AsiRo Q3 FY2025 slides reveal Legal Media strength, new insurance product launch

Introduction & Market Context

AsiRo Inc (7378) presented its third quarter fiscal year 2025 results on September 12, 2025, revealing a mixed performance across its business segments while announcing an upward revision to its full-year forecast. The company’s stock closed at 2,389 yen, down 1.38% on the day of the presentation, suggesting investors had a somewhat cautious reaction despite the improved outlook.

AsiRo operates in three main business segments: Media (comprising Legal Media and Derivative Media), HR, and Insurance. The company’s business model is strategically positioned to capitalize on the growing legal services market in Japan, where the number of lawyers is projected to increase from approximately 40,000 in 2020 to 70,000 by 2046.

Quarterly Performance Highlights

AsiRo reported revenue of 1,702 million yen for Q3 FY2025, representing a strong year-over-year increase of 42.4%, though declining 5.9% quarter-over-quarter. Operating profit reached 329 million yen, up 78.0% year-over-year but down 26.4% from the previous quarter. The operating profit margin stood at 19.3%, improving 3.9 percentage points year-over-year but declining 5.4 percentage points quarter-over-quarter.

As shown in the following financial summary:

Net profit attributable to owners of the parent more than doubled year-over-year to 213 million yen (+108.7%), though it decreased 36.4% from the previous quarter. The company’s employee count grew to 125, up 14.7% from the same period last year.

Detailed Financial Analysis

Breaking down performance by business segment reveals that Legal Media was the primary driver of growth, while other segments showed mixed results. Legal Media generated revenue of 1,028 million yen (+61.8% YoY) and operating profit of 431 million yen (+145.8% YoY). In contrast, Derivative Media saw its operating profit decline by 31.9% year-over-year despite a 21.4% increase in revenue, indicating challenges with profitability.

The segment breakdown illustrates these contrasting performances:

The HR Business, while posting revenue growth of 25.8% year-over-year to 53 million yen, operated at a loss during the quarter. However, management noted that monthly confirmation rates remained strong, suggesting potential for future improvement. The Insurance Business, still in its early stages, also operated at a loss as it continues to invest in growth.

Revenue composition shows Legal Media accounting for 57% of total revenue and 74% of operating profit, highlighting its importance to the company’s overall performance:

The quarterly revenue trend shows the continued growth of Legal Media, while Derivative Media experienced a significant decline in the most recent quarter:

Strategic Initiatives

A key highlight of the presentation was the launch of AsiRo’s new insurance product "bonobo" on July 1st. Unlike traditional legal insurance that covers costs after legal issues arise, bonobo aims to mitigate circumstances that cause legal issues in the first place. The product offers features including contract generation, background check services, AI legal check systems, and consulting services.

The company presented the following details about the new product:

The product is offered at 10,400 yen per month for individual use and 18,400 yen for small businesses. While currently in the investment phase and not yet profitable, management expects bonobo to begin generating profit in 2026 with significant revenue growth projected by 2030:

Forward-Looking Statements

Based on the strong performance in the first three quarters, AsiRo revised its full-year forecast upward. The company now expects revenue of 6,541 million yen (up 3.4% from the original forecast), operating profit of 1,378 million yen (up 8.9%), and net profit of 919 million yen (up 10.7%).

The dividend forecast was also increased by 11.5% to 37.80 yen per share, reflecting the company’s commitment to returning value to shareholders:

Progress toward the full-year targets is strong, with 77.1% of the revenue target, 85.6% of the operating profit target, and 88.8% of the net profit target already achieved through the first three quarters.

Competitive Industry Position

AsiRo’s business model is built around connecting legal service providers with clients across multiple platforms. The Legal Media business operates on a subscription model with fixed costs, allowing for strong profitability as the user base grows:

The number of active users in the Legal Media segment has grown steadily from 1,414 in Q3 FY2021 to 3,498 in Q3 FY2025, driving revenue growth from 852 million yen to 2,906 million yen over the same period.

Similarly, the Derivative Media business has seen substantial growth in both users and revenue, though recent challenges with ad operations have affected its profitability:

The company is well-positioned to benefit from the expansion of the internet advertising market in Japan, which has grown from 7,747 billion yen in 2010 to over 36,517 billion yen in 2024, as well as the increasing trend of lawyers working for corporations rather than independently.

While Q3 showed mixed results across segments, management expressed confidence in improvements for Q4, particularly in the Derivative Media business, and continues to invest in growth initiatives like the new bonobo insurance product to drive long-term value creation.

Full presentation:

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