User Local (3984): FY2025 Results Summary — Record Sales and Profits as Generative AI Services Expand

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

Note: User Local has a June fiscal year-end and labels the fiscal year ended June 30, 2026 as “FY2026” (also “FY2026/6”) in its presentation; this site classifies it as FY2025. The body text and tables below keep the company’s own labels (FY2026 = year ended June 2026; FY2027 = year ending June 2027).

User Local, Inc., which develops big data analysis tools and AI-related tools, reported FY2026 net sales of 5,343 million yen (+16.6% YoY) and operating profit of 2,196 million yen (+11.4% YoY), with net sales and each profit line reaching record highs. The company describes the result as a consecutive increase in sales and profit, marking 19 consecutive periods of increased revenue and profits, and states that the total number of contracts exceeds 6,000. For FY2027, it forecasts record-high net sales of 6,081 million yen (+13.8%) but lower operating profit of 2,149 million yen (△2.1%), on the assumption that AI-related costs will continue to rise. The annual dividend is planned at 30 yen per share, up 6 yen.

Full-Year Results (FY2026/6 Actual)

Net sales rose 16.6% from 4,581 million yen in FY2025/6 to 5,343 million yen, 101.1% of the forecast of 5,284 million yen disclosed in August 2025. Operating profit increased 11.4% to 2,196 million yen (99.5% of the 2,207 million yen forecast), ordinary profit increased 12.1% to 2,212 million yen (100.2% of the 2,207 million yen forecast), and profit increased 14.4% to 1,634 million yen (107.3% of the 1,523 million yen forecast). The operating profit ratio was 41.1% and earnings per share (EPS) were 102.6 yen.

Item (millions of yen)	FY2025/6	FY2026/6	YoY	FY2026/6 Forecast (Aug 2025 disclosure)	Progress rate
Net Sales	4,581	5,343	+16.6%	5,284	101.1%
Operating Profit	1,971	2,196	+11.4%	2,207	99.5%
Ordinary Profit	1,972	2,212	+12.1%	2,207	100.2%
Profit	1,429	1,634	+14.4%	1,523	107.3%

Business Results

The company develops its business in three areas: (1) Digital Marketing by SaaS, including an all-in-one web analysis tool and tools to streamline SNS operations; (2) AI DX SaaS, including the enterprise generative AI platform “ChatAI” and the “Support Chatbot” that automates responses to customer and employee inquiries; and (3) AI R&D Products such as GenAI Checker, AI Writer, Slides GenAI and a text mining tool. According to the presentation, sales of both AI DX by SaaS and Digital Marketing by SaaS increased and reached record highs. The company states that its generative AI services for businesses expanded in awareness and adoption, supported by proactive marketing initiatives such as taxi advertisements, and that adoption by major corporations and government agencies has grown. Customer cases presented include Kumamoto University and Hiroshima Electric Railway Co., Ltd. The presentation does not disclose sales or profit figures by business area.

Highlight (FY2026)	Value
Net Sales	5,343 million yen
Operation Profit ratio	41.1%
Earnings Per Share (EPS)	102.6 yen
Number of Contracts	over 6,000
Consecutive periods of increased revenue and profits	19 periods
Dividend Per Share	24 yen (interim 10 yen, year-end 14 yen)

FY2027/6 Full-Year Forecast

For FY2027, User Local forecasts net sales of 6,081 million yen (+738 million yen, 13.8%), operating profit of 2,149 million yen (△46 million yen, △2.1%), ordinary profit of 2,179 million yen (△32 million yen, △1.5%) and profit of 1,503 million yen (△131 million yen, △8.0%). The company says it is aiming for record-high sales by continuing growth investments in AI-related services, and formulated the plan based on the assumption that AI-related costs will continue to rise.

Item (millions of yen)	FY2026 Results	FY2027 Forecasts	Increase/decrease	YoY change
Net Sales	5,343	6,081	+738	13.8%
Operating Profit	2,196	2,149	△46	△2.1%
Ordinary Profit	2,212	2,179	△32	△1.5%
Profit	1,634	1,503	△131	△8.0%

The presentation cites three factors behind rising AI-related costs: increased use of the service, as customers advance their use of sophisticated AI applications involving image and audio data and large-scale documents; a temporary rise in system implementation costs as the supply of AI infrastructure (GPUs, memory and SSDs) fails to keep up with demand; and exchange rate fluctuations, since fees for generative AI models are denominated in U.S. dollars. While aiming to “maximize the number of contracts,” the company plans to reduce AI costs by leveraging low-cost AI models and open models (including validation of local LLMs), developing high-value-added products using AI, and establishing a high-speed development framework using generative AI such as a “Coding Agent.”

Shareholder Returns

The annual dividend for FY2026 was 24 yen per share (interim dividend 10 yen, year-end dividend 14 yen), up from 14 yen in FY2025, with a payout ratio of 23.4%. The company describes FY2026 as a year of actively enhanced shareholder returns through the payment of an interim dividend, the acquisition and retirement of treasury stock, and the introduction of shareholder benefits. Treasury stock was acquired during the period from 2026/2/16 to 2026/8/5, and 100,000 shares of treasury stock were retired on 2026/5/29 (0.61% of the total number of shares outstanding prior to the retirement). Under the shareholder benefit program introduced from FY2026, shareholders holding 100 or more shares at the end of June each year receive a Digital Gift® of 3,000 yen. For FY2027, the company plans an annual dividend of 30 yen per share (interim 15 yen, year-end 15 yen), up 6 yen, for a payout ratio of 31.4%.

Fiscal year	Interim (yen)	Year-end (yen)	Annual Dividend Per Share (yen)	Payout ratio
2025/6	n/a	n/a	14.0	15.7%
2026/6	10.0	14.0	24	23.4%
2027/6 (Estimated)	15.0	15.0	30.0	31.4%

Future Focus Areas

User Local says it is advancing AI R&D centered on ChatAI while integrating this AI technology into existing services. It has implemented a “Custom AI Agent” in UserLocal ChatAI that lets users create AI agents tailored to their own operations, and is expanding the implementation of AI agents in its Digital Marketing SaaS: User Insight offers AI-generated analysis and improvement proposals for website traffic data, and Social Insight uses generative AI to generate post ideas, assess the risk of a backlash, categorize customer reviews and report on reactions to posts. The company is also developing a “Voice AI Agent” to handle website visitor inquiries through voice interaction, and continues to develop generative AI support tools specialized for individual tasks, such as UserLocal Slides GenAI, UserLocal AI Writer and UserLocal GenAI Checker.

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.