COMPANY RESEARCH AND ANALYSIS REPORTRareJob, Inc.
6096
Tokyo Stock Exchange Prime Market

29-Aug.-2023
FISCO Ltd. Analyst

Hiroki Nagaoka

FISCO Ltd.
https://www.fisco.co.jp

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Overview of FY3/23 results.................... ......................................................................................................

01

2. Outlook for FY3/24.. .....................................................................................................................................

01

3. Mid-term business plan......................... ......................................................................................................

02■Company profile---------------------------------------------------------------------------------------------------------------------------------------------------------- 03
1. Company profile.. ................................... ......................................................................................................

03

2. Business description. . ..................................................................................................................................

07

3. The Company’s strengths and its competitors. ............................................................................................

10■Market environment------------------------------------------------------------------------------------------------------------------------------------------------ 12■Results trends--------------------------------------------------------------------------------------------------------------------------------------------------------------- 13
1. Overview of FY3/23 results..........................................................................................................................

13

2. Financial situation.................................. ......................................................................................................

14■Future outlook--------------------------------------------------------------------------------------------------------------------------------------------------------------- 16
1. Outlook for FY3/24 . . .............................. ......................................................................................................

16

2. Mid-term business plan......................... ......................................................................................................

17■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 19■Initiatives for ESG/SDGs------------------------------------------------------------------------------------------------------------------------------------- 20

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir■ Summary
Changing fee plans for B2C and B2B services, aiming to greatly
increase profits
RareJob, Inc. <6096> is one of the largest online English tutoring service providers. The Company’s main service isthe online English tutorial service “RareJob Eikaiwa.” With more than 6,000 Filipino tutors, the Company continues togrow sales by providing high-quality services at low prices. The Company has recently been strengthening businesstargeting corporations and educational institutions and is expanding its business scope particularly to global leader
development, which is highly synergistic with English tutorial services. It aims to become a platform company fordeveloping people who can succeed globally from an online English tutoring provider. The Company advocates“Chances for everyone, everywhere.” as the Group vision, and is promoting efforts to expand business with the aimof realizing a world where everyone can unlock their potential to be valued. To build the assessment data platform,
which will serve as the foundation for these efforts, in June 2020, the Company launched PROGOS, which is an
English speaking exam that utilizes AI technology, and the Company is working to expand introduction of PROGOS
to companies and universities. The Company is working to grow by collecting assessment data with the PROGOS
test and providing a variety of services created based on the platform.
1. Overview of FY3/23 results
In the FY3/23 consolidated results, the Company posted ¥5,787mn in net sales (up 3.4% YoY), EBITDA of ¥547mn(down 5.7%), operating profit of ¥228mn (down 21.7%), ordinary profit of ¥279mn (up 15.4%), and profit attributableto owners of parent of ¥194mn (up 4.9%). In its initial forecast announced in May 2022, the Company forecast thatnet sales would increase 7.2% to ¥6,000mn. Within this, it anticipated a 5.3% increase in sales in the B2C business,
which accounts for 70% of overall sales. The actual result was a 0.3% decrease, significantly falling short of thetarget. Even though the Company did not fulfill its initial forecast, it still achieved record high net sales. The main
reason for the Company not achieving its net sales target was that limitations on overseas travel caused by the
COVID-19 pandemic reduced the number of overseas business trips, overseas assignments, and foreign holidays,
slowing the growth of interest in learning foreign languages, particularly among people around the age of 30. On theother hand, EBITDA was ¥547mn and operating profit was ¥228mn, surpassing their respective targets of ¥386mn
and ¥50mn. This was due to efforts to make operations more efficient, including the streamlining of SG&A expenses.
2. Outlook for FY3/24
In the FY3/24 consolidated forecast, the Company projects net sales of ¥10,000mn (up 72.8% YoY), EBITDA of¥1,000mn (up 82.6%), operating profit of ¥600mn (up 162.8%), ordinary profit of ¥530mn (up 89.7%), and ¥400mn(up 106.1%) in profit attributable to owners of parent. Additionally, from FY3/24 the Company’s results will beclassified and reported under the two segments of Reskilling-related Business and Childcare Support Business.
In terms of the breakdown of net sales, the Company expects the Reskilling-related Business to increase 3.5% to¥5,500mn, and the Childcare Support Business to increase 855.4% to ¥4,500mn. The Reskilling-related Businesssegment includes the B2C and B2B businesses. Net sales are forecast to increase 2.4% to ¥3,600mn in the B2C
business, and 5.6% to ¥1,900mn in the B2B business. Previously, the Company’s segments covered a single
English language-related business, divided into B2C (individual customers) and B2B & B2School (corporations andeducational institutions), but from FY3/24 it is separating its businesses targeting children and schools, which will
be reported under the Childcare Support Business together with an ALT (Assistant Language Teacher) businessbeing managed by the newly consolidated BORDERLINK, INC.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Summary

Additionally, the anticipation of large increases in EBITDA and operating profit is due to fee revisions for theCompany’s RareJob Eikaiwa services and entry into the ALT business. Regarding fee revisions for the RareJob
Eikaiwa services, new B2B fee plans were introduced in April 2023. In the B2C business, a revised fee plan for new
members was introduced in October 2022 while existing members were switched to the new plan in May 2023.
These revisions are expected to contribute to business results. At present, these revisions appear to have had
virtually no negative effects, such as a drop in membership numbers, and the Company’s view is that concerns
regarding a greater-than-expected decrease in net sales are minimal.
3. Mid-term business plan
For a mid-term management target, the Company will aim for operating profit of ¥1.0bn in FY3/25. Inorganic growththrough fee revisions for existing services and entry into the ALT business will raise the probability of success.
The Company is also expected to carry out a variety of initiatives in order to achieve this target, including adding
corporate sales personnel and making investments in system development. In the ALT business, it has achieved
increasing earnings on a yearly basis while leveraging its strengths such as productive sales and high quality ofteachers and plans to expand the business by steadily increasing its number of dispatch ALTs.
PROGOS is the service at the heart of the Company’s growth strategy. The Company is positioning the assessment
data platform, which consolidates data collected by the PROGOS test in various businesses, as the source of its
competitive advantage. The Company will start with accumulating assessment data for English-speaking ability, andthen plans to expand the scope of assessments to cover English reading, listening, and writing ability, as well asother skills necessary in global business. In the future, the Company aims to become an AI assessment company
from an online English tutorial service company.
Key Points
In FY3/23, the downturn in interest in foreign language learning continued due to a lingered impact of thepandemic, and although net sales fell far short of the initial target, particularly in the B2C business, the Company
recorded record high net sales• From April 2024, the Company is fully entering the ALT business through the acquisition of a subsidiary. It is
expected to realize inorganic growth in net sales of more than ¥4.0bn• In FY3/24, fee price revisions are being implemented in the B2B business from April and for existing membersin the B2C business from May. The aim is to dramatically increase operating profit• Established a target of ¥1.0bn in operating profit in FY3/25, with PROGOS as the nucleus of the growth strategy•

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.

29-Aug.-2023

6096 Tokyo Stock Exchange Prime Market

https://www.rarejob.co.jp/en/ir

Summary

Results trend
Net sales (left)

Operating profit (right)(¥mn)
12,000

(¥mn)
800
669

9,000

600
600

446
6,000

400

291
228

3,000

5,331

5,598

5,787

FY3/21

FY3/22

FY3/234,512

10,000200

00FY3/20FY3/24 E

Source: Prepared by FISCO from the Company’s financial results■ Company profile
The one of the largest players in the online English tutorial service
industry in Japan, over 1,100,000 cumulative non-paying members
1. Company profile(1) Management vision and mission
The Company is the largest company that is mainly involved in online English tutorial services. It provides online
English tutorial learning services for individuals, corporations and educational institutions, centered on “RareJob
Eikaiwa.” The Company is growing out its business with the aim of realizing its Group Vision of “Chances foreveryone, everywhere.” “Chances for everyone, everywhere.” refers to “Building a platform for people to demonstrate their respective abilities and play active roles globally,” and this means that the Company will offer chances
to learn new things, chances to develop abilities, and chances to encounter something new, to all people in allplaces through the Internet, and build a society in which people all over the world can succeed beyond national
borders and languages.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Company profile

The Company mainly operates the online English tutorial service “RareJob Eikaiwa” with a service mission of“Encouraging 10 million Japanese to speak fluent English.” Demand is growing for English speaking skills asthese skills become even more important in individual careers. Also, with the globalization of business activities,
developing global talents has become an issue for companies, and companies are increasingly looking to add
English tutorial as a part of their training programs. In schools, English has become a compulsory part of curriculums at elementary schools as a part of curriculum revision carried out in 2020 with the “Guidelines for the Courseof Study” by the Ministry of Education, Culture, Sports, Science, and Technology. In addition, English speaking
skill has become more of a point of emphasis. Demand for English conversation learning services is expected to
grow even more going forward.
The Company acquired shikaku square, Inc., which provides online study courses to obtain difficult-to-passlegal-related qualifications as a subsidiary in December 2021, and is expanding its business into a wider rangeof learning.
(2) Corporate history
The Company was established in 2007, by current President and CEO Gaku Nakamura and the former CEO andChairman Tomohisa Kato. When the Company was founded, people generally learned English speaking skill bygoing to a brick-and-mortar English tutorial school or by studying abroad. However, both of these are expensive
options and there was no reasonable option to learn how to speak English. In this context, with inroads by the freecalling communication tool Skype aided by advances in Internet technology and faster communication networks,
the Company started business premised on provision of low-cost English speaking learning service using Skype.
The Company hired English tutors in the Philippines, where English is the official language. At that time, through an
acquaintance who was a Filipino college student, they started a pre-service after recruiting classmates who could
speak English. Because compensation and working conditions for tutors were competitive, the tutor network has
expanded through word-of-mouth, and the Company currently has a large network of more than 6,000 tutors.
RareJob Philippines, Inc. was established in 2008 as the subsidiary to recruit, train, and manage them.
RareJob (now, RareJob Eikaiwa) online English speaking learning service for individuals started in November 2007
and realized steady growth in the number of students thanks to provision of service at much cheaper rates thanin-person English language schools, a billing model of offering free lesson at first and then switching to monthly
contracts as a paid member if the person is satisfied with the service, and reduction of the cost hurdle for entry
by eliminating additional costs besides lesson fees, such as lesson materials and sign-up and cancellation fees.
In 2009, the Company began offering services to corporations, and in June 2014 the Company went public on
the Mothers Market of the Tokyo Stock Exchange.
From 2015 onwards, the Company improved the quality of its service, shifting from a matching service forJapanese learners and Filipino tutors that gave them an opportunity to speak English, to an English education
service that provides the outcome of being able to speak English. As an online English tutorial service, theCompany expanded its service menu, such as the “Business English Course” and the “Young Learner Course.”
The Company also improved the quality of its curriculum and learning materials, and worked to raise the standards
for hiring tutors as well as improve training for tutors. Also, the Company began Smart Method course, theintensive English conversation learning service that guarantees results, in October 2018.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Company profile

In July 2015, the Company concluded a capital and business alliance agreement with Mitsui & Co., Ltd. <8031>,
and leveraged Mitsui & Co.’s network to strengthen initiatives such as sales of corporate services and overseas
expansion. In February 2016, the Company concluded a capital and business alliance agreement with Zoshinkai
Publishers, Inc. (currently Zoshinkai Holdings Inc.), and is speeding up its business development by entering intobusiness alliances with large companies. Such moves include joint development of “Z-kai Asteria” and “NEW
TREASURE Online Speaking,” English tutorial programs for Z-KAI Group members, and starting a partnership in
B2School. In February 2019, through a company split, the Company established Envizion, Inc., the subsidiarythat operates the online English tutorial service for schools and the online English tutorial service for kids “Ripple
Kids Park.” In April 2019, Zoshinkai Holdings Inc. invested in Envizion, Inc. (33.41% stake), thereby strengthened
the collaborative framework in the B2School domain. In April 2023, Envision Inc. dissolved its merger agreementwith Zoshinkai Holdings and became a fully-owned subsidiary. Then, in June 2023, the Company purchased
and absorbed BORDERLINK, INC. Envision, Inc. was absorbed by BORDERLINK, INC, which the Company fullyacquired in April, 2023.
Furthermore, in 2019 the Company started the global leader development business in order to help people not
only learn English but also obtain the skills needed to play active roles globally. The Company announced abusiness alliance in November 2019 with Caplan Corporation, which handles in-person training business as partof Pasona Group Inc. <2168>, and is jointly developing a training program that assists global leader development.
Additionally, it spun off the B2B business and established PROGOS Inc. in March 2021. The PROGOS test, whichis the AI English speaking exam developed in June 2020, collects assessment data, and the Company intends
to develop multi-faceted assessment of skills needed by global leaders with the assessment data platform as
the starting point. Through the multi-faceted skill assessment, it hopes to expand scope to hiring, development,
assessment, and assignment areas and reinforce services that support corporate personnel functions. These
efforts seek to accelerate growth in B2B market.
In October 2021, the Company acquired a 49.000% stake of BORDERLINK, INC., which is engaged in thebusinesses of dispatching ALTs (Assistant Language Teachers) and operating English language schools and
BORDERLINK, INC. became our affiliated company accounted for by the equity-method. Then, in December
2021, the Company made shikaku square, Inc. a subsidiary (merged with RareJob Inc. in July 2023) by acquiring
its shares after Sight Visit Inc. created shikaku square and spun it off. The Company then took over the shikaku
square business which provides online learning programs for professional qualifications. Furthermore, in January2022, the Company spun off its Technology Department, creating the new company RareJob Technologies, Inc.,and this April the company began the AI-related R&D business. In April 2023, BORDERLINK, INC. was madeinto a fully-owned subsidiary.

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05 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Company profile

Corporate history
Date
October 2007
November 2007

Main events
RareJob, Inc. establishedLaunched online English tutorial service “RareJob” (currently “RareJob Eikaiwa”)

October 2008

Established RareJob Philippines, Inc. in Manila, the Philippines

August 2009

Started providing corporate services

June 2014

Listed on Mothers section of Tokyo Stock Exchange

April 2015

Started providing Business English Course
Started offering services for educational institutions

July 2015

Capital and business alliance with Mitsui & Co.

September 2015

Started providing Young Learner Course

October 2015

Started Brazil business (exited in November 2017)

January 2016

Started offering “RareJob Honkijuku”

February 2016

Capital and business alliance with Zoshinkai Publishers, Inc. (currently Zoshinkai Holdings Inc.)

April 2016

Established Kansai branch office

August 2016

Started offering the “RareJob Eikaiwa” iOS app

August 2016

Established ENVIZION PHILIPPINES, INC. in Cagayan de Oro, Philippines

January 2017

Brought Ripple Kidspark Co., Ltd., which operates kids online English Tutorial service Ripple Kids Park, into the group

April 2017
March 2018
April 2018

Established Chubu branch officeStarted providing the proprietary lesson-taking system “Lesson Room”
Established Kyushu branch office

October 2018

Started providing the performance-guaranteed English tutorial service “Smart Method course”

February 2019

Established Envizion, Inc. and concluded merger agreement with Zoshinkai Holdings Inc.

October 2019Concluded business alliance on global leader development business with CAPLAN Corporation

June 2020
November 2020
March 2021

Developed the PROGOS test: the AI English speaking exam
Changed the stock listing to the First Section of Tokyo Stock Exchange
Established PROGOS Inc. to conduct corporate business

April 2021

Launched recruitment business specializing in foreign nationals and Japanese tutoring business

June 2021

Established Babel Method, Inc. to develop a Japanese speaking learning program

September 2021

Formed capital and business alliance with BORDERLINK, INC.

December 2021

shikaku square, Inc., which engages in the business to help people attain professional qualifications, joined the Group

April 2022

RareJob Technologies, Inc. established by spinning off the Technology Division, launched the AI-related R&D business

April 2022

Changed stock market listing to the Prime Market of the Tokyo Stock Exchange

October 2022
December 2022
April 2023

Updated RareJob Eikaiwa functions and experiences
Established K12 Holdings, Inc.
Made BORDERLINK, INC. into a fully-owned subsidiary
Launched Global Skills Power Training, a B2B program for acquiring global business skills
Launched an English education service aimed at the K12 age range (kindergarten to final year of high school)

Source: Prepared by FISCO from the Company’s website(3) Status of group companies
At the end of May 2023, the Group comprised the Company and nine consolidated subsidiaries (six companies
in Japan and three companies in the Philippines), and two equity-method affiliates (one company in Japan and
one company in the Philippines).
Of these companies, RareJob Philippines, Inc., a subsidiary in the Philippines, recruits, trains, and manages
English tutors in the Philippines (there are currently more than 6,000 tutors on the roster in the Philippines). The
domestic subsidiary Envizion, Inc. provides an online English tutorial learning service for schools and Ripple Kids
Park, an online English tutorial learning service designed for children. Of the subsidiaries in the Philippines, RIPPLE
KIDS EDUCATIONAL SERVICES, INC. primarily provide lessons for Ripple Kids Park from the lesson supply center
it operates. RIPPLE KIDS EDUCATIONAL SERVICES, INC. is a subsidiary that is 99.995% owned by Envizion.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Company profile

In October 2021, the Company acquired 49.000% of the issued shares of BORDERLINK, INC., a consolidated
subsidiary of WILL GROUP, INC. which engages in the foreign language educational support business. In April
2023, it exercised call options on the remaining 51.000%, making the company into a fully-owned subsidiary.
Status of major group companies (As of the end of May 2023)
Classification

Company Name

Descriptions of the main businesses

RareJob Philippines,Inc.

Recruitment, training, and management of English tutors

99.997%

Envizion, Inc.

B2School business100.000%

RIPPLE KIDS EDUCATIONAL SERVICES, INC. Provision of online English tutoring lessons for kids

Consolidated
subsidiary

Equity-method
affiliate

Ownership
Ratio(99.995%)

RareJob English Assessment, Inc.

Assessment business(99.999%)

PROGOS, Inc.

B2B business100.000%

shikaku square, Inc.

Operation of an online learning service “shikaku square” forprofessional qualification exam preparation

70.000%RareJob Technologies, Inc.

AI (artificial intelligence) related R&D business, etc.

100.000%

K12 Holdings, Inc.

Provision of management administration and leadership for
subsidiaries

100.000%

BORDERLINK, INC.

Foreign language tutor dispatch business, operation of language
schools

100.000%

Grandline Philippines Corporation

Operation of language schools (Partner for English conversation
study abroad business for corporations)20.000%Babel Method, Inc.

Development of Japanese speaking learning programs(49.180%)

Note: Figures in parenthesis for ownership ratio indicate indirect ownership ratio included in the total
Source: Prepared by FISCO from the Company’s securities report and others

Filipino tutors living in the Philippines support the businessfoundation
2. Business description
The Company provides low-cost, high-quality online English tutorial services by connecting Filipino tutors withstrong English skills and users via the Internet. Currently, the main service is “RareJob Eikaiwa.” The Company has
a General English Course and a Business English Course and other courses. About 90% of individuals take theGeneral English Course, while many companies take the Business English Course. For the General English Course,
the most popular plan under the former fee plan was the ¥6,380 (including tax)-per-month/25 minutes-per-day plan
(however, in May this was revised upward to ¥7,980 per month under a new fee plan). Customers can take one
lesson per day, so if they take a lesson every day it ends up being a bargain at ¥206 (¥257 including tax following
fee revisions) per lesson. Most of the users are business people, with approximately 70% of users who are between
their 20s and 40s, but the service is used by people in a wide range of age groups ranging from 10s to 70s. The
ratio of male and female users is about 60:40.
As a profit structure, users pay a fixed monthly fee as discussed above, while tutors are mostly paid according
to the number of lessons they provide. Increase in the user lesson attendance rate hence lowers profit margin.
Nevertheless, the actual lesson attendance rate, despite exhibiting some seasonality, does not significantly change
year-on-year other than in a situation similar to FY3/21 with school closures and a guidance to stay home by agovernment in the COVID-19 pandemic.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Company profile

Main courses and new fee lists of “RareJob Eikaiwa”
General English Course¥21,480/month(Can take one 100-minute lesson each day, ¥173 per lesson if one lesson is taken every day)
¥12,980/month(Can take one 50-minute lesson each day, ¥209 per lesson if one lesson is taken every day)
¥7,980/month(Can take one 25-minute lesson each day, ¥257 per lesson if one lesson is taken every day)
¥4,980/month(Can take eight lessons each month, ¥623 per lesson if one lesson is taken every day)Business English Course(Business-focused course with certified tutors
who have received special training and use
exclusive teaching materials)¥12,980/month(Can take one 25-minute lesson each day, ¥419 per lesson if one lesson is taken every day)Young Learner Course(This course strengthens the four skills neededin high school and university entrance exams
with instruction by a certified teacher who hasreceived special training and global learningmaterials specifically for the course.)¥12,980/month(Can take one 25-minute lesson each day, ¥419 per lesson if one lesson is taken every day)

Source: Prepared by FISCO from the Company’s website(1) B2C Services
The Company’s services for B2C are RareJob Eikaiwa; Ripple Kids Park, the online English speaking and learning
service dedicated to children; Smart Method course, the intensive English speaking learning course that guarantees results; and shikaku square, an online leaning service to assist in acquiring difficult professional qualifications.
RareJob Eikaiwa generates the majority of sales.
Looking at the flow of business using “RareJob Eikaiwa” as an example, the Company acquires customers
through online marketing (listing advertisements, affiliate advertisements, social media, etc.) to attract customers
to the “RareJob Eikaiwa” site. First, a user who views the “RareJob Eikaiwa” site registers as a non-paying
member (this allows them to take two free lessons), then takes the lessons and decides whether to enroll in thepaid service. Therefore, the KPI for revenue growth include the initiatives to attract people to the website, thenumber of non-paying members, the rate at which non-paying members become paying members (conversionrate), and the paying member retention rate. Improving these KPI will lead to higher net sales. As of the end of
FY3/22, the number of cumulative non-paying members had exceeded 1,000,000, and roughly 90,000 people
are registering each year. The Company is taking steps to improve the paying member continuation rate throughsteadfast enhancement of lesson quality, updates of teaching materials.
The Company began to offer the Smart Method course as the B2B service. In October 2020, it started its service
for B2C as well and is increasing sales as a product that address demand for guaranteed enhancement of English
communication capability in a short period.
Furthermore, in addition to the aforementioned English language-related services, the Company provides “shikaku
square,” an online learning service that helps people prepare for difficult-to-pass qualification exams, including apreliminary examination for a Lawyer, patent attorney exam and so on.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Company profile(Thousandpeople)Cumulative number of non-paying members

1,200
1,022
944

1,000
844
738

800
645
557

600
459
342

400
232
163

200
0

FY3/13 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18 FY3/19 FY3/20 FY3/21 FY3/22
Source: Prepared by FISCO from the Company’s results briefing materials(2) B2B services
The Company is promoting B2B services at PROGOS Inc., which was established in March 2021. In this business,
it delivers various programs that meet customer needs, including the PROGOS test, the AI English speaking exam,
RareJob Eikaiwa (business English conversation) as a business English training program, Smart Method course,
an English conversation learning course that guarantees results, and global leader development training, and has
cumulative deployments at 4,000 companies.
The PROGOS test, a new service, gives questions related to business scene (meeting, interview, presentation,etc.) for about 20 minutes and uses AI technology to confirm results in as little as a few minutes and give feedback
on studying methods to improve skills along with the test score (there is manual scoring in some cases). The
indicator for the test complies with CEFR*1 international standard, and assesses skills by “what can be done” and“the extent to which it can be done” rather than the volume of words and grammar knowledge. The PROGOS test
received a silver award in the assessment category of the Reimagine Education Award 2020*2, one of the world’s
largest educational contests. The Company was the first Japanese entity to receive this award and indicates thatthe service is highly rated internationally as well. The Company hopes to roll out the PROGOS test as a way ofvisualizing the English language skills of an organization and aims to boost earnings through joint provision of alanguage training program and other services.
*1	Common European Framework of Reference for Languages (CEFR) is a common standard that indicates the extent oflanguage acquisition and linguistic performance of foreign language learners in Europe. It is widely used in academic
and business communities, including use by the Ministry of Education, Culture, Sports, Science, and Technology as an
English assessment indicator in new learning guidelines.
*2	The Reimagine Education Award is one of the world’s leading awards for initiatives in innovative education and is also
known as the “Oscars” of the educational industry. It had more than 1,400 applications from 72 countries worldwide in
FY2020 and selected recipient organizations following rigorous evaluation by 260 judges from around the world.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Company profile

The Smart Method course is the service that improves the level of English conversation skill in a short period oftime with certified tutors who have received training specifically for this course, special teaching materials, as wellas support by a dedicated Japanese consultant. The course lasts approximately 16 weeks (Mon-Fri: 50-minutelesson/day). It costs ¥495,000 (including tax), which is more expensive than the regular “RareJob Eikaiwa” service.
However, the Company guarantees that the student will improve by at least one level from the time they begin thecourse based on the Company’s criteria, which are equivalent to the 10 levels of English-speaking ability basedon CEFR-J* (in April, lesson times were shortened to 45 minutes and the price was revised upward to ¥594,000,
including tax, under a new fee plan). There has been a lot of positive responses from customers and healthy sales
growth since the service launch.
*	CEFR-J is an English language ability achievement index designed for use in English education in Japan based on CEFR,
an international standard that indicates level of language communication skill.

(3) B2School Services
The Company conducts sales activities targeting educational institutions through its subsidiary, Envizion andits partner Z-kai. Its main services are an ALT dispatch service and an online English tutorial service as an
extracurricular program. Due to movement to lower the age range of children receiving English education andstrengthen the four main English language skills (listening, speaking, reading, and writing), the ALT dispatch
business is continuing to grow rapidly, maintaining an annual growth rate of roughly 3% per year. Going forward,
the Company will explore launching specific services for the English education market, including kindergartens,
nursery schools, and after-school childcare facilities.
(4) Tutors
Looking at the situation of Filipino tutors, which are the foundation for the Company’s growth, the Company
initially hired mainly students and graduates of the University of the Philippines, but now the Company recruits
throughout the Philippines based on referrals by existing tutors and via Facebook advertisements. Tutors signs
contracts after their English proficiency and aptitude as a tutor are assessed. Tutors are given training and thenstart serving as tutors on their own after their lesson quality becomes good enough. Most of the Company’s morethan 6,000 Filipino tutors have independent contractor agreements, but some are full-time tutors and some aretutors from partner companies. Tutors hired as independent contractors are recruited from all over the Philippinesand offer lessons from home in principle. Compensation is paid in local currency (Philippine pesos) based on thenumber of lessons provided. Some tutors provide lessons from centers equipped with stable communicationequipment, including spare lines.

The Company holds a strong competitive advantage over its
competitors
3. The Company’s strengths and its competitors(1) Strong competitive advantage
The Company has four main strengths: being able to provide high-value-added English tutorial services withhigh-quality curriculum, teaching materials, and tutors, at a low price; operational capabilities that allow the
Company to maintain a stable and large number of high-quality tutors and lessons; strong sales capabilities anda robust customer base including collaborations with partners; and expansion into businesses that are highly
synergistic, such as the business leader development business and the career-related business.

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10 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Company profile(2) Competitors
The competitors in B2C online English speaking tutorial services are DMM Eikaiwa and Native Camp. The companies that operate these services are privately held, so their respective sizes are unknown. In the case of DMM,
the price is almost the same as RareJob, and it has more than 10,000 tutors located not only in the Philippines
but in 134 countries around the world and users can take lessons any time of the day.
Competitors in the field of learning services helping people prepare for difficult-to-pass legal-related qualification
exams such as the preliminary examination for a lawyer include Itojuku (Hogakukan Co. Ltd..) and AGAROOT
ACADEMY, Inc.
In B2B services, the main competitors are Berlitz (a subsidiary of Benesse Holdings, Inc.<9783>) and Gaba withlong-standing results in a business model that still primarily utilizes the in-person format. The market for online
services began from around 2015, and Bizmates is a competitor in this area.
Competitors in the ALT business include Link Interac Inc., a subsidiary of Link and Motivation Inc. <2170>.
(3) SWOT analysis
The Company’s internal environment (strengths, weaknesses) and external environment (opportunities, threats)
can be summarized as follows.
a) Internal environment (strengths)• High-quality curriculum, teaching materials, tutors• Operational capability to continually offer high-quality tutors and lessons• Strong sales capabilities and robust corporate client network including business partners• Business deployment capabilities based on the assessment data platformb) Internal environment (weaknesses)• Bringing in casual users• Dependent on Filipino tutors, so the Company is assuming a country risk (the Philippines)c) External environment (opportunities)• Growth of the online English tutorial market• Business growth by introducing services at companies and educational institutions• Growing needs for developing talents that can work globallyd) External environment (threats)• Invention of timeless and accurate simultaneous interpretation machines• Increasing competition due to an increase in companies entering the online English tutorial market• Exchange rate risk (costs will increase if the yen depreciates against the Philippine peso)

We encourage readers to review our complete legal statement on “Disclaimer” page.

11 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir■ Market environment
Markets for helping people play active roles globally will continue toexpandJapan’s population is on a declining trend, and in particular the working-age population is dramatically declining.
Specifically, according to “Population Projections for Japan (2023 revision)” published by the National Institute ofPopulation and Social Security Research, Japan’s working-age population in 2030 is expected to be approximately
7,000,000 people less than in 2020, falling to 68,750,000 people. In this situation, companies will need to increase
operational efficiency and promote automation, but they will also need to create environments such as those for
employing non-Japanese people. In addition, it is projected that people with the skills that allow them to work withforeign personnel, which means human resources that are capable of working and/or managing non-Japanesepeople, will become extremely valuable to society.
Demand for English speaking tutorial service has temporarily slowed due to decline in foreigners visiting Japan anda steep drop in opportunities for overseas travel amid the prolonged COVID-19 pandemic situation. Nevertheless,the B2C market is likely to continue an expansion trend over the longer term on further advances in globalization,
recovery in the number of foreigners visiting Japan, and the switch to English education as a requirement atelementary schools.
In the B2B market, despite continuation of a flat level in the past few years, the share of online training is growing.
Even though the pandemic has temporarily slowed business, English speaking learning demand should continue
to expand with increase in expatriates amid globalization, growing contacts with overseas companies in Japan,
and more foreign personnel.
In the B2School market, English classes became a requirement from the fifth year of elementary school in FY3/20
and enhancement of English-speaking ability received more emphasis in updated instruction guidelines, including
at junior high school and high school. The adoption of online English-speaking and learning services in the K12 age
range is forecast to accelerate.

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12 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.

29-Aug.-2023

6096 Tokyo Stock Exchange Prime Market

https://www.rarejob.co.jp/en/ir■ Results trends
Posted record high net sales in FY3/23 despite the decline in profit
due to upfront investments
1. Overview of FY3/23 results
In the FY3/23 consolidated results, the Company posted ¥5,787mn in net sales (up 3.4% YoY), EBITDA of ¥547mn(down 5.7%), operating profit of ¥228mn (down 21.7%), ordinary profit of ¥279mn (up 15.4%), and profit attributableto owners of parent of ¥194mn (up 4.9%). In its initial forecast announced in May 2022, the Company forecast thatnet sales would increase 7.2% to ¥6,000mn. Within this, it anticipated a 5.3% increase in sales in the B2C business,
which accounts for 70% of overall sales. The actual result was a 0.3% decrease, significantly falling short of thetarget. Even though the Company did not fulfill its initial forecast, it still achieved record high net sales. The main
reason for the Company not achieving its net sales target was that limitations on overseas travel caused by the
COVID-19 pandemic reduced the number of overseas business trips, overseas assignments, and foreign holidays,
slowing the growth of interest in learning foreign languages, particularly among people around the age of 30. On theother hand, EBITDA was ¥547mn and operating profit was ¥228mn, surpassing their respective targets of ¥386mn
and ¥50mn. This was due to efforts to make operations more efficient, including the streamlining of SG&A expenses.
FY3/23 results(¥mn)
FY3/22

FY3/23Results% of sales

Initial plan

Results% of sales

Net sales

5,598

-

6,000

Revised plan
6,800

5,787

-

YoY
3.4%

B2C

3,894

69.6%

4,100

3,810

3,881

67.1%

-0.3%

B2B & B2School

1,704

30.4%

1,900

2,990

1,905

32.9%

11.8%

Operating profit

291

5.2%

50

230

228

3.9%

-21.7%

Ordinary profit

242

4.3%

80

410

279

4.8%

15.4%

Profit attributable toowners of parent

184

3.3%

0

310

194

3.4%

4.9%

Source: Prepared by FISCO from the Company’s financial results and results briefing materials

Net sales of B2C services decreased 0.3% YoY to ¥3,881mn, falling short of the initial target of ¥4,100mn. Net
sales of B2B & B2School services increased 11.8% YoY to ¥1,905mn, about the same amount as the initial targetof ¥1,900mn. Although seasonal factors continue to influence quarterly results, this increase in B2B sales drove
overall results upward.

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13 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Results trends

Breakdown of Quarterly Net Sales
Individuals

(¥mn)
1,600
1,400
1,200

Corporations and educational entities
1,465

1,465

463

418

933

982

2Q

3Q

1,314

1,371

383

438

931

1Q

1,446

1,434

1,464

1,423

446

456

507

494

1,047

1,019

977

956

928

4Q

1Q

2Q

3Q

4Q

1,000
800
600
400
200
0
FY3/22

FY3/23

Source: Prepared by FISCO from the Company’s results briefing materials

In terms of cost of sales, despite higher costs due to the increase in the purchase of training services, the cost of
sales ratio declined from the previous fiscal year to 40.6%. In terms of SG&A expenses, there was an increase in
expenses such as personnel expenses accompanying the move to make shikaku square a subsidiary.
Cost structure(¥mn)
FY3/22

FY3/23Results% of sales

Results% of sales

Net sales

5,598

-

5,787

-

YoY

Cost of sales

2,307

41.2%

2,348

40.6%

1.8%

Tutor fees

1,711

30.6%

1,603

27.7%

-6.3%

3.4%

596

10.7%

744

12.9%

24.9%

SG&A expenses

2,999

53.6%

3,210

55.5%

7.0%

Labor cost

1,394

24.9%

1,513

26.2%

8.5%

Advertising

419

7.5%

406

7.0%

-3.2%

1,185

21.2%

1,290

22.3%

8.9%

291

5.2%

228

3.9%

-21.7%

Other

Other
Operating profit

Source: Prepared by FISCO from the Company’s financial results and results briefing materials

Increasing total assets through active investment
2. Financial situation(1) Consolidated balance sheets
At the end of FY3/23, total assets were ¥6,835mn, a YoY increase of ¥491mn. Current assets were ¥2,934mn, adecrease of ¥568mn from the end of the previous fiscal year. This was mainly due to a ¥873mn decrease in cash
and deposits, among other factors. Non-current assets were ¥3,900mn, an increase of ¥1,060mn from the endof the previous fiscal year. This was mainly the result of a ¥1,145mn increase in investments and other assets
primarily due to advance payments.

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14 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Results trends

Total liabilities increased ¥346mn from the end of the previous fiscal year to ¥4,210mn. Current liabilities decreased¥840mn to ¥1,688mn, mainly due to a ¥781mn decrease in the current portion of long-term borrowings, a ¥118mn
decrease in advances received, and other factors. Non-current liabilities increased ¥1,187mn YoY to ¥2,521mn.
Despite a ¥1,207mn increase in long-term borrowings, lease liabilities declined.
Total net assets were ¥2,624mn, an increase of ¥145mn compared to the end of previous fiscal year. This was
mainly due to an increase in capital surplus and retained earnings, among other factors.
Condensed consolidated balance sheets and key business indicators(¥mn)
FY3/20FY3/21

FY3/22

FY3/23

Change

2,698

3,214

3,503

2,934

-568

2,153

2,860

3,116

2,243

-873

456

225

121

93

-28

859

1,254

2,840

3,900

1,060

Property, plant and equipment

197

461

191

172

-19

Intangible assets

489

586

1,458

1,392

-66

Goodwill

83

70

846

752

-93

172

206

1,190

2,335

1,145

Total assets

3,557

4,468

6,343

6,835

491

Total current liabilities

1,174

1,037

2,529

1,688

-840
-781

Total current assets
Cash and deposits
Accounts receivable - trade
Total non-current assets

Investments and other assets

Current portion of long-term borrowings

280

30

1,142

361

Advances received

118

132

717

598

-118

Total non-current liabilities

781

1,314

1,334

2,521

1,187

690

960

1,212

2,419

1,207

1,955

2,351

3,864

4,210

346

970

990

2,355

2,781

426

1,602

2,116

2,479

2,624

145

1,363

1,826

2,182

2,388

205

1

12

37

38

1

Total liabilities and net assets

3,557

4,468

6,343

6,835

491

Capital ratio

38.4%

41.2%

35.0%

35.5%

-

Return on equity (ROE)

15.2%

24.4%

9.1%

8.4%

-

Net profit margin

4.5%

7.3%

3.3%

3.4%

-

Total asset turnover (times)

1.5

1.3

1.0

0.9

-

Financial leverage (times)

2.2

2.5

2.7

2.8

-

Long-term borrowings
Total liabilities
Interest-bearing debt
Total net assets
Shareholders’ equity
Accumulated other comprehensive income

Note: Capital ratio = Capital / Total assets
Total asset turnover = Net sales / Total assets
Financial leverage = Total assets / Capital
Source: Prepared by FISCO from the Company’s financial results(2) Consolidated statements of cash flows
In FY3/23, free cash flow temporarily became negative due to an increase in advance payments for the acquisitionof subsidiaries and associates. The following is an overview of cash flows.
a) Cash flows from operating activities
Operating activities provided net cash of ¥471mn (compared to ¥292mn of net cash provided in FY3/22). Thiswas mainly due to recording ¥225mn in depreciation and other factors, despite expenditure for income taxes paid.
b) Cash flows from investing activities
Net cash used in investing activities was ¥1,725mn (compared to ¥1,507mn of net cash used in FY3/22). This wasprimarily due to an expenditure of advance payment for the purchase of shares of subsidiaries and associates.

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15 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.

29-Aug.-2023

6096 Tokyo Stock Exchange Prime Market

https://www.rarejob.co.jp/en/ir

Results trendsc) Cash flows from financing activities
Net cash provided by financing activities was ¥371mn (compared to ¥1,464mn used in FY3/22). This was mainly
due to proceeds from long-term borrowings.
Condensed consolidated statements of cash flows(¥mn)
FY3/20FY3/21

FY3/22

FY3/23

577

1,089

292

471

Depreciation

227

238

250

225

Amortization of goodwill

12

12

39

93

Cash flows from investing activities (b)

-170

-335

-1,507-1,725

Free cash flow (a) + (b)

406

754

-1,214-1,254

Cash flows from financing activities

440

-54

1,464

371

Net increase in cash and cash equivalents

849

699

255

-878

Cash and cash equivalents at end of period

2,166

2,866

3,121

2,243

Cash flows from operating activities (a)Source: Prepared by FISCO from the Company’s financial results■ Future outlook
Company expects record-high net sales in FY3/24, but will continue
to invest in future growth
1. Outlook for FY3/24
In the FY3/24 consolidated forecast, the Company projects net sales of ¥10,000mn (up 72.8% YoY), EBITDA of¥1,000mn (up 82.6%), operating profit of ¥600mn (up 162.8%), ordinary profit of ¥530mn (up 89.7%), and ¥400mn(up 106.1%) in profit attributable to owners of parent. Additionally, from FY3/24 the Company is disclosing its results
under new segments. Results will be classified and reported under the two segments of Reskilling-related Business
and Childcare Support Business. In terms of the breakdown of net sales, the Company expects the Reskilling-related
Business to increase 3.5% to ¥5,500mn, and the Childcare Support Business to increase 855.4% to ¥4,500mn.
The Company’s previous segments were B2C (individual customers) and B2B & B2School (corporations andeducational institutions), and its businesses targeting children and schools were included within these segments.
However, the businesses for children and schools were separated from April 2023, and their sales will be reported
under the Childcare Support Business segment, together with sales from the ALT business managed by the newly
consolidated BORDERLINK, INC. The Reskilling-related Business segment includes the B2C and B2B businesses.
Net sales are forecast to increase 2.4% to ¥3,600mn in the B2C business, and 5.6% to ¥1,900mn in the B2B
business. Additionally, the anticipation of large increases in EBITDA and operating profit is due to fee revisions in
the Company’s RareJob Eikaiwa services and entry into the ALT business. In line with revisions to RareJob Eikaiwa
fees and services, new B2B fee plans were introduced in April 2023. In the B2C business, a revised fee plan for new
members was introduced in October 2022 while existing members were switched to the new plan in May 2023.
These revisions are expected to contribute to business results. At present, these revisions appear to have had
virtually no negative effects, such as an increase in churn rate, and the Company’s view is that concerns regarding
a greater-than-expected decrease in net sales are minimal.

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16 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.

29-Aug.-2023

6096 Tokyo Stock Exchange Prime Market

https://www.rarejob.co.jp/en/ir

Future outlook

Outlook for FY3/24(¥mn)
FY3/23

FY3/24

Results% of sales

5,787

-

10,000

-

72.8%

5,316

91.9%

5,500

55.0%

3.5%

Individuals

3,517

60.8%

3,600

36.0%

2.4%

Corporations and educational entities

1,799

31.1%

1,900

19.0%

5.6%

471

8.1%

4,500

45.0%

855.4%Net sales
Reskilling-related BusinessChildcare Support BusinessInitial forecast% of sales

YoY

-

-

4,000

40.0%

-

471

8.1%

500

5.0%

6.2%

Operating profit

228

3.9%

600

6.0%

162.8%

Ordinary profit

279

4.8%

530

5.3%

89.7%

Profit attributable to owners of parent

194

3.4%

400

4.0%

106.1%

ALT business
English tutoring business

Source: Prepared by FISCO from the Company’s financial results and results briefing materials

Established target of ¥1bn in operating profit in FY3/25, with the
PROGOS test as the nucleus of the growth strategy
2. Mid-term business plan
PROGOS is the service at the heart of the Company’s growth strategy. The Company is positioning the assessment
data platform, which consolidates data collected by the PROGOS test in various businesses, as the source of its
competitive advantage. The Company will start with assessments of English speaking ability, and then plans to
expand the scope of assessments to cover English reading, listening, and writing abilities, as well as other skills
necessary in global business. In the future, the Company will aim to become an AI assessment company from an
online English tutorial service provider.
Growth Strategy Summary

Source: The Company’s results briefing materials

We encourage readers to review our complete legal statement on “Disclaimer” page.

17 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Future outlook

The Company plans to create a PROGOS ecosystem. Currently, in the world of English language ability assessments,
TOEIC® has an extremely large market share for adults, while the EIKEN Test in Practical English Proficiency has avery large market share for children. For hiring, most companies use TOEIC® as a means to determine someone’s
English abilities. The Company estimates that the TOEIC® ecosystem is between ¥50.0bn and ¥100.0bn in size (thisincludes not only the market for people taking the TOEIC® exam, but also books to prepare for the TOEIC® exam
and other services). The Company is first aiming to make the PROGOS test the standard for assessment for English
conversational ability. Once it does that, the Company believes it will be able to create a PROGOS ecosystem thatis the same size as the TOEIC® ecosystem between ¥50.0bn and ¥100.0bn in scale. The Company then expects
to earn about ¥10.0bn to ¥20.0bn of the PROGOS ecosystem (about 10-20% of the ecosystem). In FY3/23, thenumber of PROGOS tests administered grew by 51.3% YoY to over 200,000.
The Company’s growth strategies in each business are discussed below.
(1) B2C services
With respect to B2C services, the Company’s strategy is to expand its services, centered on English online
tutorial lessons, helping people to learn the wide-ranging skills and gain the qualifications necessary for successin society. However, there are some areas of concern in the current online English tutorial market, including the
temporary decline in demand for English tutorial services due to the drop in international travel caused by the
COVID-19 pandemic, as well as an expected deterioration in profitability due to the increase in tutor fees causedby the dramatic weakening of the yen. Given the situation, the Company’s actions for growth includes revising
the prices of its services by roughly 20% on average and offering high-value-added services.
The Company has made improvements to its services for individuals, but it had not changed its prices in approximately eight years. However, it has worked on diversifying fee plans and in May 2023, it effectively raised fees forexisting members by around 20%. There are large price differences between the Company and in-person English
conversation schools, and the Company feels it still has room to increase its prices. To present, there has been
little evidence of negative effects due to raising prices, such as an upturn in the rate of members leaving, and theCompany plans to continue improving business results by both increasing member numbers and raising usage
rates under the new fee plans.
(2) B2B services
The Company aims to fill an advisory position in corporate training for companies. For starters, the Company will
work to make the global business skills of businesspeople visible. After that, the Company plans to expand its
assessment-based solutions service for HR divisions, aiming to develop global leaders. Currently, the Company
is aiming to introduce its services in companies, especially in large companies, in order to facilitate a dramaticincrease in the use of the PROGOS test.
(3) B2School services
The Company’s strategy is to expand the scope of its educational service combining online and in-person services
to the K12 (the period of education from preschool (kindergarten age) to high school graduation) age range.
The PROGOS test is currently just for assessing the English conversational abilities of business people, but theCompany is also considering including students from upper-grade elementary school students to high school
students. AI assessments are already being utilized to evaluate an English skill in the U.S. and China, and theCompany foresees the same type of expansion in Japan as well.

We encourage readers to review our complete legal statement on “Disclaimer” page.

18 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Future outlook

It also plans to expand its business by using BORDERLINK, INC., an ALT dispatch business that was made intoa fully-owned subsidiary in April 2023, as the starting point for English education services that cater for childrenof all ages from pre-school through to high school.
(4) B2Overseas
The Company’s strategy is to sell the Group’s services and develop services leveraging its business assets.
Specific efforts underway include introducing PROGOS to Filipino BPO providers, etc.
(5) Numerical goals
As a mid-term management target, the Company is aiming to achieve operating profit of ¥1.0bn in FY3/25. The
Company is expected to carry out a variety of initiatives in order to achieve this target, including expanding the
ALT business, adding corporate sales personnel, and making investments in system development.

■ Shareholder return policy
The Company will stably and continuously increase the dividend
The Company announced revisions to the dividend policy in May 2021. For the purpose of strengthening financial
structure to facilitate long-term stability in the management foundation and continuously expanding businesses, theCompany had previously put priority on bolstering retained earnings and comprehensively decided dividends in thecontext of earnings, finances, and future business investment plans. With its listing on the First Section of the Tokyo
Stock Exchange in 2020, it adopted a policy of paying dividends with stable and continuous hikes. Furthermore, it
intends to prioritize strategic investments that lift enterprise value in cases of investment opportunities with return
above capital cost. In share buybacks, it plans to dynamically review actions as part of earnings compensationfrom a comprehensive perspective that looks at business initiatives, investment plans, retained earnings level, andearnings trends.
The Company paid a dividend of ¥12 per share for FY3/23. It expects to pay a dividend of ¥13 per share for FY3/24.
Also, on June 9, 2023, it carried out a share buyback with an upper limit of 306,400 shares, equivalent to 3.23%of all issued shares.
The Company has introduced a shareholder gift. It provides a shareholder gift coupon for RareJob Eikaiwa valuedat ¥10,000* among other things to shareholders who own 100 shares or more at the end of March each year, andan additional shareholder benefit coupon for the Smart Method course valued at ¥100,000 to shareholders who
own 300 shares or more.
*	The maximum amount that the shareholder gift coupon can be used equates to one month of the RareJob Eikaiwa service
fee. There is no refund of the difference for a contract plan that costs less than ¥10,000.

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19 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Shareholder return policy

Dividends per share and payout ratio
Dividend per share (left)(¥)

Dividend payout ratio (right)

15.0

(%)
100.0

13.0
11.0

12.0

12.0
75.0

10.0
55.1

9.0

58.0
50.0

6.0

30.9
25.0

23.1

3.0
0.0 0

0.0

FY3/200.0
FY3/21

FY3/22

FY3/23

FY3/24 E

Source: Prepared by FISCO from the Company’s financial results■ Initiatives for ESG/SDGs
A sustainable society which is the aim of the vision of “Chances foreveryone, everywhere.”
RareJob works to achieve a sustainable society based on each goal of SDGs and the concerns of ESG throughbusiness activities to realize its Group Vision of “Chances for everyone, everywhere.”(1) The classification for ESG: Environmental
Reducing energy consumption by having less travel
In the Company’s services, all members and tutors at RareJob Eikaiwa are free from having to take transport
somewhere physically to take or conduct lessons as long as they have internet access. By reducing energy
consumption, the Company contributes to reducing environmental impacts.
Promoting paperless environment
In the Company’s services, RareJob Eikaiwa provides most of its teaching materials via online instead of paper.
It also makes efforts to reduce paper consumption in its offices by digitizing internal documents for meetings,
proposals and so on.
(2) The classification for ESG: Social
Providing reasonable and high-quality educations
Providing reasonable and high-quality educations to students everywhere is the Company’s top priority. It contributes to eliminating inequalities in English education opportunities caused by regional and economic disparities,
such as the concentration of brick-and-mortar English tutoring schools in urban areas and expensive costs ofstudying abroad.

We encourage readers to review our complete legal statement on “Disclaimer” page.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

RareJob, Inc.
6096 Tokyo Stock Exchange Prime Market

29-Aug.-2023
https://www.rarejob.co.jp/en/ir

Initiatives for ESG/SDGs

More jobs for women
Roughly 80% of the Company’s tutors are women. Due to flexible working hours and the benefits of working
from home at any time, women who do housework, raise children, or care for family members are able to work
easily with their capacities.
Creating jobs in the developing country
The Company creates a lot of jobs in the Philippines, which is one of the developing countries. As its platform
allows tutors to work anywhere and anytime, it helps to increase the number of job options, especially for people
living in the rural areas of the country, where stable jobs are hard to find.
Realization of the society where people can make full use of their abilities regardless of nationality.
The Company aims to help people play active roles globally and create venues where they can utilize their skills. It
will achieve this through online English tutorial service for students and tutors and through foreign human resources
services for foreigners seeking to build a career.
(3) The classification for ESG: GovernanceCorporate governance
The Company is aware of the importance of strengthening proper organizational structures and systems to ensurecompliance with such matters as laws and regulations, social norms and corporate ethics. To boost corporate
value in a sustainable way, it will strive to strengthen corporate governance while working on business expansion
simultaneously.

We encourage readers to review our complete legal statement on “Disclaimer” page.

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Disclaimer
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FISCO Ltd.
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Phone: 03-5774-2443 (IR Consulting Business Division)
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