cost systems based on AI and c loud computing and mobile payment systems that rely on Fintech. In order to meet customer needs, consultative functions must be enhanced. To adapt to this changing environment and achieve further growth, we are transforming our business portfolio and efficiently allocating resources as a priority to important businesses. We will build on the strengths we have developed to date to predi ct and forecast changes in the much larger private-sector market, and we will further drive “implementation,” delivering solutions based on cutting-edge ICT technologies such as generative AI. In addition, we will augment our human resources, which are the source of our strength, and our ability to disseminate information, and expand collaboration with various partners both within and outside the Group.
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- 12 - (5) Business and financial issues to be addressed a. Strengthening human capital management Human resources are important assets and the sources of the MRI Group’s competitiveness and growth. We will secure the talent needed to realize a scenario for growth for the Group as a whole in line with our business strategy, and aim to achieve an optimal human resources portfolio. We will develop recruitment and training strategies to address the shortage in talent, as well as improve compensation and focus on augmenting human resources in growth areas. Regarding the development of human resources, we introduced our unique FLAP Cycle, which supports the development and growth of employees according to their individual aspirations. Since the start of FY2026, in the TTC segment, we have been making personnel system changes designed to enable employees who want to tackle social issues to achieve career advancement in the medium and long term. As part of these changes, seniority-based elements were eliminated, making it possible to assign posts and roles even more flexibly. The multi -peak human resource system, which permits multiple ca reer paths, has further evolved, making it possible to promote people to higher positions with different specialties. We have also sought to improve the compensation of post-retirement re-employed workers (senior experts) in the hope that they will play an active role. Through increased engagement with employees, we will facilitate operation of the new system and increase its effectiveness. Additionally, in response to our growing workforce and the diversification of human resources as well as the growing need for systematic and continuous education and career development support and training, we established the MRI Academy in the TTC segment and the Digital Academy in the ITS segment, and we are implementing educational measures to produce human resources who embody our management philosophy. We will continue implementing workstyle reforms, and strengthening and improving health-focused manag ement, active participation of employees, diversity and employee engagement. In accordance with our belief that human resources are our greatest asset, we will aim for sustainable growth as a corporate group with an even more appealing work environment that allows talented human resources to fully demonstrate their skills and play an active role. At the same time, we will continue our efforts to improve productivity and pass on costs to customers, as well as to increase customer value through constant efforts to maintain and improve quality. b. Rebuilding of business strategies Taking into consideration the partial revision of our businesses and targets under MP2026, we will rebuild our business strategies as a matter of urgency. Firstly, during FY2026, while further strengthening the research and consulting business i n the TTC segment and driving business centered on the financial sector in the ITS segment, we will formulate the next MP, starting in FY2027, and refine our medium-to-long-term growth strategies. We also consider it important to foster businesses that will support the future, and to hasten the transformation of our business portfolio. Specifically, we will focus on expanding the scale and profitability of service -providing businesses that are not overly limited by human resources and otherwise expanding business through various means such as collaboration with diverse partners (including investment), development of new services to follow up on existing leading services such as PROSRV and miraicompass, and global business expansion. c. Strengthening research & recommendation activities and actively utilizing generative AI We recognize that research & recommendation activities form the starting point of the Group’s value chain, and needs further reinforcement. Through research & recommendations, we will shape social trends toward the realization of a future world and enhance the social value of the entire MRI Group. Specifically, we will implement timely and autonomous initiatives and offer recommendations based on scientific knowledge (evidence), thereby contributing to the formulation of major public -sector policies and corporate strategies. The emergence, rapid development, and spread of generative AI is expected to affect many industries and professions, and our operations are no exception. Various future risks may emerge, including loss of competitive advantage due to developments such as a fundamental shift in business models and the emergence of competitors from unexpected industries. To take advantage of such risks as business opportunities, the Group is actively promoting the use of generative AI in various situations ranging from project planning and recommendations through to business execution and project management. Through these efforts, we aim to improve the productivity of the entire Group and further enhance customer value. d. Strengthening the ability to manage risk As our business expands, there are more opportunities to carry out large -scale projects and business formats that had not existed before, and project management is becoming increasingly important. In addition, when undertaking new business initiatives, the Group may face risks that it does not have the accumulated experience or knowledge to counter, and therefore
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- 13 - it is necessary to identify such risks early on and respond promptly. We will improve our understanding of rising or falling trends in risk and improve predictive management by implementing predictive monitoring based on Key Risk Indicators (KRIs) and we will also further strengthen project management and legal functions in system development and information security across the Group. 4. Basic approach to selection of accounting standard The MRI Group applies Japanese GAAP. Also, we intend to take action as appropriate regarding the adoption of IFRS, taking the situation in Japan and overseas into consideration.
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- 14 - 5. Consolidated financial statements and significant notes thereto (1) Consolidated balance sheets (Million yen) As of September 30, 2024 As of September 30, 2025 Assets Current assets Cash and deposits 30,927 30,310 Accounts receivable - trade 26,637 25,538 Contract assets 13,940 17,376 Inventories 208 477 Prepaid expenses 2,134 2,195 Other 433 3,591 Allowance for doubtful accounts (0) (1) Total current assets 74,282 79,487 Non-current assets Property and equipment Buildings and structures 20,228 20,768 Accumulated depreciation (12,744) (12,702) Buildings and structures, net 7,484 8,066 Machinery, equipment and vehicles 371 56 Accumulated depreciation (357) (47) Machinery, equipment and vehicles, net 14 8 Tools, furniture and fixtures 6,438 6,453 Accumulated depreciation (5,057) (4,813) Tools, furniture and fixtures, net 1,381 1,640 Land 720 720 Leased assets 1,618 1,639 Accumulated depreciation (644) (720) Leased assets, net 974 919 Construction in progress 361 1,493 Total property and equipment 10,937 12,848 Intangible assets Software 5,482 5,505 Software in progress 1,328 1,587 Leased assets 7 – Other 13 10 Total intangible assets 6,832 7,103 Investments and other assets Investment securities 18,130 19,052 Long-term loans receivable 5 4 Leasehold and guarantee deposits 3,381 2,880 Net defined benefit asset 710 1,454 Deferred tax assets 4,477 4,532 Other 977 748 Allowance for doubtful accounts (3) – Total investments and other assets 27,679 28,673 Total non-current assets 45,449 48,625 Total assets 119,732 128,113
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- 15 - (Million yen) As of September 30, 2024 As of September 30, 2025 Liabilities Current liabilities Accounts payable - trade 3,731 4,836 Lease obligations 212 205 Accounts payable - other 1,510 1,886 Accrued expenses 13,164 10,256 Income taxes payable 1,734 2,438 Accrued consumption taxes 2,155 1,756 Contract liabilities 1,335 1,577 Provision for bonuses 5,921 7,409 Provision for bonuses for directors, etc. 188 223 Provision for loss on order received 132 90 Asset retirement obligations 468 – Other 572 3,371 Total current liabilities 31,128 34,052 Non-current liabilities Lease obligations 899 831 Provision for retirement benefits for directors 10 16 Provision for share-based compensation 540 701 Net defined benefit liability 9,740 9,693 Asset retirement obligations 1,041 1,463 Other – 7 Total non-current liabilities 12,230 12,713 Total liabilities 43,359 46,766 Net assets Shareholders’ equity Capital stock 6,336 6,336 Capital surplus 4,908 4,908 Retained earnings 57,036 58,971 Treasury shares (3,261) (1,336) Total shareholders’ equity 65,019 68,879 Accumulated other comprehensive income Valuation difference on available-for-sale securities 2,207 2,712 Deferred gains or losses on hedges 38 50 Foreign currency translation adjustment 9 (19) Remeasurements of defined benefit plans 355 301 Total accumulated other comprehensive income 2,611 3,044 Non-controlling interests 8,742 9,422 Total net assets 76,373 81,346 Total liabilities and net assets 119,732 128,113
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- 16 - (2) Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income (Million yen) Fiscal year ended September 30, 2024 Fiscal year ended September 30, 2025 Net sales 115,362 121,458 Cost of sales 89,942 92,718 Gross profit 25,419 28,739 SG&A expenses 18,358 20,728 Operating profit 7,060 8,010 Non-operating income Interest income 11 23 Dividend income 223 219 Share of profit of entities accounted for using equity method 619 1,332 Compensation income 128 – Other 146 183 Total non-operating income 1,128 1,758 Non-operating expenses Interest expenses 14 11 Loss on investment partnership management 17 15 Compensation for damage 7 – Other 2 8 Total non-operating expenses 41 35 Ordinary profit 8,147 9,734 Extraordinary income Gain on sales of non-current assets – 0 Gain on sales of investment securities 206 1,541 Other 12 0 Total extraordinary income 219 1,542 Extraordinary losses Loss on retirement of non-current assets 81 53 Impairment losses 210 627 Loss on revaluation of investment securities 87 17 Head office relocation expenses – 326 Other 6 11 Total extraordinary losses 385 1,035 Profit before income taxes 7,981 10,241 Income taxes - current 2,459 3,356 Income taxes - deferred (39) (340) Total income taxes 2,420 3,015 Profit 5,561 7,225 Profit attributable to non-controlling interests 557 839 Profit attributable to owners of parent 5,003 6,386
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- 17 - Consolidated statements of comprehensive income (Million yen) Fiscal year ended September 30, 2024 Fiscal year ended September 30, 2025 Profit 5,561 7,225 Other comprehensive income Valuation difference on available-for-sale securities (86) 548 Deferred gains or losses on hedges 42 12 Foreign currency translation adjustment 12 (28) Remeasurements of defined benefit plans 54 (31) Share of other comprehensive income of entities accounted for using equity method 135 (7) Total other comprehensive income 158 492 Comprehensive income 5,719 7,717 Comprehensive income attributable to Comprehensive income attributable to owners of parent 5,185 6,819 Comprehensive income attributable to non-controlling interests 534 898
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- 18 - (3) Consolidated statements of changes in net assets Fiscal year ended September 30, 2024 (from October 1, 2023 to September 30, 2024) (Million yen) Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity Balance at beginning of current period 6,336 4,908 54,520 (2,393) 63,371 Changes of items during period Dividends of surplus (2,486) (2,486) Profit attributable to owners of parent 5,003 5,003 Purchase of treasury shares (1,034) (1,034) Disposal of treasury shares 166 166 Net changes of items other than shareholders’ equity Total changes of items during period – – 2,516 (868) 1,647 Balance at end of current period 6,336 4,908 57,036 (3,261) 65,019 Accumulated other comprehensive income Non-controlling interests Total net assets Valuation difference on available-for- sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Balance at beginning of current period 2,229 (3) (2) 205 2,429 8,584 74,385 Changes of items during period Dividends of surplus (2,486) Profit attributable to owners of parent 5,003 Purchase of treasury shares (1,034) Disposal of treasury shares 166 Net changes of items other than shareholders’ equity (22) 42 12 150 181 158 340 Total changes of items during period (22) 42 12 150 181 158 1,988 Balance at end of current period 2,207 38 9 355 2,611 8,742 76,373
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- 19 - Fiscal year ended September 30, 2025 (from October 1, 2024 to September 30, 2025) (Million yen) Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity Balance at beginning of current period 6,336 4,908 57,036 (3,261) 65,019 Changes of items during period Dividends of surplus (2,566) (2,566) Profit attributable to owners of parent 6,386 6,386 Purchase of treasury shares (0) (0) Disposal of treasury shares 41 41 Cancellation of treasury shares (1,884) 1,884 – Net changes of items other than shareholders’ equity Total changes of items during period – – 1,934 1,925 3,860 Balance at end of current period 6,336 4,908 58,971 (1,336) 68,879 Accumulated other comprehensive income Non-controlling interests Total net assets Valuation difference on available-for- sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Balance at beginning of current period 2,207 38 9 355 2,611 8,742 76,373 Changes of items during period Dividends of surplus (2,566) Profit attributable to owners of parent 6,386 Purchase of treasury shares (0) Disposal of treasury shares 41 Cancellation of treasury shares – Net changes of items other than shareholders’ equity 504 12 (28) (54) 433 679 1,113 Total changes of items during period 504 12 (28) (54) 433 679 4,973 Balance at end of current period 2,712 50 (19) 301 3,044 9,422 81,346
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- 20 - (4) Consolidated statements of cash flows (Million yen) Fiscal year ended September 30, 2024 Fiscal year ended September 30, 2025 Cash flows from operating activities Profit before income taxes 7,981 10,241 Depreciation 3,749 3,465 Impairment losses 210 627 Increase (decrease) in provision for bonuses (222) 1,488 Increase (decrease) in provision for bonuses for directors 13 34 Increase (decrease) in provision for share-based compensation 308 161 Decrease (increase) in net defined benefit asset (61) (744) Increase (decrease) in net defined benefit liability (20) (92) Increase (decrease) in provision for retirement benefits for directors 5 6 Increase (decrease) in allowance for doubtful accounts (0) (2) Increase (decrease) in provision for loss on order received (627) (41) Interest and dividend income (234) (243) Interest expenses 14 11 Share of loss (profit) of entities accounted for using equity method (619) (1,332) Compensation income (128) – Loss (gain) on sales of non-current assets – (0) Loss on retirement of non-current assets 81 53 Loss (gain) on sales of investment securities (206) (1,541) Loss (gain) on valuation of investment securities 87 17 Decrease (increase) in accounts receivable - trade, and contract assets 2,198 (2,338) Decrease (increase) in inventories 134 (268) Increase (decrease) in trade payables (556) 1,098 Increase (decrease) in accrued expenses 1,487 (2,908) Increase (decrease) in accrued consumption taxes 9 (384) Increase (decrease) in contract liabilities 580 242 Other (21) 849 Subtotal 14,162 8,399 Interest and dividends received 632 726 Interest paid (13) (11) Proceeds from compensation 128 – Income taxes paid (1,373) (2,691) Net cash provided by (used in) operating activities 13,535 6,422 Cash flows from investing activities Purchase of property and equipment (1,357) (3,615) Purchase of intangible assets (2,769) (2,782) Purchase of investment securities (167) (110) Proceeds from sales of investment securities 351 2,427 Proceeds from redemption of investment securities 2,000 – Proceeds from withdrawal of investments in silent partnerships – 89 Loan advances (4) (2) Proceeds from collection of loans receivable 1 2 Payments of leasehold and guarantee deposits (987) (33) Proceeds from refund of leasehold and guarantee deposits 24 10 Other 2 8 Net cash provided by (used in) investing activities (2,906) (4,005)
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- 21 - (Million yen) Fiscal year ended September 30, 2024 Fiscal year ended September 30, 2025 Cash flows from financing activities Repayments of long-term borrowings (500) – Repayments of lease obligations (541) (225) Dividends paid (2,485) (2,564) Dividends paid to non-controlling interests (375) (218) Purchase of treasury shares (1,034) (0) Net cash provided by (used in) financing activities (4,938) (3,008) Effect of exchange rate change on cash and cash equivalents 10 (25) Net increase (decrease) in cash and cash equivalents 5,700 (617) Cash and cash equivalents at beginning of period 24,926 30,627 Cash and cash equivalents at end of period 30,627 30,010
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- 22 - (5) Notes to consolidated financial statements (Notes on going concern assumption) Not applicable (Notes on changes in accounting policies) (Application of Accounting Standard for Current Income Taxes, etc.) We have been applying the Accounting Standard for Current Income Taxes (ASBJ Statement No. 27 on October 2022; hereinafter referred to as “the 2022 Revised Accounting Standard”) and other arrangements since the beginning of the fiscal year under view. The amendment to categories in which current income taxes should be recorded (taxes on other comprehensive income) follows the transitional treatment prescribed in the proviso of paragraph 20 -3 of the 2022 Revised Accounting Standard and the transitional treatment prescribed in the proviso (2) of paragraph 65-2 of the Implementation Guidance on Tax Effect Accounting (ASBJ Guidance No. 28, October 28, 2022; hereinafter referred to as “the 2022 Revised Implementation Guidance”). This change in accounting policy has no impact on the consolidated financial statements. For the amendment related to the revised accounting treatment for consolidated financial statements when gains or losses on sale of shares in subsidiaries resulting from transactions between consolidated companies were deferred for tax purposes, the 2022 Revised Implementation Guidance 2022 has been applied since the beginning of the fiscal year under review. This change in accounting policy is applied retrospectively, and consolidated financial statements for the previous year are after retrospective application. This change in accounting policies has no impact on the consolidated financial statements for the previous fiscal year. (Additional information) (Share-based compensation system linked to operating performance for directors, executives and research fellows) MRI and certain of its consolidated subsidiaries have introduced a performance-based stock compensation plan (“the Plan”) for Directors of MRI and certain consolidated subsidiaries (excluding outside directors, non -executive directors, and directors living outside Japan), executive officers and research fellows who have signed an engagement agreement (excluding those living outside Japan) (collectively referred to as the “Directors or others”). The Plan has been introduced to raise awareness of contributions to improving operating results at the MRI Group and enhancing the corporate value in the medium to long term. The Plan is an officers’ compensation system that is closely connected to the MRI Group’s results, transparent and objective. The accounting for the Plan is in line with the Practical Solution on Transactions of Delivering the Company’s Own Stock to Employees etc. through Trusts (ASBJ PITF No. 30, March 26, 2015). 1) Overview of transaction The Plan has a mechanism called a Board Incentive Plan trust (“BIP Trust”). After the resignation of the Directors or others (or the death of the Directors or others), MRI and certain consolidated subsidiaries grant shares of MRI held by the BIP Trust or provides money equivalent to the shares to the Directors or others according to the performance target achievement level. 2) MRI’s shares remaining in the trust The book value of the shares held by the BIP Trust (excluding the incidental expense) is posted in net assets as treasury shares. The book value of the treasury shares and the number of treasury shares were 1,375 million yen and 302,000 shares, respectively, at the end of the previous fiscal year, and 1,333 million yen and 293,000 shares, respectively, at the end of the fiscal year under review.
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- 23 - (Notes on segment information, etc.) [Segment information] 1. Overview of reportable segments The reportable segments of MRI are constituent units of the MRI Group on which separate financial information is available, and which are regularly reviewed by the Board of Directors for resource allocation and performance evaluation. The Group classifies its businesses according to the type and nature of services and similarities in business forms, and pursues business activities by formulating comprehensive strategies for the products and services it handles. <Think Tank & Consulting Services> Services provided in this segment include research and consulting services regarding public policies and general businesses, management consulting services, IT consulting and solutions services. <IT Services> Activities in this segment include software development, operation and maintenance, data processing services, outsourcing services, and sales of system equipment. 2. Method of calculation for figures relating to net sales, profit or loss, assets, liabilities, and other items by reportable segment The accounting methods applied to reported segments are consistent with the accounting policies used to prepare the consolidated financial statements. Figures for the profits of reportable segments are based on ordinary profit. Inter - segment sales and transfers between segments are based on market prices. 3. Information regarding figures relating to net sales, profit or loss, assets, liabilities, and other items by reportable segment Fiscal year ended September 30, 2024 (from October 1, 2023 to September 30, 2024) (Million yen) Reportable segments Total Adjustment (Note 1) Amount recorded in the consolidated financial statements (Note 2) Think Tank & Consulting Services IT Services Net sales Outside customers 45,419 69,942 115,362 – 115,362 Inter-segment sales and transfers 67 1,429 1,497 (1,497) – Total 45,487 71,372 116,860 (1,497) 115,362 Segment profit 4,237 3,909 8,146 0 8,147 Segment assets 49,945 70,167 120,113 (380) 119,732 Other items Depreciation 1,060 2,702 3,763 (13) 3,749 Interest income 1 9 11 – 11 Interest expenses 2 11 14 – 14 Share of profit of entities accounted for using equity method 548 70 619 – 619 Investment in equity method affiliates 10,848 786 11,634 – 11,634 Increase in property and equipment, and intangible assets (Note 3) 1,124 2,389 3,513 (13) 3,500 Notes: 1. Adjustments to segment profit, segment assets and other items represent the elimination of inter-segment transactions. 2. Segment profit is adjusted with ordinary profit in the consolidated financial statements. 3. The increase in property and equipment and intangible assets does not include assets corresponding to asset retirement obligations.
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- 24 - Fiscal year ended September 30, 2025 (from October 1, 2024 to September 30, 2025) (Million yen) Reportable segments Total Adjustment (Note 1) Amount recorded in the consolidated financial statements (Note 2) Think Tank & Consulting Services IT Services Net sales Outside customers 47,090 74,367 121,458 – 121,458 Inter-segment sales and transfers 90 1,392 1,483 (1,483) – Total 47,181 75,760 122,942 (1,483) 121,458 Segment profit 5,715 4,037 9,753 (18) 9,734 Segment assets 52,939 75,472 128,411 (297) 128,113 Other items Depreciation 914 2,562 3,476 (11) 3,465 Interest income 20 3 23 – 23 Interest expenses 2 8 11 – 11 Share of profit of entities accounted for using equity method 1,187 144 1,332 – 1,332 Investment in equity method affiliates 11,476 113 11,590 – 11,590 Increase in property and equipment, and intangible assets (Note 3) 846 5,501 6,348 (30) 6,318 Notes: 1. Adjustments to segment profit, segment assets and other items represent the elimination of inter-segment transactions. 2. Segment profit is adjusted with ordinary profit in the consolidated financial statements. 3. The increase in property and equipment and intangible assets does not include assets corresponding to asset retirement obligations.
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- 25 - (Per share information) Fiscal year ended September 30, 2024 Fiscal year ended September 30, 2025 Net assets per share 4,296.49 yen 4,566.65 yen Basic earnings per share 316.44 yen 405.55 yen Notes: 1. For the purposes of calculating net assets per share, shares of MRI held in the BIP Trust are included in the treasury shares excluded from the total number of issued shares at the end of the fiscal year. The number of treasury shares at the end of the previous fiscal year was 683,000 shares, which included 302,000 shares of MRI held by the BIP Trust. At the end of the fiscal year under review, the number of treasury shares was 294,000 shares, which included 293,000 shares of MRI held by the BIP Trust. 2. Diluted earnings per share is not shown because MRI has not issued potential shares. 3. Basis for calculating basic earnings per share is as shown below. Fiscal year ended September 30, 2024 Fiscal year ended September 30, 2025 Profit attributable to owners of parent (million yen) 5,003 6,386 Profit not attributable to common shareholders (million yen) – – Profit attributable to owners of parent related to common shares (million yen) 5,003 6,386 Average number of outstanding common shares during the fiscal year (thousand shares) 15,811 15,747 Note: For the purposes of calculating basic earnings per share, shares of MRI held in the BIP Trust are included in the treasury shares excluded from the average number of outstanding common shares during the fiscal year. The average number of treasury shares during the previous fiscal year was 612,000 shares, which included an average 232,000 shares of MRI held by the BIP Trust. During the fiscal year under review, the average number of treasury shares was 351,000 shares, which included an average 296,000 shares of MRI held by the BIP Trust. (Significant subsequent events) Not applicable
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- 26 - 6. Non-consolidated financial statements (1) Non-consolidated balance sheets (Million yen) As of September 30, 2024 As of September 30, 2025 Assets Current assets Cash and deposits 10,933 9,803 Accounts receivable - trade 2,331 2,788 Contract assets 9,330 12,313 Work in process 52 74 Prepaid expenses 574 766 Other 307 209 Allowance for doubtful accounts (0) (1) Total current assets 23,531 25,955 Non-current assets Property and equipment Buildings 811 747 Machinery and equipment 0 – Tools, furniture and fixtures 217 177 Land 1 1 Leased assets 52 161 Total property and equipment 1,083 1,088 Intangible assets Software 2,691 2,049 Other 111 83 Total intangible assets 2,802 2,132 Investments and other assets Investment securities 2,947 3,435 Shares of subsidiaries and affiliates 26,073 26,073 Investments in capital of subsidiaries and affiliates 363 363 Leasehold and guarantee deposits 1,550 1,549 Long-term prepaid expenses 43 39 Deferred tax assets 2,422 2,559 Other 6 6 Allowance for doubtful accounts (3) – Total investments and other assets 33,403 34,029 Total non-current assets 37,289 37,249 Total assets 60,821 63,205
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- 27 - (Million yen) As of September 30, 2024 As of September 30, 2025 Liabilities Current liabilities Accounts payable - trade 1,661 2,188 Lease obligations 15 43 Accounts payable - other 773 721 Accrued expenses 618 790 Income taxes payable 1,078 723 Accrued consumption taxes 1,581 1,438 Contract liabilities 449 453 Provision for bonuses 2,283 3,120 Provision for bonuses for directors, etc. 188 218 Provision for loss on order received 28 13 Other 304 346 Total current liabilities 8,983 10,058 Non-current liabilities Lease obligations 43 137 Provision for share-based compensation 540 701 Reserve for retirement benefits 4,519 4,340 Asset retirement obligations 626 629 Other 272 217 Total non-current liabilities 6,002 6,026 Total liabilities 14,985 16,084 Net assets Shareholders’ equity Capital stock 6,336 6,336 Capital surplus Legal capital surplus 4,851 4,851 Total capital surplus 4,851 4,851 Retained earnings Legal retained earnings 171 171 Other retained earnings General reserve 1,842 1,842 Retained earnings brought forward 34,858 33,953 Total retained earnings 36,871 35,966 Treasury shares (3,261) (1,336) Total shareholders’ equity 44,797 45,817 Valuation and translation adjustments Valuation difference on available-for-sale securities 999 1,253 Deferred gains or losses on hedges 38 50 Total valuation and translation adjustments 1,038 1,303 Total net assets 45,835 47,121 Total liabilities and net assets 60,821 63,205
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- 28 - (2) Non-consolidated statements of income (Million yen) Fiscal year ended September 30, 2024 Fiscal year ended September 30, 2025 Net sales 42,625 44,179 Cost of sales 33,376 32,980 Gross profit 9,248 11,199 SG&A expenses Salaries and allowances 1,298 1,671 Provision for bonuses 638 984 Provision for bonuses for directors, etc. 122 140 Provision for share-based compensation 176 106 Outsourcing expenses 1,438 1,464 Rent expenses 482 503 Depreciation 392 481 Provision of allowance for doubtful accounts (0) 1 Other 2,292 2,532 Total selling, general and administrative expenses 6,842 7,887 Operating profit 2,406 3,312 Non-operating income Interest and dividend income 2,229 1,652 Other 236 135 Total non-operating income 2,465 1,788 Non-operating expenses Interest expenses 9 21 Loss on investment partnership management 17 15 Foreign exchange losses – 7 Other 2 1 Total non-operating expenses 28 45 Ordinary profit 4,842 5,054 Extraordinary income Gain on sales of non-current assets – 0 Gain on sales of investment securities 206 19 Total extraordinary income 206 20 Extraordinary losses Loss on retirement of non-current assets 15 0 Impairment losses 195 605 Loss on revaluation of investment securities 87 17 Other 6 11 Total extraordinary losses 304 634 Profit before income taxes 4,744 4,440 Income taxes - current 1,075 1,173 Income taxes - deferred (208) (279) Total income taxes 867 894 Profit 3,877 3,546
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- 29 - (3) Non-consolidated statements of changes in net assets Fiscal year ended September 30, 2024 (from October 1, 2023 to September 30, 2024) (Million yen) Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity Legal capital surplus Total capital surplus Legal retained earnings Other retained earnings Total retained earnings General reserve Retained earnings brought forward Balance at beginning of current period 6,336 4,851 4,851 171 1,842 33,468 35,481 (2,393) 44,276 Changes of items during period Dividends of surplus (2,486) (2,486) (2,486) Profit 3,877 3,877 3,877 Purchase of treasury shares (1,034) (1,034) Disposal of treasury shares 166 166 Net changes of items other than shareholders’ equity Total changes of items during period – – – – – 1,390 1,390 (868) 521 Balance at end of current period 6,336 4,851 4,851 171 1,842 34,858 36,871 (3,261) 44,797 Valuation and translation adjustments Total net assets Valuation difference on available-for- sale securities Deferred gains or losses on hedges Total valuation and translation adjustments Balance at beginning of current period 967 (3) 963 45,239 Changes of items during period Dividends of surplus (2,486) Profit 3,877 Purchase of treasury shares (1,034) Disposal of treasury shares 166 Net changes of items other than shareholders’ equity 32 42 74 74 Total changes of items during period 32 42 74 596 Balance at end of current period 999 38 1,038 45,835
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- 30 - Fiscal year ended September 30, 2025 (from October 1, 2024 to September 30, 2025) (Million yen) Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity Legal capital surplus Total capital surplus Legal retained earnings Other retained earnings Total retained earnings General reserve Retained earnings brought forward Balance at beginning of current period 6,336 4,851 4,851 171 1,842 34,858 36,871 (3,261) 44,797 Changes of items during period Dividends of surplus (2,566) (2,566) (2,566) Profit 3,546 3,546 3,546 Purchase of treasury shares (0) (0) Disposal of treasury shares 41 41 Cancellation of treasury shares (1,884) (1,884) 1,884 – Net changes of items other than shareholders’ equity Total changes of items during period – – – – – (905) (905) 1,925 1,020 Balance at end of current period 6,336 4,851 4,851 171 1,842 33,953 35,966 (1,336) 45,817 Valuation and translation adjustments Total net assets Valuation difference on available-for- sale securities Deferred gains or losses on hedges Total valuation and translation adjustments Balance at beginning of current period 999 38 1,038 45,835 Changes of items during period Dividends of surplus (2,566) Profit 3,546 Purchase of treasury shares (0) Disposal of treasury shares 41 Cancellation of treasury shares – Net changes of items other than shareholders’ equity 253 12 265 265 Total changes of items during period 253 12 265 1,285 Balance at end of current period 1,253 50 1,303 47,121
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- 31 - 7. Status of orders received and sales (1) Status of orders received Status of orders received by segment for the fiscal year under review is as shown below. (Million yen) Segment name Fiscal year ended September 30, 2025 Orders received Year-on-year change (%) Order backlog Year-on-year change (%) Think Tank & Consulting Services 51,506 19.4 30,217 17.1 IT Services 75,077 3.8 50,315 1.4 System development 47,553 9.0 24,215 11.8 Outsourcing services 27,523 (4.1) 26,099 (6.6) Total 126,583 9.6 80,532 6.8 Notes: 1. Inter-segment transactions are offset against each other. 2. For services where services are continually rendered and fees commensurate with performance are received, an estimate of sales for the next fiscal year is recorded in the balance of orders received. (2) Sales performance Sales performance by segment for the fiscal year under review is as shown below. (Million yen) Segment name Fiscal year ended September 30, 2025 Year-on-year change (%) Think Tank & Consulting Services 47,090 3.7 IT Services 74,367 6.3 System development 44,989 6.1 Outsourcing services 29,377 6.7 Total 121,458 5.3 Note: Inter-segment transactions are offset against each other.