Members, a Tokyo Prime-listed provider of digital specialists who work inside client teams, booked an operating loss of ¥389mn for the six months to September 2026, against a ¥263mn operating profit a year earlier. Revenue still rose 3.0% to ¥11.79bn. The pretax loss was ¥372mn and the loss attributable to owners was ¥262mn, or ¥20.44 a share. The prior-year comparatives are standalone figures that the company gives for reference after its move to consolidated accounts, and the interim summary is not covered by an auditor review.
Where management puts the shortfall
Members attributes the miss against its original plan to two causes. The first is external: some customers cut investment amid an unstable world situation, and demand for specialists in well-specified routine work, including operations and maintenance, coding, research and design production, fell faster than expected as generative AI took over such tasks. Management puts the effect on half-year revenue at about ¥550mn below plan. That figure combines the customer cuts and the AI effect, and it measures lost revenue against plan, not a year-on-year decline.
The second cause is utilization, which management says cost about ¥250mn of revenue against plan. Utilization across all digital specialists was 74.6% for the half, down 2.7 percentage points, after 74.2% in the first quarter. It reached 76.9% in September. Gross margin fell 2.8 points to 19.9%, which the company ties mainly to the lower utilization.
The mix shifted too. Value-added sales in the DX field, the company's digital-transformation work, rose ¥817mn (14.2%), while non-DX work such as web operations fell ¥495mn (9.2%) as Members continued a planned retreat from low-price jobs.
A forecast with little slack
Members cut its full-year operating profit forecast on 30 September (Earlier Tokyo Brief coverage). The new forecast is ¥200mn, down from ¥2.5bn, on revenue of ¥25.0bn. The interim summary leaves it unchanged and puts it 87.5% below the previous year. Hitting it requires second-half operating profit of ¥589mn, against ¥1.34bn in the same period last year.
The forecast assumes utilization of about 75% and unit prices about 8% higher than a year earlier, versus 74.6% and 7.2% in the half just ended. It counts no sales contribution from higher AI-transformation (AX) orders or utilization. Management's own estimates put the profit effect of each point of utilization at about ¥150mn and of each 1% of unit price at about ¥125mn. The year-end dividend forecast stays at ¥35 a share.
The pivot
Members set up an AX division on 1 July and aims to build 30 or more AX services this fiscal year, generate 1,000 AX-related sales discussions and train 230 AX consultants and engineers. AI and data-related revenue grew 80.2% and made up 15.5% of second-quarter revenue.
Headcount is not the lever. Digital specialists numbered 2,592 at the end of September, up 136 from March after 247 new graduates joined in April. Those in their second year or later fell by 24 to 2,345, and management says it prioritizes value-added sales per person over headcount. Its presentation concedes that it was overconfident about DX growth and held its forecast unchanged at the first quarter. The company expects the AX shift to show in results from the second half onward.