| Period | Type | Revenue | Profit* | Margin |
|---|---|---|---|---|
| 2005/3 | Revenue / Net Income | ¥1B | ¥0B | 19.8% |
| 2006/3 | Revenue / Net Income | ¥2B | ¥0B | 18.6% |
| 2007/3 | Revenue / Net Income | ¥3B | ¥1B | 21.2% |
| 2008/3 | Revenue / Net Income | ¥3B | ¥1B | 26.3% |
| 2009/3 | Revenue / Net Income | ¥4B | ¥1B | 21.7% |
| 2010/3 | Revenue / Net Income | ¥4B | ¥1B | 21.3% |
| 2011/3 | Revenue / Net Income | ¥5B | ¥1B | 24.0% |
| 2012/3 | Revenue / Net Income | ¥6B | ¥2B | 26.6% |
| 2013/3 | Revenue / Net Income | ¥7B | ¥2B | 28.7% |
| 2014/3 | Revenue / Net Income | ¥11B | ¥3B | 31.8% |
| 2015/3 | Revenue / Net Income | ¥12B | ¥4B | 32.3% |
| 2016/3 | Revenue / Net Income | ¥15B | ¥5B | 32.9% |
| 2017/3 | Revenue / Net Income | ¥19B | ¥6B | 32.4% |
| 2018/3 | Revenue / Net Income | ¥25B | ¥8B | 33.0% |
| 2019/3 | Revenue / Net Income | ¥28B | ¥9B | 31.1% |
| 2020/3 | Revenue / Net Income | ¥32B | ¥10B | 31.8% |
| 2021/3 | Revenue / Net Income | ¥35B | ¥11B | 30.5% |
| 2022/3 | Revenue / Net Income | ¥40B | ¥11B | 28.2% |
| 2023/3 | Revenue / Net Income | ¥41B | ¥10B | 23.7% |
| 2024/3 | Revenue / Net Income | ¥44B | ¥11B | 24.2% |
| 2025/3 | Revenue / Net Income | ¥44B | ¥11B | 24.7% |
After strengthening the review framework following accounting fraud, deal quality improved, but the time to completion lengthened and revenue declined. In the advisory business, the period from mandate to deal completion determines the timing of revenue recognition, so stricter reviews directly translate into short-term performance deterioration. The structure where revenue declines even as the leading indicator of mandate volume grows reveals a characteristic specific to the advisory model where the trade-off between quality and speed is made visible in revenue. The paradox that correct operational practices depress financial performance complicates management's accountability.
Since the disclosure of accounting fraud, the company had strengthened deal quality management and review processes, and also revised operational practices at the sales front. However, client psychology and decision-making processes had changed, and the increased burden of explanation and heightened caution were extending the time required for deals to reach completion.
In the external environment, industry rule development, media coverage, and stricter buyer-side screening due to rising interest rates converged, creating conditions that slowed deal progression. Even when leading indicators maintained certain levels, the decline in deal completions directly impacted revenue, and explanation of the background behind the revenue decline was demanded.
Nihon M&A Center disclosed financial results (and business outlook) including a revenue decline for the fiscal year ending March 2025, positioning the decrease in completed deals and the lengthening of deal origination periods as primary factors. As countermeasures, the company highlighted policies to improve the quality of sales activities, including creating more time to engage closely with clients, standardizing deal analysis, and strengthening training.
However, measures to boost revenue in the short term were difficult to present, and the path to recovery was positioned as 'restoring a normal achievement cycle.' The challenge was designing a framework to convert improvements in leading indicators into completed deals, and while continuing to transform organizational operations, the consistency of communication to investors was simultaneously tested.
The revenue decline made the gap between growth in leading indicators and actual revenue clearly visible. Even as mandates accumulate, if the time to reach deal completion extends, revenue recognition is pushed back, making in-period shortfalls more likely. The financial results indicated that the company was in a phase where balancing deal quality and speed was difficult.
This phase was also a turning point where trust recovery after accounting fraud and changes in the market environment progressed simultaneously. The more stringent rules and reviews become, the more friction increases before deal completion. As the advisory model shifts from 'volume' to 'operational design,' which metrics to manage as leading indicators and at what timing to monetize became an ongoing issue.
After strengthening the review framework following accounting fraud, deal quality improved, but the time to completion lengthened and revenue declined. In the advisory business, the period from mandate to deal completion determines the timing of revenue recognition, so stricter reviews directly translate into short-term performance deterioration. The structure where revenue declines even as the leading indicator of mandate volume grows reveals a characteristic specific to the advisory model where the trade-off between quality and speed is made visible in revenue. The paradox that correct operational practices depress financial performance complicates management's accountability.
The competitive environment is also changing. The number of M&A support organizations is on the rise, and start-ups in this space have surged particularly in recent years. Currently, approximately 3,000 M&A support organizations exist, of which about 700 M&A advisory firms are registered with the Small and Medium Enterprise Agency (as of September 22, 2025). Many of these 700 firms are small boutique M&A advisory companies that lack networks for receiving deal referrals, and they are striving to acquire new mandates through direct mail (DM), cold calling, and advertising.
However, companies without sound governance structures have increasingly been observed employing misleading sales practices, which has resulted in the overall quality and ethics of the industry being called into question. Additionally, while extensive direct marketing from numerous advisory firms has promoted awareness of M&A among SME owners, these owners have become fatigued by the daily barrage of direct mail, and response rates have declined. At the same time, media reports about inappropriate acquirers have made business owners more cautious. Advisory firms that rely solely on direct marketing for deal sourcing are expected to face an extremely challenging environment going forward.