■Future outlook
2. Progress of the Mid-Term Management Plan
Interspace ＜2122＞ announced a three-year medium-term management plan (2024/9 to 2026/9) at the beginning of the fiscal year, and set sales of 8.5 billion yen, operating income of 1.5 billion yen, and ROE of 15% or more as management numerical targets for the 2026/9 fiscal year, which is the final year. The three-year average annual growth rate is 2.4% in sales and 43.3% in operating profit. The operating margin will rise from 10.9% for the fiscal year ending 2023/9 to 17.6% for the fiscal year ending 2026/9, and it is planned that profitability will be greatly improved in the future. It takes into account that overseas businesses and comparison-type media businesses that are positioned as growth businesses will shift from the investment phase to the monetization phase.
The 2024/9 fiscal year, which is the first year, is expected to surpass the initial plan, and it is a smooth start. However, the upward factor is due to the recovery in profitability of the existing business “Mamasta,” and it is still unclear whether the investment business can move to the monetization phase. For this reason, it is likely that the 2026/9 fiscal year will be raised to a balance of balance level in growth businesses, and performance targets will be achieved due to the growth of existing businesses in the domestic performance advertising business, marketing solution business, and content-type media business.
If monetization of growth businesses, especially overseas businesses, becomes visible, it should become realistic to “aim for Asia's top position in the performance marketing area for the global market,” which the company has set as its medium-term vision, and we will work on building a growth foundation to realize the vision over the next 3 years. At our company, if we have plans to monetize growth businesses by the 2026/9 fiscal year, there is a high possibility that profit growth in the 2-digit range will continue as these businesses drive profits from the 2027/9 fiscal year onwards.
(1) Performance marketing business
In the domestic performance advertising business, which is the main force, it is expected that stable growth in the latter half of the 1-digit range will continue in the future as a cost-effective advertising method, including influencer marketing, and in addition to determining targets for growing markets and clients and proceeding with customer development, we aim to maximize profits by improving productivity by reviewing cost structures. Also, for in-house products of store-type DX solutions and stock businesses such as “SiteLead,” we will strengthen promotions aimed at customer acquisition, and at the same time expand the customer base by improving usability through enhanced functions, and improve profitability.
As for overseas subsidiaries, it is a policy to promote recruitment and development of excellent human resources, including management, and expand partner media including influencers along with acquiring new advertisers in order to respond to various advertisement demands. The digital advertising market in the Southeast Asian market is expected to continue to grow in the 2-digit range along with economic development, and the idea is to make it a medium- to long-term growth driver by building a system that captures these demands.
(2) Media business
As for content-type media, which is the main force, in addition to constructing media value that is not dependent on search inflows by utilizing brand power, etc., we aim to raise the level of earnings by working to establish and develop new profit models. Meanwhile, in comparison/review media positioned as growth businesses, we will promote human resource recruitment/development and sharing of know-how to enhance content, and at the same time actively invest in “database-type media (cram school, etc.) x vertical SaaS,” including M&A.
(Author: FISCO Visiting Analyst Joe Sato)