User Local, Inc.

User Local is a single-segment SaaS provider of website and social media analytics and internal AI chat. Low churn in its established analytics services supports stable monthly subscription income. New AI-DX demand adds to this base, while high margins and strict cost control support earnings.

Company

User Local, Inc.

株式会社ユーザーローカル

A SaaS provider of website analytics, social media analytics and generative AI tools for businesses.

Last Close: ¥1,791; May 22, 2026 · −24% from May-24 peak · +36% off Apr-25 trough
Market Cap / enterprise value (EV): ¥28bn / ¥19bn EV; net cash ¥9.4bn (33% of cap) · zero interest-bearing debt
EV / OP · forward: 8.6x; vs JP SaaS-microcap median ~12–14x est. · the gap is the cash and the opacity, not the operating quality
ROCE · trailing: 24%; FY06/23–FY06/25 trend: 23% · 25% · 24% — steady low-to-mid 20s ; dragged by half the balance sheet sitting in cash
OP margin · group: 43% · FY06/25; 9M FY06/26 actual 48.0% (+280bps YoY) · FY06/26 guide implies 41.8% — conservative on the print so far
Shares & Float: 15.9M sh · ~32% float; founder-CEO Masao Ito holds 38% direct · top-10 holders 67% · treasury 351,839 sh (2.2%)

01 · Rising phase

What moved the share price over the past two years?

User Local is a SaaS company that analyzes behavior on corporate websites and comments on SNS, and also provides generated AI for corporations on a monthly basis. At the high price in May 2024, even before ChatAI's track record had been sufficiently built up, a high valuation that anticipated future growth as a generative AI company was factored into the stock price.

3984 and TOPIX · Past 24 months · Daily candle + volume

high price¥2,347 · 2024-05-14 low price¥1,313 · 2025-04-07 Currently¥1,791

User local daily 60 day moving average TOPIX rebase (1308.T) Volume

01 · The rally Listed in 2017, User Local has a simple structure: standalone accounts, one segment, and no subsidiaries, equity-method affiliates or goodwill. Its revenue comes from one SaaS platform with three layers: established digital marketing analytics (User Insight, Social Insight and Media Insight), AI DX SaaS (Support Chatbot and ChatAI), and free tools that lead users to paid services. More than 34 billion accumulated data records underpin model accuracy and commercial proposals. With 112 employees and one office, it generated FY25 sales of ¥4,582M and OP of ¥1,971M, a 43% margin. Strong interest in generative AI during spring and summer 2024 took the shares to ¥2,347 on May 14, 2024.

02 · The reversal The subsequent decline largely reflected multiple compression across small AI-related stocks rather than company-specific bad news. The price reached ¥1,313 on April 7, 2025, 44% below the high. FY25 earnings nevertheless grew: sales were ¥4,582M (+17.3%), OP ¥1,971M (+14.1%) and net profit ¥1,429M (+20.6%). March 2025 headquarters relocation costs slowed OP growth. FY26 guidance of ¥5,284M sales, ¥2,207M OP and ¥1,523M net profit looked modest as those costs fell away; the dividend also rose from ¥8 to ¥14. The remaining question was whether accumulating cash would fund growth, remain permanently invested conservatively, or be returned.

03 · Current position Disclosures from February to May 2026 began to answer the capital allocation question. The February 12 Q2 release showed H1 OP of ¥1,217M (+21.6%) and a first interim dividend of ¥10. On February 13, management authorized a buyback of up to 500,000 shares, or 3.12% excluding treasury shares, for up to ¥1,000M. The May 7 Q3 release showed nine-month OP of ¥1,889M (+24.4%), net profit of ¥1,384M (+31.9%) and 85.6% progress against full-year OP guidance. The final dividend increased from ¥10 to ¥14, giving ¥24 annually and a 25% payout; shareholder benefits were introduced and 100,000 treasury shares, or 0.61%, were canceled. The shares closed at ¥1,791 on May 22, 2026. Watch whether FY26 guidance is conservative or reflects timing, whether disclosure clarifies AI-DX’s contribution, and whether capital returns become an established policy.

02 · Issue

Three questions dividing investor views

Based on

's quarterly financial results and briefing materials, the points at issue can be narrowed down to three points. The question is whether profits will continue to exceed company expectations, whether ChatAI has grown to a scale commensurate with its high reputation, and whether it will continue to provide shareholder returns.

Issue 01 · Is the company planning cautious?

Are the company's FY26 forecasts conservative, or will there be a reactionary decline in profits in Q4?

Bullish For bulls, as of 9M FY26Operating income was 85.6% of the company's full-year forecast, and net income was 90.9%Point out the points that have been achieved. The head office relocation costs recorded in FY25 have been eliminated, making it easier to compare with the previous year. 9M operating profit margin is48.0%This was 280 bps higher than the same period last year. In order to meet the company's full-year profit expectations, the Q4 operating profit margin will need to fall to around 24%, but the company has not indicated that it will increase expenses by that much.This view will hold true if full-year operating income exceeds ¥2,300M.

Bearish Bearish groups will focus on the fact that approximately ¥180M's head office relocation costs were recorded at the end of FY25. Since there were no such expenses in FY26, profitability did not improve permanently as much as the 9M profit increase indicates. AI-DX sales tend to be biased in Q2 and Q3 due to the public sector's budget allocation at the beginning of the fiscal year. The reason why the company did not upwardly revise its forecasts on May 7th may be because it recognizes that its current progress is ahead of its actual ability throughout the year.This view will hold true if Q4 FY26 operating profit is less than +15% year-on-year and full-year results are within ±2% of the company's forecast ¥2,207M.

Issue 02 · AI-DX sales composition

Has ChatAI grown to a scale commensurate with its high reputation, or are most of its sales coming from conventional products?

Bullish Bulls will note that ChatAI has acquired two large customers and continues to use them.Kyoto prefecturehas been introduced to approximately 8,000 government employees,AEON grouphas expanded to more than 15 group companies. The Q2 briefing materials clearly identify both parties as current customers, and large public institutions and corporate groups tend to lead to multi-year contracts. 1H is sales+17.7%, operating profit+21.6%The profit margin for increased sales is nearly 50%. This is consistent with the view that the addition of AI-DX sales without significantly increasing existing fixed costs is pushing up company-wide profits.This view will hold true if the company discloses its recurring revenue ratio or ChatAI ARR for the first time at the FY26 financial results briefing, and if it exceeds 25% of total sales and its growth from the previous year exceeds company-wide sales.

Bearish Bears point out that the company has disclosed its results in a single segment ever since going public. One sales figure includes analysis products that have been cultivated for 15 years and generation AI products that have been available for a year, so it is difficult to say which is responsible for 9M's strong performance. It is difficult for a generative AI company to apply a high multiple without knowing the breakdown of sales. The reason why AI-DX is not disclosed separately may be because it has not yet reached a scale that would warrant independent disclosure.This view will hold true if single segment disclosure continues after FY27 and neither the recurring revenue ratio nor the number of ChatAI contracts are shown.

Issue 03 · Continuity of refund policy

Are stock buybacks in February and dividend increases in May the beginning of continued shareholder returns?

Bullish Bulls on one disclosure on May 7th3 ways to give backEmphasize the points that summarize the following. In addition to increasing the year-end dividend from ¥10 to ¥14 and raising the full-year dividend payout ratio from 16% to 25%, the company also introduced a shareholder benefit system for the first time and decided to cancel 100,000 treasury shares. These were resolved on February 13th.¥1,000M・500,000 shares repurchase limitjoin. Looking at the four movements together, it is possible that the company's shareholder return policy itself has changed, rather than being a temporary response to a decline in stock prices.This view will hold true if the FY26 financial results announcement (August 2026) clarifies the share buyback limit or the minimum dividend payout ratio of 30% or more that will continue in FY27.

Bearish Bearish groups believe that ¥1,000M's share buyback limit isApproximately 11% of ¥9.4bn of cash balanceHowever, even if the amount is fully executed, retained earnings will exceed the sum of dividends and share buybacks, so the cash level at the end of FY26 is expected to remain almost unchanged compared to the previous year. With 37.9% directly owned by the founder-CEO, this concentration of Japanese founder-led small-cap stocks has historically left them with options for acquisition opportunities that may not come.This view will hold if the FY27 capital allocation slide re-states the dividend payout ratio of ~25% without specifying the cash limit, and the FY26 share buyback ends at less than 70% of the ¥1,000M limit.

03 · Highlights

What you can do to increase capital efficiency

Based on the latest disclosure of

, I will list three factors that will affect the evaluation. In either case, the evaluation can be changed by clarifying 's disclosure and capital policy without waiting for profits to increase.

Highlight 01 · Disclosure

Breakdown of recurring revenue ratio and ChatAI ARR

Items that may be disclosed in FY26 financial results materials but are currently undisclosed

FY25 sales (disclosed)

¥4,582M

Digital marketing SaaS sales

Not disclosed

AI DX SaaS sales (ChatAI, etc.)

Not disclosed

Continuing sales ratio

Not disclosed

ChatAI ARR / number of contracts

Not disclosed

Single segment Sales composition by product and recurring revenue ratio not disclosed

The entire company operates on a single sales line, and external investors have no choice but to evaluate the AI-DX growth portion using a blended multiple of Japanese SaaS small-cap stocks. This is because there is no information for independent evaluation. One supplementary slide for each quarter(i) Recurring sales ratio, (ii) Number of ChatAI contracts/ARR/customer group retention rate, (iii) Gross profit by product familyIf this is added, the discussion on AI-DX Premium can be shifted from "speculation" to "observation". Three items of additional information are required: The multiple effect affects the discount that the market currently prices for uncertainty.

execution burden
3 additional items for IR materials

Earliest confirmation time
FY26 financial results briefing · August 2026

Highlight 02 · Capital policy

Upper limit on cash held and continuous total return policy

Cash balance trends over 5 years · ¥M (end balance)

FY21 (June 2021)

¥4,696

FY22 (June 2022)

¥5,320

FY23 (June 2023)

¥6,367

FY24 (June 2024)

¥7,677

FY25 (June 2025)

¥8,546

Q3 FY26 (March 2026)

¥9,394

Cash balance increased for 5th consecutive period · FY26 ¥1,000M share buyback allowance is only 11% of current balance

The numbers on the back of the chart are simple. FY25 net profit¥1,429M, dividend ¥225M (dividend payout ratio 16%), capex ¥260M (of which ¥182M is the temporary cost of relocating the head office), but still net cash is¥869M increaseI did. The company has not made a single acquisition in its 20-year history. The trailing ROCE is 24%, but the retained yen only works at a bank deposit interest rate of about 0.4% per year. Specifying a specific upper limit —Dividend payout ratio 30% lower limit、Continuous share repurchase limit of 3% of issued shares, orWorking cash limit for working capital demand ¥0.12bn/total debt ¥1.2bn~¥3bn— If any one of these is made public, it will be easier to evaluate four years' worth of mechanical cash accumulation as a multi-year return policy. If the current disclosure and dividend policy continues, cash will automatically accumulate each year.

execution burden
1 board resolution

Earliest confirmation time
FY26 financial results · August 2026

Highlight 03 · Disclosure

When will the management succession policy from the founder be revealed?

Holdings/decision-making concentration · Top 10 (FY25 Securities Report)

Masao Ito (Founder and CEO)

37.9%

master trust trust bank

11.4%

Japan Custody Bank (Trust)

5.8%

Top 10 total

67.1%

Other tradable stocks

~32%

No announced succession structure · No appointment of vice president/No. 2 · 37.9% directly owned by founder CEO

Founder and CEO Masao ItoDirectly owns 37.9% of issued sharesand leads all major capital allocation decisions. CFO Daisuke Iwamoto will be in charge of operations and IR. The current securities report does not include a succession system paragraph, does not appoint a vice president-level position, and does not describe a system for continuing operations in the absence of the founder. Institutional investors will pay a higher cost of equity for this type of investment.100〜200bpApply a key person risk discount of 5% to 10% on an intrinsic value basis, although it won't show up on the income statement.The history of No. 2 and No. 3 products/technologies, procedures for elevating important matters to the board of directors for decision-making, and the founder's retention period policyThe discount can be compressed by writing it in a short section of the securities report.

execution burden
Added 1 paragraph to securities report and 1 page to explanatory materials

Earliest confirmation time
FY26 securities report submission · September 2026

04 · Scenario

Scenarios for the next four quarters

was divided into three categories: bearish, basic, and bullish, and the evaluation range was calculated for each combination of performance and disclosure. does not predict future stock prices.

bearish scenario

¥1,400 〜 ¥1,700

−22% 〜 −5%

Estimated multiple · ~6~8x EV/Operating profit (forecast)

Operating profit growth slowed in Q4, and FY26 ended within the guidance ¥2,207M range.None of the 3 points of interest land.。

Prerequisites

FY26 full-year operating profit came in at ±2% of company plan ¥2,207M.

FY26 1H/Full-year results do not disclose continuous sales ratio, ChatAI ARR, or profit margin by product.

Share buyback in February 2026 will be completed by August 5, 2026 with less than 70% of ¥1,000M quota.

No announcement of additional share buyback facility, no clear cash limit, no framework for FY27 dividend policy.

No successor structure paragraph was added to the FY26 securities report.

¥1,400~¥1,700 is approximately 6-8 times FY26 expected EV/operating profit, which is close to the 7-10 times that is seen when acquiring private Japanese companies. The assumption is that the valuation multiple will decline more than the decline in profits, and that the large amount of cash and lack of disclosure will continue to be discounted.

neutral scenario

¥1,950 〜 ¥2,300

+9% 〜 +28%

Expected multiple ~9~11x EV/Operating profit (forecast)

Operating leverage continued until Q4, with FY26 exceeding guidance by a few percentage points,1 out of 3 points of interest will land。

Prerequisites

FY26 full-year operating profit¥2.3〜¥0.24bn(+4-9% compared to company plan), and the improvement in profit margin seen in 9M will continue until the end of the period.

One of the three points of interest has arrived - The most likely one is disclosure of recurring sales ratio in FY26 financial results.

Share buybacks in February will be fully executed by August 5, 2026, and dividend payout ratio for FY27 will be maintained at ~25%.

There is no additional return policy other than what has already been stated.Cash balance is almost flat YoY.

bullish scenario

¥2,600 〜 ¥3,000

+45% 〜 +68%

Estimated multiple · ~13~16x EV/Operating income (forecast)

2 points of interest out of 3 landed. The AI-DX sales line will be given a name and the rebate policy will move from a temporary to a formal framework.

Prerequisites

FY26 full year operating profit¥0.24bn or more・Achieve sales of ¥5,500M or more.

FY26 financial results disclose recurring sales ratio and ChatAI ARR for the first time — Landing on point 01.

FY27 capital allocation slide clearly indicates minimum dividend payout ratio of 30% or higher or continuous share buyback limit — Landing on point 02.

There will be an upward revision to the company's plans in Q2 or Q3 of FY27, breaking the long-standing pattern of "unchanged forecasts during the period."

¥2,600~¥3,000 is based on the assumption that the valuation multiple, which is currently 8.6x, will increase rather than raising the earnings forecast. In order to return to the high price of ¥2,347 in May 2024, it will be necessary to disclose the management succession policy mentioned above. However, this is the most time-consuming of the three measures and is a challenge beyond the next four quarters.

SOTP · SaaS main business

Digital Marketing SaaS + AI DX SaaS Total (single segment)

FY25 sales (total)¥4,582M

FY26 company plan sales¥5,284M

FY26 Company plan operating profit¥2,207M

Operating profit margin (consolidated forecast)~41.8%

Evaluation level of other companies in the same industry (listed in Japan/single segment SaaS)~12-14 times estimated

Medium expected EV:~¥260~31 billion(FY26 expected operating profit x 12-14 times)

SOTP · Netcache

Cash and deposits on balance sheet (33% of market capitalization)

Q3 Net cash at end of FY26¥9,394M

Working capital demand (estimated)~¥1,300M

Surplus compared to explicit policy~¥8,100M

FY26 share buyback quota (announced)¥1,000M

Amount added to EV (face value)Add ¥9,394M in full amount

The company's performance-based ROCE is 24%, while cash is invested at a bank deposit interest rate of ~0.4%. The weight of market evaluation lies in the fact that cash utilization policy is not indicated.

Comparison of multiples with other companies in the same industry · As of July 10, 2026

Listed domestic single-segment B2B SaaS companies - Recalculate EV using the stock price at the base date - Use the past 12 months' EBITDA based on each company's latest financial results

3984 User local (this report)Expected 8.6x Actual 7.7x ROCE 24%

3922 PR TIMESActual 6.5x · Net cash market capitalization ratio ~25%

4165 PlaidActual 14.8x · CX platform

4382 HEROZActual ~10x (FY4/26 disclosed EBITDA ¥1.03bn) High project ratio

5574 ABEJAActual 34.5 times · Early stage

Comparing the performance over the past 12 months, User Local has a low valuation level on par with PR TIMES among single segment SaaS listed in Japan, and is significantly lower than its peers with strong AI-DX characteristics (Plaid, ABEJA). The denominator of the actual multiple used here is EBITDA, not operating profit. FY26 company planned operating profit ¥2,207M is used for the user local forecast multiple. Expected multiples are not calculated for other companies in the same industry, as it is necessary to obtain each company's company plans separately and manage the base date. All EVs were recalculated using the closing price of July 10, 2026.

SOTP · Check total value

SaaS main business + net cash Estimated range per share

Main business EV (median value)~¥28bn

Net cash (face value)¥9.4bn

Estimated shareholder value (face value)~¥37bn

Per share (15.9 million shares)~¥2,330

Comparison with current stock price ¥1,791Current stock price ratio ~30%

The market is the main business~9xA discount is applied to cash as well — a level that supports a neutral scenario with only the operating multiple before the point of focus on return arrives.

share Send this report.

X email

Permanent link ·

Important notice · Important Disclaimer
This material is not investment advice.

Japan Investor Interface Co., Ltd. (“JII”) is an investor-relations (IR) consultancy. JII is not a registered investment advisor, financial advisor, broker-dealer or securities firm in any jurisdiction. JII is not registered as a Financial Instruments Business Operator under Japan’s Financial Instruments and Exchange Act and does not hold an Investment Advisory and Agency Business registration. JII does not provide investment advice or solicit the purchase, sale or holding of any security.

JII Compounders is an editorial publication for educational and research purposes. Each company profile analyzes how the market has received public disclosures by Japanese listed companies. The intended readers are IR practitioners, finance students, journalists and people interested in corporate disclosure. The content does not constitute a recommendation, opinion, proposal or solicitation to buy, sell or hold any security, derivative or other financial instrument. Target prices, scenarios, valuation multiples and peer comparisons illustrate analytical methods and must not be interpreted as JII’s investment opinion.

Using this information. The information may be incomplete, out of date or incorrect. Forward-looking statements are uncertain. Past share-price performance does not indicate future results. Estimates and scenario values are not forecasts and may not materialize. JII does not warrant the accuracy, completeness, timeliness or reliability of the information, expressly or implicitly.

Use of this site. Reading this publication does not create an advisory, fiduciary or other professional relationship between the reader and JII. Before making investment, tax, accounting, legal or other decisions, consult appropriately qualified and registered professionals in your jurisdiction. Check the company’s primary disclosures and conduct your own independent research.

Trademarks and data. Company names, logos, ticker symbols and product names belong to their respective owners. Share-price data is licensed from third-party providers. TradingView is a trademark of TradingView, Inc. All rights reserved.

This material is not an investment advisory or agency business under Japan's Financial Instruments and Exchange Act, and is not intended to solicit or recommend the purchase, sale, or other transaction of any specific securities. This material is an analytical study published for educational and research purposes. JII (Japan Investor Interface Co., Ltd.) bears no responsibility for any investment decisions made based on the contents of this material. All investment decisions should be made based on your own responsibility and independent research.

Conflicts of interest. JII, its officers and related parties do not hold or trade securities of companies covered in JII research reports. If JII has a paid engagement with a company it covers, that relationship is disclosed in the relevant report. JII’s publications provide information and do not constitute investment advice or a recommendation to buy or sell any security.

Company research · MethodologyLanguage: EN · JPJapan Investor Interface Co., Ltd.