Nomura Research Institute (4307): FY2025 Results Summary — Overseas Impairment Losses Weigh on Profit Despite Strong Domestic Growth

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

Nomura Research Institute (NRI) reported FY2025 (fiscal year ended March 31, 2026) results with revenue of JPY814,708mn, up 6.5% YoY, achieving the goal set under its previous medium-term plan (MTP2025). Operating profit fell 56.8% YoY to JPY58,273mn (7.2% margin) and profit attributable to owners of parent fell 83.7% YoY to JPY15,257mn, after the company recorded approximately JPY77 billion of impairment losses on goodwill and intangible assets in its Australian business and approximately JPY20 billion of impairment on a portion of Core BTS goodwill in its North American business. Domestic operations achieved growth in both revenue and profit across all segments, driven by robust demand and productivity gains, while overseas business faced delays in its business model transformation and a deteriorating market environment. Excluding these impairment losses, reference operating profit was JPY156,673mn, up 16.1% YoY; the company also revised its year-end dividend up by JPY3 and announced a JPY70 billion share buyback program.

Consolidated Results (Full-Year Actual)

Revenue rose 6.5% YoY to JPY814,708mn, exceeding the initial forecast of JPY810.0bn. Operating profit came to JPY58,273mn (7.2% margin), down 56.8% YoY and JPY91.7bn below the initial forecast of JPY150.0bn, mainly due to the impairment losses in the Australian and North American businesses; excluding these impairment losses, reference operating profit was JPY156,673mn (19.2% margin), up 16.1% YoY. Profit attributable to owners of parent fell 83.7% YoY to JPY15,257mn, and basic EPS was JPY26.62 versus JPY163.57 in FY2024, while ROE fell to 3.5% from 22.5%. Domestic (Japan) revenue grew 8.2% YoY to JPY705,986mn and Japan operating profit grew 20.5% YoY to JPY160,027mn (22.7% margin, +2.3pt).

Item	FY2025	FY2024	Change
Revenue (¥mn)	814,708	764,813	+6.5%
Operating Profit (¥mn)	58,273	134,907	-56.8%
Operating Profit excl. impairment losses, etc.* (¥mn)	156,673	134,907	+16.1%
Operating Margin	7.2%	17.6%	-10.5pt
Operating Margin excl. impairment losses, etc.*	19.2%	17.6%	+1.6pt
Profit Attributable to Owners of Parent (¥mn)	15,257	93,762	-83.7%
Basic EPS	¥26.62	¥163.57	-¥136.94
Annual Dividend per Share	¥77.00	¥63.00	+¥14.00
Dividend Payout Ratio	289.9%	38.6%	+251.3pt
ROE	3.5%	22.5%	-19.0pt
Japan Revenue (¥mn)	705,986	652,263	+8.2%
Japan Operating Profit (¥mn)	160,027	132,758	+20.5%

Segment Results

All four reportable segments in Japan achieved growth in both revenue and operating profit, driven by robust demand for AI consulting and legacy modernization projects, financial-institution system integration projects, and digital workplace (DWP) services. Financial IT Solutions revenue rose 8.7% YoY to JPY405,152mn, led by growth across Securities, Insurance, Banking and Other financial clients, with operating profit up 20.6% YoY to JPY74,255mn. Industrial IT Solutions, however, recorded a segment operating loss of JPY98,904mn (versus a profit of JPY24,287mn in FY2024), as domestic revenue and profit grew on newly acquired projects in manufacturing, transportation and other industries, while the segment’s overseas business booked impairment losses and saw decreased revenue and profit. Total order backlog at the end of FY Mar. 2026 rose 9.8% YoY to JPY470,632mn, with the portion expected to be recognized as revenue in the next fiscal year up 9.2% YoY to JPY439,468mn.

Segment	Metric	FY2025	FY2024
Consulting	Revenue (¥mn)	68,724	65,376
Consulting	Operating Profit (¥mn)	19,225	18,398
Financial IT Solutions	Revenue (¥mn)	405,152	372,574
Financial IT Solutions	Operating Profit (¥mn)	74,255	61,581
Industrial IT Solutions	Revenue (¥mn)	280,033	275,970
Industrial IT Solutions	Operating Profit (¥mn)	(98,904)	24,287
IT Infrastructure Services	Revenue (¥mn)	221,545	201,480
IT Infrastructure Services	Operating Profit (¥mn)	38,564	30,341

FY2026 Forecast

For FY2026 (fiscal year ending March 31, 2027), NRI forecasts revenue of JPY850.0bn, up 4.3% YoY versus the FY2025 reference value (excluding impairment losses) of JPY814.7bn, and operating profit of JPY175.0bn, up 11.7% YoY versus the JPY156.6bn reference value, for a 20.6% operating margin (+1.4pt). Profit attributable to owners of parent is forecast at JPY119.0bn, up 8.3% YoY, with basic EPS of JPY207.17. By segment, forecast revenue growth is led by Consulting (+10.1% YoY to JPY70.0bn) and Industrial IT Solutions (+6.7% YoY to JPY230.0bn), with Financial IT Solutions (+2.1% YoY to JPY465.0bn) and IT Infrastructure Services (+6.4% YoY to JPY82.0bn) also growing. Under MTP2028, the company targets overseas business revenue of approximately JPY120.0bn and an operating profit margin of 5%, prioritizing stable profitability over scale expansion in its Australian and North American operations.

Item	FY2026 Forecast	FY2025 (Reference, excl. impairment)
Revenue (¥bn)	850.0	814.7
Operating Profit (¥bn)	175.0	156.6
Operating Margin	20.6%	19.2%
Profit Attributable to Owners of Parent (¥bn)	119.0	109.8
Basic EPS	¥207.17	¥191.67
Annual Dividend per Share	¥84.00	¥77.00
– Interim (2Q)	¥42.00	¥35.00
– Year-End	¥42.00	¥42.00
Dividend Payout Ratio	40.5%	40.3%

Shareholder Returns

NRI revised its FY Mar. 2026 year-end dividend up by JPY3 from the initial forecast, bringing the full-year annual dividend to JPY77.00 per share (versus JPY63.00 in FY2024), for a dividend payout ratio of 289.9% (40.3% on a reference basis excluding impairment losses). For FY Mar. 2027, the company forecasts a further dividend increase of JPY7 to JPY84.00 per share (JPY42.00 interim, JPY42.00 year-end), a 40.5% payout ratio. Separately, NRI announced a share buyback program of up to 21,000,000 shares (3.66% of shares outstanding excluding treasury stock) for up to JPY70.0bn, to be executed between May 15, 2026 and August 31, 2026, as part of flexible capital measures to help achieve the MTP2028 ROE target of 25%; the company stated the impairment losses recorded in FY Mar. 2026 have no impact on cash flow.

Item	Details
FY2025 Annual Dividend per Share	¥77.00 (revised up ¥3.00 from initial forecast of ¥74.00)
FY2026 Annual Dividend per Share (Forecast)	¥84.00 (+¥7.00 YoY)
Share Buyback — Shares	Up to 21,000,000 shares (3.66% of shares outstanding excl. treasury stock)
Share Buyback — Amount	Up to ¥70.0 billion
Share Buyback — Period	May 15, 2026 – August 31, 2026

Medium-Term Plan / Overseas Business Topics

NRI recorded impairment losses of approximately JPY77.0bn on goodwill and other intangible assets of NRI Australia (formerly ASG) and Planit, reflecting significant deterioration in FY Mar. 2026 results versus plan and higher discount rates driven by rising interest rates, and approximately JPY20.0bn on a portion of Core BTS goodwill in North America, following a downward revision of business plans amid ongoing market uncertainty and delays in the timing of benefits from various measures. As part of its overseas reorganization, the company consolidated the related businesses of NRI-ITSA and NRI SecureTechnologies’ North America branch into Core BTS, which has been rebranded as NRI North America (NRI-NA), reducing the annual amortization burden by approximately JPY2.0bn following impairment of PPA assets; NRI Australia, after integrating Planit, was transferred from the Industrial IT segment to the Financial IT segment. Starting FY2026, the first year of MTP2028, the company is prioritizing domestic growth amid strong demand for modernization and AI utilization, while making upfront investments in overseas growth areas to further improve profitability.

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