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• Company Overview and Core Strengths

  • Founded in 1995 with the mission of eliminating information asymmetry in the Japanese real estate market, LIFULL currently has 1,000 consolidated employees and operates the largest domestic database of housing-related information, accumulated over 30 years of operation.
  • Core competitive advantages include in-house end-to-end product development capacity, industry-leading property information freshness (ranked No.1 for two consecutive years), and a massive accumulated proprietary database covering over 6 million residential properties, 80,000+ investment properties, and 57,000+ nursing care facilities.
  • The company follows a "public-interest-oriented capitalism" management philosophy, committed to balanced returns for all stakeholders including consumers, clients, employees, partners, shareholders, society, and the environment.

• AI Transformation Progress

  • Launched the LIFULL AI platform in December 2025, with the first consumer-facing service being AI HOMES-kun, a conversational AI agent that allows users to search for properties via natural language dialogue instead of traditional filtered search. The service learns individual user preferences and supports 24/7 inquiry, enabling step-by-step narrowing of preferences to find optimal properties.
  • For real estate agency clients, LIFULL has launched DX support services powered by generative AI to reduce time-consuming manual work and address labor shortage in the industry.
  • Internal company-wide AI adoption has reached nearly 100% of employees, cutting 50,000 hours of internal work over six months, building a leaner operational structure that can support revenue and profit growth with fewer employees.
  • As of February 2026, LIFULL has released 21 AI-related press releases, leading peer companies in AI-enabled service development.

• Operational Progress

  • LIFULL HOME'S has achieved 9 consecutive quarters of revenue growth, driven by a virtuous cycle: in-house development improves site and service quality, which increases visitor traffic, which increases client inquiry volume, which improves revenue and profitability, which allows further investment in site improvement.
  • Post-M&A integration of Kenbiya has been completed, and cross-selling to existing LIFULL HOME'S 33,000 clients has driven rapid growth in listed property volume, realizing expected group synergies.
  • The first quarter of the 2026 September fiscal year delivered strong year-over-year growth: consolidated revenue grew 8.3% to 6.99 billion yen, and operating profit grew 42.1% year-over-year to 1.17 billion yen, outpacing revenue growth due to cost control and productivity gains. This represents a strong start to the full fiscal year, with 23.5% revenue progress and 39% operating profit progress against full-year guidance.

• Full Fiscal Year 2026 (ending September 2026) Guidance maintained: Consolidated revenue guidance is 29.7 billion yen, and operating profit guidance is 3.0 billion yen. A 5.21 yen per share dividend is forecast based on a 30% dividend payout ratio target, with a new 30,000 yen per year electronic money shareholder benefit for shareholders holding 4000+ shares for over 1 year, bringing the total shareholder return yield to 5.9%.
• Mid-Term Management Plan (2026 September Fiscal Year to 2028 September Fiscal Year) targets: 35 billion yen to 40 billion yen in consolidated revenue, and 5.5 billion yen to 6.0 billion yen in operating profit by the final year of the plan. These targets do not assume successful AI business upside, providing downside buffer to guidance.
  • Management expects that as early as the 2028 September fiscal year, generative AI-powered home search will see meaningful adoption growth, especially among younger users and rental search users, though meaningful direct revenue and profit contribution may come after the end of the current mid-term plan period.
• The mid-term plan focuses exclusively on domestic housing-related businesses, with no plan for renewed global expansion in this planning period.

1. HOME'S Related Business: In the prior full fiscal year, revenue was 25.571 billion yen, accounting for 91% of total company revenue. For the first quarter of the 2026 September fiscal year, the segment led overall consolidated revenue growth, with total consolidated revenue reaching 6.99 billion yen, an 8.3% increase year-over-year. This segment includes the core platform LIFULL HOME'S (Japan's largest real estate information database with over 6 million listed properties) and Kenbiya (Japan's largest real estate investment property listing site, which now has over 80,000 listed properties after post-M&A system integration and group synergy realization). 2. Other Business: In the prior full fiscal year, revenue was approximately 2.529 billion yen, accounting for 9% of total company revenue. This segment includes LIFULL Kaigo (Japan's largest nursing care facility search site with over 57,000 listed facilities) and the vacant property reuse business for regional revitalization. LIFULL completed a restructuring in the prior fiscal year and fully withdrew from the former overseas business segment, now focusing exclusively on domestic real estate information services.

• The adoption speed and market trajectory of generative AI in real estate search remains uncertain, and new competitors could enter the conversational AI-powered home search market, creating competitive threat to existing players.
  • AI investment creates short-term pressure on profitability, and there is risk that AI initiatives may not deliver expected revenue or efficiency returns within the planned timeline.
  • The Japanese real estate market faces macro headwinds including population decline, growing vacant stock, and high new construction prices that have slowed new housing supply growth.
• LIFULL has established a structured risk management process for AI investment: it conducts regular granular monitoring and quantitative evaluation of AI initiatives, will accelerate projects that perform well, and rapidly adjust, pause, or discontinue projects that do not meet expectations. The company uses the 3.0 billion yen full-year operating profit guidance as a control threshold to balance AI investment and short-term profit delivery.

Q: What factors are driving customer growth for LIFULL?

A: Growth comes from the proven referral effect of LIFULL HOME'S for real estate agency clients. As clients see solid business results from listing on the platform, churn is low, and more agencies facing customer acquisition challenges choose to start listing on LIFULL HOME'S, driving steady customer count growth.

Q: What is driving ARPA (average revenue per account) growth, and what is the current market trend in the sales segment of the real estate market?

A: ARPA growth comes from two main factors: first, transaction volume for existing (pre-owned) properties is growing steadily as demand shifts from new construction to existing properties; second, existing property prices have risen due to inflation, and LIFULL's revenue model for sales properties charges a 0.05% fee based on transaction price, so higher prices directly increase revenue per inquiry. By segment share, rental is still the largest segment, followed by existing property sales, which contributes the most to ARPA growth. New construction (both detached and condominium) has seen a relative decline in share after COVID-19 due to slowing new supply, and rental, existing sales, and sale appraisal now make up the majority of revenue.

Q: What impact does rising rent in central Tokyo have on LIFULL's business?

A: It has a positive impact: LIFULL charges up to 9.5% of monthly rent per rental inquiry, so rising rents directly increase revenue per inquiry, similar to the dynamic in the sales property segment.

Q: Why has the number of listed properties on Kenbiya grown so rapidly after the M&A?

A: Kenbiya was already the second-largest real estate investment platform when it joined the LIFULL group in 2020, while LIFULL's own investment platform was third. System integration took two years to complete, and after that LIFULL cross-sold Kenbiya to its existing base of 33,000 LIFULL HOME'S clients, encouraging any client with investment properties to list them on Kenbiya. This group synergy is the main driver of the rapid increase in listed properties.

Q: Can AI adoption drive higher referral volume for clients?

A: There is very large upside potential: previously, many users gave up searching because they could not find what they wanted with filtered search, or faced psychological friction from visiting an agency before clarifying their needs. Conversational AI lowers this friction, allows users to refine their search gradually, and many users now prefer to ask an AI agent before contacting an agency directly. This is expected to increase overall qualified referral volume over time.

Q: What opportunities and threats does generative AI create for LIFULL?

A: There are both opportunities and threats. The main threat is that the market trajectory is still uncertain, and new entrants could emerge to compete in the AI-powered home search space. The main opportunity is that LIFULL's 30-year accumulated proprietary real estate database is a critical moat that new entrants cannot easily replicate, and this database allows LIFULL to build a market-leading conversational AI search service, creating an opportunity to become the market leader in the new AI-powered home search market.

Q: What is the most important differentiator for LIFULL in AI-powered home search: data, user base, or operational know-how?

A: All three are important, but the massive proprietary database is the most critical. Generative AI needs large volumes of accurate, up-to-date information to deliver high-quality responses. LIFULL's database includes not just current vacancy and pricing data, but 30 years of archived historical data on pricing trends and neighborhood information, which allows the AI to answer nuanced user needs like identifying areas with good resale value and finding appropriately priced properties matching user requirements. This depth of data is the key differentiator that cannot be easily replicated.

Q: What is LIFULL's risk management for AI investment, and what level of investment spending is acceptable?

A: AI investment is the top strategic priority for LIFULL, and the full-year 3.0 billion yen operating profit guidance already accounts for planned AI investment, which is why the full-year guidance is lower than the prior year's 3.8 billion yen actual operating profit. LIFULL conducts regular granular monitoring of all AI projects, with quantitative evaluation at dedicated review meetings: projects that perform well will continue to get investment, while projects that do not meet expectations will be rapidly adjusted, scaled back, or discontinued. This agile decision-making process has worked well for past initiatives, and the 3.0 billion yen full-year profit target is maintained as the control line for investment.

Q: When do you expect AI initiatives to start meaningfully contributing to revenue and profit within the mid-term plan period?

A: The mid-term plan's revenue and profit targets do not assume upside from AI, so the base guidance is conservative. LIFULL is currently developing both consumer-facing conversational search and client-facing DX services, which are still in the early stage. As early as 2028, AI-powered home search is expected to see meaningful adoption growth, especially among younger users and renters, but direct, material revenue and profit contribution will likely come after the end of the current mid-term plan. Management is actively investing to capture this long-term upside.

Q: Is the recent margin improvement from one-time factors, or is it structural improvement to the profit structure?

A: It is mostly structural: internal productivity improvement (driven in part by early AI adoption) has created a leaner operational structure, so revenue can grow without proportional increase in costs, meaning the profit structure has improved structurally. While 1Q operating profit was 1.17 billion yen, which would annualize to 4.68 billion yen, the full-year guidance remains 3.0 billion yen because LIFULL plans to invest heavily in promotion ahead of the January-March moving season and continue investing in AI development, so these planned investments are already accounted for in the full-year guidance. The underlying structural profit improvement has been achieved.

Q: Is the new shareholder benefit program sustainable, and what is LIFULL's shareholder return philosophy?

A: The size of the new benefit program was set after careful deliberation to ensure long-term sustainability, and it is well within the affordable range based on LIFULL's shareholder return policy. LIFULL's policy is to distribute annual profit across four uses: taxes, employee bonuses, shareholder returns, and retained earnings for future investment, aligned with its public-interest capitalism philosophy. While the target payout ratio for dividends is 30% of net income, the appropriate overall shareholder return level based on LIFULL's distribution framework would be 50% payout, and currently LIFULL retains 20% more than that as additional retained earnings. The new shareholder benefit is funded from this excess retained earnings, so the total size of the benefit is smaller than increasing the payout ratio to 50%, making it fully sustainable long-term.

Q: What is your outlook for the Japanese real estate market given population decline and growing vacant stock?

A: While population decline and vacant stock are real challenges, the market is shifting: the old model of "scrap and build" new construction is no longer as viable due to rising material costs, so the market is shifting from new construction to existing properties, and from ownership to rental. This shift benefits LIFULL's core rental and existing property segments, which are already growing. As the second/third largest player in the market, LIFULL still has plenty of room to gain market share by offering higher quality services. Additionally, government initiatives to promote two-base living and compact cities in regional areas will increase the number of properties owned per capita, which will increase demand for property search services and create new growth opportunities for LIFULL. Overall, there is still meaningful growth room for the business over the next several years.

Q: What are LIFULL's ethics rules and information security measures for AI use?

A: As an information service provider, LIFULL has always prioritized information security and proper data handling, and is recognized as a leader in this area among Japanese industry peers. LIFULL has already developed internal AI ethics guidelines (not yet publicly disclosed) that govern all AI development and service provision, and follows strict data protection protocols. The company is committed to meeting its responsibility as Japan's largest housing information provider, balancing data protection and responsible AI innovation.

Q: What is your reaction to the recent stock price surge (stop-high), and is the new shareholder benefit only for meeting Prime Market listing maintenance requirements? Are you planning any specific stock price improvement measures?

A: The recent positive stock price movement reflects market positive evaluation of the strong 1Q results, disclosed dividend forecast, and new shareholder benefit. LIFULL already meets all Tokyo Stock Exchange Prime Market listing maintenance requirements, and expanding shareholder return is a core strategic priority in the mid-term plan regardless of listing requirements. The company will continue to focus on growing the business and expanding shareholder return to build long-term investor support.

Q: Do you plan to overtake the industry leader to become No.1 in the industry, and what will you change to achieve that?

A: LIFULL's core goal is to help every user find their ideal property, and after removing duplicate listings, LIFULL already has the largest number of unique listed properties in Japan. Going forward, LIFULL will continue growing its client base, expand available property information, and leverage AI to make searching easier and more convenient for users, with the goal of building a service that users trust as the most reliable option for home search, which will drive sustainable business growth.

Q: Is there any opportunity to launch an international version of HOME'S, can housing ×AI be a source of global competitive advantage?

A: The current mid-term plan focuses exclusively on domestic housing-related businesses, so there are no plans for global expansion in this period. LIFULL does recognize that its 30 years of domestic data and AI expertise can build competitive advantage, and will focus on maximizing that advantage in the domestic market for the foreseeable future.