Pasona Group (2168): FY2025 Results Summary — Ordinary Profit Back in the Black as Expo Income Lifts Flat Sales

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Pasona Group Inc. reported net sales of 308.5 billion yen for FY2025, down 0.7 billion yen (0.2%) from the prior year, while gross profit rose 2.3 billion yen (+3.4%) to 70.3 billion yen on a 0.8pt improvement in the gross profit margin to 22.8%. The operating loss narrowed to (1.15) billion yen from (1.24) billion yen, and ordinary profit returned to a profit of 0.14 billion yen from a loss of (0.46) billion yen, helped by sponsorship and product sales income from Expo 2025 Osaka, Kansai, Japan. Loss attributable to owners of parent narrowed to (3.39) billion yen, an improvement of 5.27 billion yen. For FY2026 the company forecasts net sales of 325,000 million yen and operating profit of 1,500 million yen.

Note on fiscal-year labels: Pasona Group’s fiscal year ends on May 31, and the presentation labels the year ended May 31, 2026 as “FY2025” and the year ending May 31, 2027 as “FY2026”. Labels in the text and tables below follow the presentation as reported.

Consolidated Results (Full-Year Actual)

Net sales from BPO Solutions and Career Solutions declined from the previous fiscal year, while net sales from other segments increased. Operating profit for the Life Solutions and Regional Revitalization and Tourism Solutions segments improved year on year, but SG&A expenses rose on higher IT-related costs and personnel expenses. Non-operating income increased on sponsorship and product sales income from Expo 2025 Osaka, Kansai, Japan. Although expenses related to the Expo exhibition were recorded as extraordinary losses, the deficit narrowed.

Item (Billions of yen)	FY25	FY24	Increase/Decrease	%
Net sales	308.5	309.2	(0.7)	(0.2)%
Gross profit	70.3	68.0	+2.3	+3.4%
Selling, general and administrative expenses	71.4	69.2	+2.2	+3.2%
Operating loss	(1.15)	(1.24)	+0.09	ー
Ordinary profit (loss)	0.14	(0.46)	+0.60	ー
Loss attributable to owners of parent	(3.39)	(8.66)	+5.27	ー

On a margin basis, the gross profit margin was 22.8% (YoY +0.8pt), the SG&A margin 23.2% (YoY +0.8pt) and the operating profit margin (0.4)% (YoY +0.0pt). Within SG&A, personnel expenses rose 1.20 billion yen on factors such as higher retirement benefit expenses, and IT-related expenses rose 1.02 billion yen following revisions to IT infrastructure usage fees. In the fourth quarter alone (3 months), net sales were 79.0 billion yen (down 1.3 billion yen, (1.6)%), gross profit 18.8 billion yen (+0.5 billion yen, +2.6%), operating profit 0.18 billion yen (+0.14 billion yen, +326.6%) and ordinary profit 0.43 billion yen (+0.04 billion yen, +11.2%).

Expo-Related and Non-Operating / Extraordinary Items

Non-operating income rose to 2,404 million yen (+1,057 million yen, +78.6%), including sponsorship money income of 542 million yen and Expo product sales income of 540 million yen, while non-operating expenses rose to 1,116 million yen (+547 million yen, +96.4%), including Expo cost of product sales of 294 million yen. Extraordinary income was 918 million yen (+739 million yen, +414.4%), including a gain on receipt of donated non-current assets of 726 million yen in connection with the acquisition of exhibition content. Extraordinary losses fell to 2,063 million yen from 5,545 million yen ((62.8)%), including Expo exhibit related expenses of 1,075 million yen and an impairment loss of 498 million yen. Loss before income taxes was (1,006) million yen, and income taxes were 2,321 million yen.

Segment Results

HR Solutions net sales declined 1.2% to 283,241 million yen and its operating profit fell 3.9% to 14,235 million yen. Operating profit for BPO Solutions and Expert Solutions is disclosed on a combined basis and rose 2.4% to 9,990 million yen. Global Solutions, Life Solutions and Regional Revitalization and Tourism Solutions all grew net sales, and Life Solutions moved into operating profit while the Regional Revitalization and Tourism Solutions operating loss narrowed.

Segment (Millions of yen)	Net sales FY25	Net sales FY24	%	Operating profit (loss) FY25	Operating profit (loss) FY24
BPO Solutions (Contracting, Outsourcing)	132,928	137,236	(3.1)%	9,990	9,759
Expert Solutions (Temporary Staffing)	136,279	134,807	+1.1%	combined with BPO Solutions	combined with BPO Solutions
Career Solutions (Placement/ Recruiting, Outplacement)	14,033	14,507	(3.3)%	4,244	5,048
HR Solutions	283,241	286,552	(1.2)%	14,235	14,808
Global Solutions (Overseas Human Resource Services)	12,128	11,407	+6.3%	266	401
Life Solutions (Childcare support, Life support, etc.)	9,684	8,623	+12.3%	475	(26)
Regional Revitalization and Tourism Solutions	8,296	7,083	+17.1%	(1,491)	(1,900)
Eliminations and Corporate	(4,854)	(4,425)	ー	(14,636)	(14,519)
Total	308,496	309,240	(0.2)%	(1,149)	(1,237)

In BPO Solutions, net sales fell 3.1% year over year due to the peak of large-scale contract projects and the completion of some projects, while orders for management support services such as the ProShare business rose and the gross profit margin improved to 22.7% (+1.4pt). In Expert Solutions, the number of new registrants increased by double digits on improvements to the registration process and the use of AI tools, while a decline in the contract closure rate kept the number of active workers at the same level as the previous period; net sales rose on a revision in the unit rate for temporary staffing fees. In Career Solutions, placement/recruiting productivity declined in the first half due to the replacement of internal systems, and sales efficiency declined in the second half due to staff turnover, while outplacement demand continued amid corporate structural reforms.

Balance Sheet and Cash Flows

Total assets decreased 29.6 billion yen to 235.5 billion yen as of May 31, 2026, with current assets down 49.7 billion yen to 139.2 billion yen and non-current assets up 20.2 billion yen to 96.2 billion yen. Liabilities fell 21.4 billion yen to 102.6 billion yen and net assets fell 8.2 billion yen to 132.9 billion yen; the equity ratio rose 3.0pt to 53.9%. Cash and deposits declined 48.0 billion yen, reflecting a 26.5 billion yen decrease in temporary deposits related to contracted projects and 21.8 billion yen of acquisitions of property, plant and equipment and intangible assets. Cash flows from operating activities were 2.9 billion yen (down 1.4 billion yen), investing activities (27.3) billion yen, financing activities 0.1 billion yen and free cash flows (24.4) billion yen; cash and cash equivalents at the end of the period were 54.6 billion yen.

FY2026 Forecast

For FY2026 the company forecasts net sales of 325,000 million yen (+5.3%), operating profit of 1,500 million yen, ordinary profit of 1,500 million yen (+984.8%) and a loss attributable to owners of parent of (1,000) million yen.

Item (Millions of yen)	FY26 Forecast	FY25	FY24	Increase/Decrease	%
Net sales	325,000	308,496	309,240	+16,503	+5.3%
Operating profit	1,500	(1,149)	(1,237)	+2,649	ー
Ordinary profit (loss)	1,500	138	(460)	+1,361	+984.8%
Loss attributable to owners of parent	(1,000)	(3,388)	(8,658)	+2,388	ー

Segment (Millions of yen)	Net sales FY26 Forecast	Net sales FY25	%	Operating profit (loss) FY26 Forecast	Operating profit (loss) FY25
BPO Solutions (Contracting, Outsourcing)	136,000	132,928	+2.3%	11,000	9,990
Expert Solutions (Temporary Staffing)	145,000	136,279	+6.4%	combined with BPO Solutions	combined with BPO Solutions
Career Solutions (Placement/ Recruiting, Outplacement)	15,000	14,033	+6.9%	4,700	4,244
HR Solutions	296,000	283,241	+4.5%	15,700	14,235
Global Solutions (Overseas Human Resource Services)	13,000	12,128	+7.2%	700	266
Life Solutions (Childcare support, Life support, etc.)	10,500	9,684	+8.4%	600	475
Regional Revitalization and Tourism Solutions	10,500	8,296	+26.6%	(1,500)	(1,491)
Eliminations and Corporate	(5,000)	(4,854)	ー	(14,000)	(14,636)
Total	325,000	308,496	+5.3%	1,500	(1,149)

The FY2025 result came in below the revised plan announced on June 25, 2026 (“Notice Concerning Revisions to Full-Year Consolidated Financial Forecasts for the Fiscal Year Ending May 2026”) for three reasons: the recruitment services business (Career Solutions) did not recover as much as expected during the fourth quarter, which is typically the peak sales period; at Expert Solutions the number of paid leave days taken during the Golden Week period was higher than expected and growth in the number of temporary staff was weaker than anticipated; and the launch of the gaming business, a new venture undertaken as part of Regional Revitalization and Tourism Solutions, and the opening of new lodging facilities were delayed compared to the original schedule.

Shareholder Returns

The dividend for the year ended May 31, 2026 is 75 yen per share (Ordinary 15.0 yen / Special 60.0 yen), and the forecast for the year ending May 31, 2027 is also 75 yen per share (Ordinary 15.0 yen / Special 60.0 yen). The company’s fundamental policy is to return value to shareholders in accordance with business performance, targeting a consolidated dividend payout ratio of 40%. During the term of “PASONA GROUP VISION 2030”, in order to ensure continuous and stable dividends that are not affected by temporary fluctuations in business performance, the company will implement a progressive dividend policy that maintains or increases dividends, with a minimum of 75 yen per share. The special dividend of 60 yen per share was resolved for each of the five fiscal years from May 2024 to May 2028 as a measure to increase shareholder returns following the sale of shares in a consolidated subsidiary in the fiscal year ended May 2024. Treasury shares were also purchased during the period ((2.5) billion yen impact on shareholders’ equity).

Dividends per share (yen)	FY24	FY25	FY26 (Forecast)
Total	75	75	75
Ordinary	15	15.0	15.0
Special	60	60.0	60.0
Dividends payout ratio (%)	–	–	–

Medium-Term Plan: PASONA GROUP VISION 2030

The company has designated the five-year period beginning with the fiscal year ending May 2026 (fiscal years ending May 2026 through May 2030) as “PASONA GROUP VISION 2030”, aiming to achieve sustainable growth and enhance corporate value through reforms to its revenue structure and growth investments. The financial targets for the fiscal year ending May 2030 are net sales of 400 billion yen, an ordinary profit ratio of 5%, ROE of 8% or higher and PBR of over 1. Three key strategies have been established: adding high value to BPO Solutions, deepening Regional Revitalization and Tourism Solutions, and creation of new industries, underpinned by strengthening human capital, strengthening DX and spreading the company’s philosophy.

Under the capital policy cash allocation, cash inflows are sourced from cash and deposits of 137.0 billion yen (end of FY23, reflecting a temporary increase from the sale of shares in affiliated companies in the fiscal year ended May 2024 with a gain on sale of 112.0 billion yen), leveraging interest-bearing debt and cash flows from operating activities. Cash outflows are allocated to growth investments of 65.0 billion yen or more, strengthening the management foundation of 30.0 billion yen or more, and returning value to shareholders of 17.0 billion yen or more.

FY2026 Business Strategy

In BPO Solutions, the company expects to continue to be affected by the peak-out of large-scale contract projects but plans to expand business in specialized fields and improve operational efficiency through the overhaul of its core systems, aiming to continue achieving the gross profit margin targets set out in the mid-term vision; BPO Solutions net sales are planned at 136.0 billion yen versus 132.9 billion yen in FY2025 and 137.2 billion yen in FY2024 (YoY +2.3%). In Regional Revitalization and Tourism Solutions, “Nijigen no Mori” saw an increase in visitor numbers, with FY2025 year-on-year growth of +20.3% in Experiences (Attractions) and +40.7% in Dining (Entertainment), and Awaji Island contributing +0.47 billion yen; the segment plans net sales of 10.5 billion yen in FY2026 against 8.3 billion yen in FY2025 and 7.08 billion yen in FY2024, with an operating loss of (1.50) billion yen versus (1.49) billion yen. The long-term stay preventive health retreat facility “THE PASONA natureverse retreat” opened on June 23.

As of May 31, 2026, the group comprised 66 consolidated subsidiaries and 4 equity-method affiliates, with 22,431 consolidated employees including contract workers and paid-in capital of 5,000 million yen.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.