Annual 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. February 13, 2026 Consolidated Financial Results for the Fiscal Year Ended December 31, 2025 (Under Japanese GAAP) Company name: MEDLEY,INC. Listing: Tokyo Stock Exchange Securities code: 4480 URL: https://www.medley.jp Representative: Kohei Takiguchi President and Chief Executive Officer Inquiries: Ryo Kawahara Director, Senior Vice President and Chief Financial Officer Telephone: +81-3-6372-1265 Scheduled date of annual general meeting of shareholders: March 27, 2026 Scheduled date to commence dividend payments: - Scheduled date to file annual securities report: March 27, 2026 Preparation of supplementary material on financial results: Yes Holding of financial results briefing: Yes (Yen amounts are rounded down to millions, unless otherwise noted.) 1. Consolidated financial results for the fiscal year ended December 31, 2025 (from January 1, 2025 to December 31, 2025) (1) Consolidated operating results (Percentages indicate year-on-year changes.) Net sales EBITDA ※ 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 % Millions of yen % December 31, 2025 36,786 25.5 4,821 17.2 2,150 (7.6) 2,202 (46.0) 975 (65.1) December 31, 2024 29,302 42.7 4,114 21.2 2,326 (12.6) 4,078 8.6 2,798 9.0 Note: Comprehensive income For the fiscal year ended December 31, 2025: ¥ 791 million [ (71.3) %] For the fiscal year ended December 31, 2024: ¥ 2,751 million [ 20.3 %] Basic earnings per share Diluted earnings per share Rate of return on equity Ordinary profit to total assets ratio Operating profit to net sales ratio Fiscal year ended Yen Yen % % % December 31, 2025 30.62 30.47 5.6 5.1 5.8 December 31, 2024 86.17 85.62 14.7 11.5 7.9 Note: EBITDA = Operating profit / loss + depreciation and amortization of goodwill + share-based compensation expenses (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 December 31, 2025 41,252 14,799 35.9 478.95 December 31, 2024 45,201 20,219 44.7 621.43 Reference: Equity As of December 31, 2025: ¥ 14,799 million As of December 31, 2024: ¥ 20,209 million (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 December 31, 2025 3,486 (7,128) (6,776) 8,575 December 31, 2024 2,447 (10,719) 11,899 18,993 ― 1 ―
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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 - 0.00 - 0.00 0.00 - - - December 31, 2024 Fiscal year ended - 0.00 - 0.00 0.00 - - - December 31, 2025 Fiscal year ending December 31, 2026 (Forecast) - 0.00 - 0.00 0.00 - 3. Consolidated financial result forecasts for the fiscal year ending December 31, 2026 (from January 1, 2026 to December 31, 2026) (Percentages indicate year-on-year changes.) Net sales EBITDA 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 % Millions of yen % Yen Full year 46,400 26.1 5,800 20.3 2,950 37.2 3,250 47.6 1,800 84.5 58.25 * Notes (1) Significant changes in the scope of consolidation during the period: Yes Excluded: 3 companies( MEDiPASS Co., Ltd., GUPPY’s Inc., Pacific Medical, Inc. ) (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: None (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 December 31, 2025 32,738,600 shares As of December 31, 2024 32,738,600 shares (ii) Number of treasury shares at the end of the period As of December 31, 2025 1,838,986 shares As of December 31, 2024 218,285 shares (iii) Average number of shares outstanding during the period Fiscal Year ended December 31, 2025 31,866,284 shares Fiscal Year ended December 31, 2024 32,474,847 shares * 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 This preliminary earnings report contains forward-looking statements such as earnings forecasts which are based on information currently available to the Group and certain assumptions deemed to be reasonable. The Group makes no guarantee regarding the accuracy of the forecasts contained herein. Because of variable factors, actual results may differ from the forecast figures. For information regarding assumptions upon which the Group’s results forecasts are based and notes regarding the use of results forecasts, please refer to (4) Outlook under 1. Outline of Business Performance on page 5. ― 2 ―
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1. Outline of Business Performance (1) Explanation regarding operating results During the consolidated fiscal year ended December 31, 2025 (consolidated FY2025), in both the HR PF Business and the Medical PF Business, Japanese medical and nursing industry continued to face human resource shortages and issues related to national budget shortages. Amid this business environment, in consolidated FY2025, sales in the HR PF Business increased due to a steady increase in the number of customer offices and in our pool of registered workers for the recruitment system JobMedley and the number of customer offices for the online training system JobMedley academy also grew. We also achieved sales growth in the Medical PF Business as installation of our products at customers’ facilities went smoothly, resulting in growth in the number of customer offices. Even as the Group achieved sales growth, it actively implemented the following initiatives with a view toward medium- to long-term growth. We conducted marketing activities and invested in the expansion of our online training system in the HR PF Business in order to increase the scale of our businesses. At the same time, we reorganized the structure of the Medical PF Business. We converted ASFON TRUST NETWORK, Inc. which operates a nursing care facility referral business, and AxisRoot Holdings, Inc. whose subsidiary develops and provides a cloud-based medication history system into consolidated subsidiaries. Furthermore, we merged six consolidated companies into our company to enhance operational efficiency. As a result of the above, in consolidated FY2025, the Group posted net sales of ¥36,786 million (up 25.5% YoY), EBITDA of ¥4,821 million (up 17.2% YoY), operating profit of ¥2,150 million (down 7.6% YoY), ordinary profit of ¥2,202 million (down 46.0% YoY), and net profit attributable to owners of the parent company of ¥975 million (down 65.1% YoY). The HR PF Business posts sales based on the hiring dates of persons using the Group’s services to find employment at companies seeking employees. The sales therefore tend to be concentrated in April, when Japanese companies tend to hire more employees (because this is often the beginning of Japanese companies’ fiscal years). Earnings by business segment are as follows. As we have revised our reportable segments as of consolidated FY2025, YoY comparisons below are based on figures for the same period of the previous fiscal year that have been adjusted to reflect the new segment classifications. 1) HR PF Business During consolidated FY2025, the Group continuously improved the functionality of its websites in order to improve user convenience. As a result, customer offices in the HR PF Business grew 9.9% compared with the end of consolidated FY2024, to 448 thousand; and listed job offers rose by 12.3% over the same period, to 471 thousand. As a result of the above, consolidated FY2025 segment net sales were ¥26,321 million (up 24.7% YoY), and segment profit before allocation of group-wide shared costs (operating profit) was ¥9,085 million (up 17.6% YoY). 2) Medical PF Business During consolidated FY2025, the number of medical institution users in the Medical PF Business continued to grow, rising 17.1% compared with the end of consolidated FY2024, to 22 thousand users. In addition, we have finalized our plan to provide our MEDLEY Funding Support service in coordination with system usage data from the Medley Group and data from our medical billing system. As of consolidated FY2025, this service was reclassified from the New Services Segment to the Medical PF Business. Furthermore, we have launched “MEDLEY AI CLOUD,” an AI platform that connects hospitals, clinics, dental offices, dispensing pharmacies, and other healthcare facilities with patients and consumers. Additionally, the cloud-based medication history system “MEDIXS” has joined this segment through Axis, Inc. As a result of the above, consolidated FY2025 segment net sales were ¥9,378 million (up 23.6% YoY) and segment loss before allocation of group-wide shared costs (operating loss) was ¥454 million (¥15 million loss in FY2024). The segment loss (operating loss) is attributable to the prioritization of initiatives aimed at achieving a high sales growth rate. 3) New Services Segment During consolidated FY2025, the Group conducted investments in business expansion for the recruitment system in the U.S. In addition, nursing facility search website, Kaigo-no-Honne, continued proactive sales efforts to expand its content, as well as the number of listed facilities. In addition, the Minkai service operated by ASFON TRUST NETWORK ,Inc. was integrated into this segment. Also, we began offering JobMedley Spot, a recruitment system designed to meet short-term demand arising from labor shortages. Also, in January 2026, “Kaigo-no-Honne” was integrated into the “Minkai” brand. As a result, consolidated FY2025 segment net sales were ¥1,088 million (up 78.5% YoY) and segment loss before allocation of group-wide shared costs (operating loss) was ¥769 million (¥377 million loss in FY2024). Factors that drove the operating loss in the segment include costs related to investments being made in business expansion and operational development in the U.S. In addition, adjustments not attributable to any segment (intersegment eliminations and companywide expenses not allocated to any segment) totaled ¥5,711 million (up 14.1% YoY). ― 3 ―
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(2) Outline of financial position Assets Current assets as of the end of the consolidated FY2025 totaled ¥14,820 million, a decrease of ¥10,517 million from the end of the previous consolidated fiscal year. This was mainly attributed to a decrease of ¥10,420 million in cash and deposits. Non-current assets totaled ¥26,432 million, an increase of ¥6,569 million from the end of the previous consolidated fiscal year. This was mainly attributed to a ¥6,224 million increase in intangible fixed assets. As a result of the above, total assets as of end-consolidated FY2025 totaled ¥41,252 million, a decrease of ¥3,948 million compared with the end of the previous consolidated fiscal year. Liabilities Current liabilities as of the end of the consolidated FY2025 amounted to ¥11,516 million, an increase of ¥953 million from the end of the previous consolidated fiscal year. This was mainly attributable to an increase of ¥1,076 million in contract liabilities. Non-current liabilities totaled ¥14,937 million, an increase of ¥518 million compared to the end of the consolidated fiscal year. This increase was attributable to a ¥734 million increase in long-term borrowings. As a result of the above, total liabilities as of end-consolidated FY2025 totaled ¥26,453 million, an increase of ¥1,472 million compared with the end of the previous consolidated fiscal year. Net assets Net assets as of the end of the consolidated FY2025 totaled ¥14,799 million, a decrease of ¥5,420 million from the end of the previous consolidated fiscal year. This was mainly attributable to a decrease of ¥1,978 million in capital surplus, an increase of ¥975 million in retained earnings, and an increase of ¥4,222 million in treasury shares. (3) Outline of cash flows for the consolidated fiscal year Cash and cash equivalents (hereinafter, net cash) as of end-consolidated FY2025 totaled ¥8,575 million, a decrease of ¥10,417 million compared with the end-FY2024. Cash flows during consolidated FY2025 were as follows. Cash flows from operating activities Net cash provided by operating activities during consolidated FY2025 was ¥3,486 million (compared with ¥2,447 million in FY2024). This increase was mainly attributable to ¥2,380 million in pretax net profit , adjusted for ¥1,102 million in depreciation and amortization costs, ¥1,355 million in amortization of goodwill, ¥863 million in settlement received, and ¥1,801 million in income taxes paid. Cash flows from investing activities Net cash used in investing activities during consolidated FY2025 was ¥7,128 million (compared with ¥10,719 million in FY2024). This was mainly attributable to ¥984 million used in the acquisition of investment securities, ¥6,618 million in purchase of shares of subsidiaries resulting in change in scope of consolidation, and ¥779 million in sale of shares of subsidiaries resulting in change in scope of consolidation. Cash flows from financing activities Net cash used in financing activities during consolidated FY2025 was ¥6,776 million (compared with 11,899 million proceeds in FY2024). This was mainly attributable to ¥4,713 million in repayments of long-term borrowings, ¥5,000 million in proceeds from long-term borrowings, ¥5,326 million in purchase of treasury shares, and ¥1,719 million in purchase of shares of subsidiaries not resulting in change in scope of consolidation. ― 4 ―
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(4) Outlook The Company views the providing of value to its customers, in other words, maximization of companywide sales, as essential to maximization of long-term free cash flow, leading to growth in corporate value. The Company therefore positioned net sales as a key performance indicator to be considered when making management decisions. Specifically, the Company will focus on developing its business based on a business model focused on stable relationships with customers in order to achieve continuous high growth in sales (number of customer offices × ARPU*). The Company will also strive to maximize customer numbers while strengthening its product lineup in order to continuously improve ARPU. In order to achieve these goals, to the extent possible, the Company plans to make necessary investments in growth to continue to win customers, increase customer usage rate, and expand the range of functions offered by its services. Based on the above, in addition to net sales, which the Company views as the main source of long-term free cash flow, the Company focuses on EBITDA, a profit indicator that it views as closer to free cash flow. The Company will proactively disclose information on these two indicators to shareholders and investors. Profit indicators other than EBITDA include operating profit, ordinary profit, and net profit attributable to owners of the parent company. When M&A is conducted, accounting standards can have a sizable impact on progress made in terms of the abovementioned investments in growth. The Company therefore focuses on EBITDA as a profit indicator that measures actual profitability and is not impacted by such factors. EBITDA levels may vary depending on the growth phases of businesses including new businesses or growth of group companies driven by M&A. However, we establish timeframes for individual businesses to reach positive EBITDA and proactively conduct investments with the goal of maximizing long-term free cash flow. The Company’s consolidated financial results forecast for FY2026 is shown below. The Company’s forecast does not factor in any impact from the launch of new businesses not currently included in our business plan or M&A with low probabilities. Financial results forecast for FY2026 Net sales 46,400 million yen EBITDA 5,800 million yen Operating profit 2,950 million yen Ordinary profit 3,250 million yen Profit attributable to owners of parent 1,800 million yen The above forward-looking statements include forecasts that are based on information currently available to the Company and certain assumptions deemed to be reasonable. These statements include risks and uncertainties. Actual results may vary due to various uncertain factors. Please also refer to the Company’s financial results presentation materials for more details. (Note) ARPU (Average Revenue Per User) = average sales per Group customer business office 2. Basic Approach to Accounting Standard Selection The Company has adopted Japanese accounting standards as a means to allow comparison between companies. The Company has the policy of appropriately adopting International Financial Reporting Standards (IFRS), taking into consideration conditions in Japan and overseas. ― 5 ―
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3.Consolidated Financial Statements and Primary Notes (1) Consolidated Balance Sheet (Millions of yen) As of December 31, 2024 As of December 31, 2025 Assets Current assets Cash and deposits 18,996 8,575 Notes and accounts receivable - trade 2,856 3,042 Merchandise and finished goods 255 455 Work in process 17 149 Accounts receivable - other 2,872 1,881 Prepaid expenses 364 533 Other 20 235 Allowance for doubtful accounts (46) (53) Total current assets 25,337 14,820 Non-current assets Property, plant and equipment Buildings and structures, net 297 413 Tools, furniture and fixtures, net 87 93 Other, net 105 103 Total property, plant and equipment 490 609 Intangible assets Software 380 374 Goodwill 7,876 12,861 Customer-related assets 8,758 9,312 Technical assets - 365 Other 15 340 Total intangible assets 17,030 23,254 Investments and other assets Investment securities 392 1,192 Deferred tax assets 689 5 Leasehold deposits 1,040 1,049 Other 220 320 Total investments and other assets 2,342 2,567 Total non-current assets 19,863 26,432 Deferred assets 0 - Total assets 45,201 41,252 ― 6 ―
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(Millions of yen) As of December 31, 2024 As of December 31, 2025 Liabilities Current liabilities Accounts payable - trade 407 443 Current portion of long-term borrowings 3,617 3,786 Accounts payable - other 2,025 2,570 Accrued expenses 766 414 Contract liabilities 1,230 2,306 Deposits received 750 937 Income taxes payable 981 244 Other provisions 221 114 Other 562 697 Total current liabilities 10,562 11,516 Non-current liabilities Long-term borrowings 11,564 12,299 Deferred tax liabilities 2,629 2,563 Other 224 74 Total non-current liabilities 14,418 14,937 Total liabilities 24,981 26,453 Net assets Shareholders' equity Share capital 47 47 Capital surplus 14,196 12,217 Retained earnings 6,601 7,576 Treasury shares (621) (4,843) Total shareholders' equity 20,223 14,998 Accumulated other comprehensive income Valuation difference on available-for-sale securities (40) (224) Foreign currency translation adjustment 25 26 Total accumulated other comprehensive income (14) (198) Non-controlling interests 10 - Total net assets 20,219 14,799 Total liabilities and net assets 45,201 41,252 ― 7 ―
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(2) Consolidated Statements of Income and Comprehensive Income Consolidated Statement of Income (Millions of yen) For the fiscal year ended December 31, 2024 For the fiscal year ended December 31, 2025 Net sales 29,302 36,786 Cost of sales 10,382 13,600 Gross profit 18,919 23,186 Selling, general and administrative expenses 16,592 21,036 Operating profit 2,326 2,150 Non-operating income Interest income 2 22 Settlement received 2,234 372 Subsidy income 13 6 Other 35 59 Total non-operating income 2,284 460 Non-operating expenses Interest expenses 67 173 Amortization of share issuance costs 5 - Outsourcing expenses 413 101 Loss on extinguishment of share-based compensation expenses 20 63 Other 25 70 Total non-operating expenses 533 408 Ordinary profit 4,078 2,202 Extraordinary income Gain on sale of shares of subsidiaries and associates - 155 Gain on sale of businesses - 48 Gain on sale of non-current assets 2 1 Total extraordinary income 2 205 Extraordinary losses Loss on sale of non-current assets 0 1 Loss on abandonment of non-current assets 12 1 Loss on termination of retirement benefit plan - 25 Total extraordinary losses 13 27 Profit before income taxes 4,068 2,380 Income taxes - current 1,739 1,092 Income taxes - deferred (445) 312 Total income taxes 1,293 1,404 Profit 2,774 975 Profit (loss) attributable to non-controlling interests (23) - Profit attributable to owners of parent 2,798 975 ― 8 ―
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Consolidated Statement of Comprehensive Income (Millions of yen) For the fiscal year ended December 31, 2024 For the fiscal year ended December 31, 2025 Profit 2,774 975 Other comprehensive income Valuation difference on available-for-sale securities (40) (184) Foreign currency translation adjustment 17 0 Total other comprehensive income (22) (184) Comprehensive income 2,751 791 Comprehensive income attributable to Comprehensive income attributable to owners of parent 2,775 791 Comprehensive income attributable to non-controlling interests (23) - ― 9 ―
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(3) Consolidated Statement of Changes in Equity For the fiscal year ended December 31, 2024 (Millions of yen) Shareholders' equity Accumulated other comprehensive income Non-controlling interests Total net assets Share capital Capital surplus Retained earnings Treasury shares Total shareholders' equity Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income Balance at beginning of period 47 14,812 3,802 (1,118) 17,543 - 8 8 85 17,637 Changes during period Profit attributable to owners of parent 2,798 2,798 2,798 Purchase of treasury shares (0) (0) (0) Disposal of treasury shares (310) 498 187 187 Change in ownership interest of parent due to transactions with non-controlling interests (305) (305) (305) Net changes in items other than shareholders' equity (40) 17 (22) (74) (97) Total changes during period - (616) 2,798 497 2,679 (40) 17 (22) (74) 2,582 Balance at end of period 47 14,196 6,601 (621) 20,223 (40) 25 (14) 10 20,219 For the fiscal year ended December 31, 2025 (Millions of yen) Shareholders' equity Accumulated other comprehensive income Non-controlling interests Total net assets Share capital Capital surplus Retained earnings Treasury shares Total shareholders' equity Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income Balance at beginning of period 47 14,196 6,601 (621) 20,223 (40) 25 (14) 10 20,219 Changes during period Profit attributable to owners of parent 975 975 975 Purchase of treasury shares (5,326) (5,326) (5,326) Disposal of treasury shares (98) 643 545 545 Changes by share exchanges 70 459 530 530 Change in ownership interest of parent due to transactions with non-controlling interests (1,950) (1,950) (1,950) Net changes in items other than shareholders' equity (184) 0 (184) (10) (195) Total changes during period - (1,978) 975 (4,222) (5,225) (184) 0 (184) (10) (5,420) Balance at end of period 47 12,217 7,576 (4,843) 14,998 (224) 26 (198) - 14,799 ― 10 ―
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(4) Consolidated Statement of Cash Flows (Millions of yen) For the fiscal year ended December 31, 2024 For the fiscal year ended December 31, 2025 Cash flows from operating activities Profit before income taxes 4,068 2,380 Depreciation 903 1,102 Amortization of goodwill 773 1,355 Amortization of security deposit 27 30 Increase (decrease) in allowance for doubtful accounts 10 0 Interest and dividend income (2) (22) Interest expenses 67 173 Amortization of share issuance costs 5 - Settlement income (2,234) (372) Gain on sale of non-current assets (2) (1) Loss on sales of non-current assets 0 1 Loss on abandonment of non-current assets 12 1 Gain on sale of shares of subsidiaries and associates - (155) Gain on sale of businesses - (48) Decrease (increase) in trade receivables (749) (86) Decrease (increase) in accounts receivable - other (1,005) 543 Decrease (increase) in inventories 35 (308) Increase (decrease) in trade payables 66 (34) Increase (decrease) in accounts payable - other 353 391 Increase (decrease) in accrued expenses 42 (454) Increase (decrease) in contract liabilities (6) (63) Increase (decrease) in deposits received 237 167 Other, net 116 48 Subtotal 2,720 4,648 Interest and dividends received 2 23 Interest paid (67) (246) Settlement received 1,757 863 Income taxes paid (1,965) (1,801) Net cash provided by (used in) operating activities 2,447 3,486 Cash flows from investing activities Purchase of investment securities (409) (984) Proceeds from sale of investment securities 1,569 - Proceeds from withdrawal of time deposits 2 3 Purchase of property, plant and equipment (66) (205) Proceeds from sale of property, plant and equipment 14 8 Purchase of intangible assets (222) (289) Payments of leasehold and guarantee deposits (317) (44) Proceeds from refund of leasehold and guarantee deposits 31 53 Payments for acquisition of businesses (498) - Proceeds from sale of businesses - 50 Purchase of shares of subsidiaries resulting in change in scope of consolidation (10,771) (6,618) Proceeds from sale of shares of subsidiaries resulting in change in scope of consolidation - 779 Other, net (51) 119 Net cash provided by (used in) investing activities (10,719) (7,128) ― 11 ―
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(Millions of yen) For the fiscal year ended December 31, 2024 For the fiscal year ended December 31, 2025 Cash flows from financing activities Repayments of long-term borrowings (3,147) (4,713) Proceeds from long-term borrowings 15,700 5,000 Proceeds from disposal of treasury shares 43 24 Purchase of treasury shares (0) (5,326) Purchase of shares of subsidiaries not resulting in change in scope of consolidation (660) (1,719) Other, net (36) (43) Net cash provided by (used in) financing activities 11,899 (6,776) Effect of exchange rate change on cash and cash equivalents 14 1 Net increase (decrease) in cash and cash equivalents 3,641 (10,417) Cash and cash equivalents at beginning of period 15,351 18,993 Cash and cash equivalents at end of period 18,993 8,575 ― 12 ―
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(5) Important notes regarding semi-annual consolidated financial statements (Notes related to going concern assumptions) Not applicable (Segment information, etc.) (Segment information) 1. Overview of reportable segments (1) Classification of reportable segments The business segments the Company reports are the business units from which individual financial information can be obtained, and on which the Board of Directors can conduct periodic reviews to determine the appropriate distribution of operational resources and evaluate business performance. The Company consists of service-specific segments based on business divisions, and the Company’s reportable segments are composed of the following three units: HR PF Business, Medical PF Business, and New Services Segment. (2) Services provided by each reportable segment The HR PF Business handles and provides various services to address issues such as labor shortages and uneven regional distribution of medical professionals in the medical healthcare field. These include JobMedley, a hiring support service that runs on a placement fee business model, GUPPY Kyujin, a pay-per-click recruitment system, and JobMedley academy, an online training system. The Medical PF Business handles and provides various services to improve the operational efficiency of medical institutions and enhance patients' access to medical care. These include CLINICS, a cloud medical support system for clinics without beds, MEDIXS, a system for dispensing pharmacies, MEDLEY, a medical information service, MALL, an electronic medical record system for hospitals, DENTIS, a cloud support system for dental offices, @link, an appointment service app for hospitals and in-patient clinics, and Medley Funding Support, a factoring service for medical claims receivables. The New Services Segment handles and provides services such as Minkai, a referral service for nursing homes and elderly care facilities. (3) Notes on changes to reportable segments In consolidated FY2025, we have finalized our plan to provide our Medley Funding Support service in coordination with system usage data from the Medley Group and data from our medical billing system. This service was reclassified from the New Services Segment to the Medical PF Business Segment. The segment information for consolidated FY2024 has been restated to conform to the current segment classifications. 2. Method of calculating sales and profit (loss), identifiable assets and liabilities, and other items by reportable segment Accounting methods for reportable segments are basically the same as those used when creating financial statements. Profit by reportable segment is reported on an operating profit basis. 3.Information on net sales and operating profit (loss), identifiable assets and liabilities, other items by reportable segment, and revenue analysis information Consolidated Fiscal Year 2024 (from January 1, 2024 to December 31, 2024) (Million yen) Reportable segment Adjustment (Note) Amount in the consolidated financial statement HR PF Business Medical PF Business New Services Total Net sales Revenue from contracts with customers 21,104 7,348 610 29,062 ― 29,062 Other revenue ― 239 ― 239 ― 239 Sales to external customers 21,104 7,587 610 29,302 ― 29,302 Inter-segment sales and transfers 4 ― ― 4 (4) ― Total 21,108 7,587 610 29,306 (4) 29,302 Segment profit (loss) 7,723 (15) (377) 7,331 (5,004) 2,326 Segment assets 10,898 6,312 58 17,269 27,932 45,201 Other items Depreciation 546 230 16 794 109 903 Amortization of goodwill 470 303 ― 773 ― 773 Increase in property, plant and equipment and intangible assets 11,203 1,871 ― 13,075 55 13,130 ― 13 ―
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Notes: 1. Segment profit (loss) adjustments of (¥5,004 million) include intersegment eliminations and corporate expenses unallocated to reportable segments. 2. Segment profit (loss) is adjusted under operating profit on the Consolidated Statements of Income. 3. Adjustments of identifiable segment assets of ¥27,932 million mainly include company-wide assets unallocated to reportable segments. 4. In consolidated FY2024, the Company acquired Lalune business of Ateam Wellness, Inc. and increases in tangible fixed assets and intangible fixed assets include goodwill associated with this acquisition. Also, in consolidated FY2024, GUPPY’s Inc. and Offshore Inc. were brought into the scope of consolidated accounting and increases in tangible fixed assets and intangible fixed assets include goodwill associated with the acquisition of the shares of GUPPY’s Inc. and Offshore Inc. Consolidated financial results for consolidated FY2025 (January 01, 2025, to December 31, 2025) (Million yen) Reportable segment Adjustment (Note) Amount in the consolidated financial statement HR PF Business Medical PF Business New Services Total Net sales Revenue from contracts with customers 26,319 9,006 1,088 36,414 ― 36,414 Other revenue ― 372 ― 372 ― 372 Sales to external customers 26,319 9,378 1,088 36,786 ― 36,786 Inter-segment sales and transfers 2 ― ― 2 (2) ― Total 26,321 9,378 1,088 36,788 (2) 36,786 Segment profit (loss) 9,085 (454) (769) 7,861 (5,711) 2,150 Segment assets 9,915 12,257 1,206 23,379 17,873 41,252 Other items Depreciation 604 354 50 1,009 92 1,102 Amortization of goodwill 551 697 107 1,355 ― 1,355 Increase in property, plant and equipment and intangible assets 1 7,961 1,340 9,303 147 9,451 Notes: 1. Segment profit (loss) adjustments of (¥5,711 million) include intersegment eliminations and corporate expenses unallocated to reportable segments. 2. Segment profit (loss) is adjusted under operating profit on the Consolidated Statements of Income. 3. Adjustments of identifiable segment assets of ¥17,873 million mainly include company-wide assets unallocated to reportable segments. 4. In consolidated FY2025, the Company consolidated ASFONTRUST NETWORK Inc., AxisRoot Holdings, Inc., and its subsidiaries and increases in tangible fixed assets and intangible fixed assets include goodwill, customer-related assets, and technical assets associated with the acquisition of the shares in these companies. (Related information) Consolidated Fiscal Year 2024 (from January 1, 2024 to December 31, 2024) 1. Information about each product or service This information is omitted here because similar information is disclosed in Segment information. 2. Information for geographical regions (1) Net sales This information is omitted because sales to external customers in Japan account for over 90% of the net sales in the consolidated statements of income. (2) Property, plant and equipment (Million yen) Japan U.S. Total 431 58 490 3. Information about major customers This information is omitted because no customer accounts for over 10% of the net sales in the consolidated statements of income. ― 14 ―
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Consolidated Fiscal Year 2025 (from January 1, 2025 to December 31, 2025) 1. Information about each product or service This information is omitted here because similar information is disclosed in Segment information. 2. Information for geographical regions (1) Net sales This information is omitted because sales to external customers in Japan account for over 90% of the net sales in the consolidated statements of income. (2) Property, plant and equipment This information is omitted because non-current assets in Japan account for over 90% of the non-current assets in the consolidated statements of assets. 3. Information about major customers This information is omitted because no customer accounts for over 10% of the net sales in the consolidated statements of income. (Information on impairment losses on non-current assets by reportable segment) Consolidated Fiscal Year 2024 (from January 1, 2024 to December 31, 2024) Not applicable Consolidated Fiscal Year 2025 (from January 1, 2025 to December 31, 2025) Not applicable (Information regarding the amount of amortization of goodwill and the unamortized balance for each reporting segment) Consolidated Fiscal Year 2024 (from January 1, 2024 to December 31, 2024) (Million yen) Reportable segment Other Company-wide/ amortization Total HR PF Business Medical PF Business New Services Total Balance at end of period 4,640 3,235 ― 7,876 ― ― 7,876 Notes: Information on amount of amortization of goodwill is omitted here because similar information is disclosed in Segment information. Consolidated Fiscal Year 2025 (from January 1, 2025 to December 31, 2025) (Million yen) Reportable segment Other Company-wide/ amortization Total HR PF Business Medical PF Business New Services Total Balance at end of period 4,089 7,808 963 12,861 ― ― 12,861 Notes: Information on amount of amortization of goodwill is omitted here because similar information is disclosed in Segment information. (Information regarding the amount of gain on negative goodwill for each reporting segment) Not applicable ― 15 ―
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(Business combinations, etc.) (Business combination via transaction) 1. Acquired shares of ASFON TRUST NETWORK Inc. (1) Summary of business combination 1) Name and description of business of acquired corporation Name of acquired corporation: ASFON TRUST NETWORK Inc. Description of business activities: Introduction of potential residents of nursing care facilities to nursing care facilities, etc. 2) Main purpose of business combination ASFON TRUST NETWORK Inc. has built strong brand recognition and high levels of trust from referral sources such as hospitals and in-home nursing care support offices, as well as from nursing facility residents and their families, through development of its Minkai business. The acquisition will strengthen the Company’s hospital discharge coordination service. More specifically, it will expand the functionality of the Company’s hospital discharge coordination service which includes the Renkei-san hospital discharge coordination service and encourage its use not only by hospitals, but also by the assisted living nursing care support businesses to which ATN provides introductions. The acquisition will also allow the Company to respond to the needs of many customers by leveraging its strengths in online services, and ATN's Minkai business, with its strengths in face-to-face services. 3) Business combination date January 6, 2025 (Deemed acquisition date: January 1, 2025 ) 4) Legal form of business combination Acquisition of shares in exchange for cash. 5) Name of acquired company after acquisition Name not changed. 6) Percentage of voting rights acquired Voting rights ratio acquired on the date of the business combination 100% 7) Main basis for determining the acquiring company The Company will acquire 100% of ASFON TRUST NETWORK Inc.'s voting rights through the acquisition of shares in exchange for cash. (2) Period of acquired company's business results included in annual consolidated financial statements January 1, 2025 to December 31, 2025 (3) Acquisition cost and breakdown by type of considerations Consideration paid in cash: 1,300 million yen Acquisition cost: 1,300 million yen (4) Breakdown and amount of main costs related to acquisition Compensation for advisory services 15 million yen (5) Amount, reason for recognition, amortization method, and period of goodwill 1) Goodwill recognized 1,070 million yen 2) Reason for recognition Mainly recognized based on excess earning power expected from future business development. 3) Amortization method and period of goodwill Goodwill will be amortized evenly using the straight-line method for a period of not more than 20 years, which is determined in consideration of its estimated period of effect. (6) Amount and major breakdown of assets received and liabilities assumed on business combination date Current assets 381 million yen Non-current assets 476 million yen Total assets 858 million yen Current liabilities 198 million yen Non-current liabilities 430 million yen Total liabilities 629 million yen ― 16 ―
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2. Acquisition of shares of AxisRoot Holdings, Inc. and its subsidiaries (1) Summary of business combination 1) Name and description of business of acquired corporation Name of acquired corporation Description of business activities AxisRoot Holdings, Inc. Management of owned companies doing business in planning, development, operation and sales of systems in the medical field etc. Axis, Inc. Planning, development, operation and sales of systems in the medical field Axis Innovation, Inc. Management consulting and related services using internet-based systems Notes: Axis, Inc. and Axis Innovation, Inc. are wholly owned subsidiaries of AxisRoot Holdings, Inc. 2) Main purpose of business combination AxisRoot Holdings, Inc. provides services that improve the operational efficiency of medical professionals and support the smooth receipt of medical care by patients. The MEDIXS cloud-based electronic medication history system developed and provided by Axis, Inc., a core subsidiary of AxisRoot Holdings, has a high customer satisfaction rate owing to its excellent UI/UX and in-home care support functions. The acquisition will enable us to leverage the customer base of our Pharms business to expand the number of customers for MEDIXS, which will lead to improvement of the Company’s ARPU in the dispensing pharmacies business domain. Therefore, the Company believes this acquisition strongly complements our basic strategy of “maximizing the number of customer offices and improving ARPU,” and expects to greatly expand the value provided by the Medley Group in the dispensing pharmacies business domain. 3) Business combination date January 31, 2025 (Deemed acquisition date: February 28, 2025) 4) Legal form of business combination Acquisition of shares in exchange for cash. 5) Name of acquired company after acquisition Name not changed 6) Percentage of voting rights acquired Voting rights ratio acquired on the date of the business combination: 76.7% (Note) The voting rights ratio is calculated based on the number of shares prior to the effective date of the reverse stock split. 7) Main basis for determining the acquiring company The Company exchanged cash for shares for the purpose of acquiring a majority of the voting rights of AxisRoot Holdings, Inc. (2) Period of acquired company's business results included in annual consolidated financial statements March 1, 2025 to August 31, 2025 (Note) AxisRoot Holdings, Inc. and its subsidiaries were absorbed into our company through a merger effective September 1, 2025. (3) Acquisition cost and breakdown by type of considerations Consideration cash 6,138 million yen Acquisition cost 6,138 million yen (4) Breakdown and amount of main costs related to acquisition Compensation for advisory services 35 million yen (5) Amount, reason for recognition, amortization method, and period of goodwill 1) Goodwill recognized 5,187 million yen 2) Reason for recognition Mainly recognized based on the future earnings potential from the expected future development of businesses. 3) Amortization method and period of goodwill Goodwill will be amortized evenly using the straight-line method for a period of not more than 20 years, which is determined in consideration of its estimated period of effect. ― 17 ―
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(6) Amount and major breakdown of assets received and liabilities assumed on business combination date Current assets 1,161 million yen Non-current assets 2,879 million yen Total assets 4,041 million yen Current liabilities 1,646 million yen Non-current liabilities 1,155 million yen Total liabilities 2,802 million yen (7) Estimated amount and calculation method of the impact of the business combination on the consolidated statement of income for consolidated FY2025 assuming that the business combination was completed on the first day of consolidated FY2025 This information is omitted due to lack of materiality. (Additionally acquired subsidiary shares) (1) Summary of transactions 1) Name of acquired corporation: AxisRoot Holdings, Inc. 2) Period of additional purchase April 18, 2025 (Deemed acquisition date: March 1, 2025) 3)Legal form Acquisition of shares in exchange for cash. 4) Percentage of voting rights acquired Voting rights ratio before the date of additional acquisition 76.70% Voting rights ratio additionally acquired 15.90% Voting rights ratio after additional acquisition 92.60% Notes: The voting rights ratio is calculated based on the number of shares prior to the effective date of the reverse stock split. (2) Overview of accounting methods applied The business combination, classified as a transaction under common control, has been recognized as a transaction with non-controlling shareholders in accordance with the “Accounting Standard for Business Combinations” and the “Guidance on Accounting Standards for Business Combinations and Accounting Standards for Business Divestitures.” (3) Acquisition cost and breakdown by type of considerations Consideration cash 1,269 million yen Acquisition cost 1,269 million yen (4) Changes in equity related to transactions with noncontrolling shareholders Capital surplus decreased by 1,072 million yen due to the acquisition of subsidiary shares from noncontrolling shareholders. ― 18 ―
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(Business Combination through Conversion to Wholly Owned Subsidiary via Simplified Share Exchange) (1) Overview of the share exchange 1) Name of wholly owned subsidiary in the share exchange AxisRoot Holdings, Inc. 2) Effective date of share exchange April 30, 2025 (Deemed acquisition date: March 1, 2025) 3) Legal form of business combination Share exchange wherein the Company became the wholly owning parent company and AxisRoot Holdings, Inc. became the wholly owned subsidiary. 4) Percentage of voting rights acquired Voting rights ratio before the date of additional acquisition 92.60% Voting rights ratio acquired via simplified share exchange 7.40% Voting rights ratio after additional acquisition 100.00% Notes: The voting rights ratio is calculated based on the number of shares prior to the effective date of the reverse stock split. (2) Overview of accounting methods applied The business combination, classified as a transaction under common control, has been recognized as a transaction with non-controlling shareholders in accordance with the “Accounting Standard for Business Combinations” and the “Guidance on Accounting Standards for Business Combinations and Accounting Standards for Business Divestitures.” (3) Matters related to calculation of acquisition cost 1) Acquisition cost and breakdown by type of considerations Consideration common shares of the Company (treasury shares) 530 million yen Acquisition cost 530 million yen 2) Details of allotment related to the share exchange company name The Company (wholly owning parent company) AxisRoot Holdings, Inc. (wholly owned subsidiary) Share exchange ratio 1 158,718 Number of shares allotted and delivered via the share exchange common shares of the Company : 158,718 shares The Company engaged an independent third-party institution, separate from both the Company and AxisRoot Holdings, Inc., to ensure fairness and reasonableness in calculating the share exchange ratio for this share exchange. Notes: 1. The reduction in the number of shares resulting from the reverse stock split has been taken into account in the calculation of the per-share value of AxisRoot Holdings, Inc. 2. All shares delivered by the Company in the share exchange were allocated from treasury shares. (4) Changes in equity related to transactions with noncontrolling shareholders Capital surplus decreased by 438 million yen due to the acquisition of subsidiary shares from noncontrolling shareholders (Sale of shares in subsidiaries) (1) Purpose of the sale of subsidiary shares In March 2021, the Company acquired MEDiPASS Co., Ltd. with the purpose of obtaining its online training system. Thereafter, the online training system business was transferred to the Company and rebranded as JobMedley academy and has achieved continued growth. MEDiPASS Co., Ltd., which operates a business providing management support for home healthcare agencies and nursing care providers, has also continued to achieve stable results. However, no additional investments were made in the business for three years since the acquisition because the nature of its business is different from technology businesses. In 2024, the Company received a request from the management team of MEDiPASS Co., Ltd. that they are willing to pursue a growth strategy with a medium-to-long-term perspective independently from the Company. The Company has determined that MBO is the best option for both parties. Accordingly, the Company has decided to transfer all shares of MEDiPASS Co., Ltd. to newly established MEDiPASS HOLDINGS Co., Ltd., fully owned by Hiroshi Oda, Representative Director and CEO of MEDiPASS Co., Ltd. (2) Details regarding sale of shares of subsidiary 1) Name of company to which shares will be sold MEDiPASS HOLDINGS Co., Ltd. 2) Date of sale January 6, 2025 3) Sale price 928 million yen 4) Loss/gain on sale of shares 155 million yen ― 19 ―
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(Per share information) For the fiscal year ended December 31, 2024 For the fiscal year ended December 31, 2025 Net assets per share 621.43 Yen 478.95 Yen Net profit (loss) per share 86.17 Yen 30.62 Yen Diluted net profit per share 85.62 Yen 30.47 Yen Notes: Methods used to calculate net profit per share and diluted net profit per share are shown below. For the fiscal year ended December 31, 2024 For the fiscal year ended December 31, 2025 Net profit (loss) per share Net profit (loss) attributable to owners of parent (million yen) 2,798 975 Amount not attributable to common shareholders (million yen) - - Net profit attributable to parent company shareholders of common stock (million yen) 2,798 975 Average number of common shares during fiscal year (share) 32,474,847 31,866,284 Diluted net profit per share Net profit adjustment attributable to owners of parent (million yen) - - Amount of increase in common shares (share) 207,747 148,997 Descriptions of potentially non-dilutive common shares that were not included in the calculation of diluted net profit per share - - (Significant Subsequent Events) (Substantial Borrowing of Funds) The Company resolved at its Board of Directors meeting held on January 22, 2026, to borrow funds as follows for the purpose of securing long-term working capital and funds for the acquisition of treasury shares, and executed the borrowing on January 30, 2026. Lender Mizuho Bank, Ltd. Sumitomo Mitsui Banking Corporation Loan Amount 3,500 million yen 1,500 million yen Interest Rate Base rate + spread Loan Drawdown Date January 30, 2026 January 30, 2026 Scheduled Repayment Date January 31, 2031 January 31, 2031 Collateral None None Guarantee None None ― 20 ―