LANDNET Inc. Q1 FY2026 earnings call

• Mission, Philosophy and Corporate Purpose

  • Guided by a mission to pursue both spiritual and material happiness for all employees while contributing to social progress, and a corporate goal of being a Private Realtor that helps clients realize their life plans by addressing latent needs, treating real estate as an income-generating asset, and maintaining and growing asset value through inheritance planning.
  • Aims to become the No.1 player in Japan's growing pre-owned real estate market, which has significant room to expand to the 70-80% pre-owned transaction share seen in Western markets.

• Core Competitive Advantages

  • 70% of all property acquisitions are direct purchases from owners, enabled by an in-house developed national real estate database covering all condominiums across Japan and expanding data for single-family homes and apartment buildings, allowing the firm to avoid bidding wars and acquire properties at reasonable prices, including in untapped regional markets.
  • In-house system development: ~100 in-house engineers build the core RCP (Real Estate Cloud Platform) system, with faster development speed, more flexible iteration, and better ability to roll out new features like crowdfunding platforms compared to outsourced development. Core business systems are developed in-house, while generic administrative systems use external vendors.
  • Fast inventory turnover of 98.29 days, far better than industry peers, alongside steadily growing inventory (23.55 billion yen as of Q1 FY2026, up from 19.676 billion yen in the prior year quarter).
  • Data-driven onboarding: All historical transaction, negotiation, success and failure data is stored centrally, allowing new graduates to reach the break-even point in an average of six months; current Q1 annualized sales per sales employee exceeds 228 million yen.

• Product and Geographic Expansion

  • Shifting the portfolio toward lower-priced (<200 million yen) properties and family-type condominiums, single-family homes, and apartments, which the firm views as a largely untapped blue ocean market, while avoiding high-price (>200 million yen) properties that carry excessive bubble-like price risk.
  • 57.9% of transactions are still in the Tokyo metropolitan area, with the firm growing transaction volume in both metro and regional markets. New regional branches like Fukuoka are pre-launched and tested in Tokyo before full relocation, resulting in early profitability.

1. Real Estate Sales Business: Total revenue contribution is 98.7%. Within the core condominium segment: Family-type condominions account for 55% of total transaction volume by number of units and 73.9% of total gross profit; 1R/Studio-type condominions account for 45% of total transaction volume by number of units and 26.1% of total gross profit. 2. Real Estate Rental Management Business: Revenue contribution is 1.3%, with 9,654 managed units and a 98.51% occupancy rate, on track to exceed 10,000 managed units by the end of the current fiscal year.

• Full-year FY2026 guidance is maintained, with no changes from prior guidance, as Q1 results are not considered weak despite slower profit growth than revenue growth (consistent with the firm's typical seasonal pattern of stronger second-half performance).
  • The firm plans to hit its full-year target of 568 total employees, up from the current 447, to support sales growth.
  • LSEED crowdfunding is targeting annual fundraising of 1.2 billion yen, with a medium-term target of 2.4 billion yen per year, to use as an additional source of funding alongside bank borrowing, with equity financing planned once the firm reaches a larger scale.
  • Rental management system development is ongoing, with the second phase of development underway to add digital features including e-contracts and customer self-service portals.

• Excessive price appreciation in the Tokyo metropolitan area pre-owned condominium market is a concern, so the firm has intentionally limited exposure to high-priced (>200 million yen) properties, and any acquisition of properties over 200 million yen requires board approval to manage risk.
  • Interest rate hikes from the Bank of Japan could potentially lead to buyer pullback, though management currently expects limited impact and views overall macroeconomic conditions as supportive for the sector.
  • Rapid portfolio expansion carries inventory risk, but this is mitigated by the firm's industry-leading fast inventory turnover.

Q: What is Landnet's core competitive advantage over other industry peers? / A: Management states that the firm's biggest advantage is its proprietary national real estate database, which creates extremely favorable conditions for property acquisitions. Management notes that the firm has almost never lost out on acquisitions to competitors due to this advantage.

Q: Is Landnet considering M&A activity in the near term? / A: Management says that for the next 2-3 years, the firm will focus all efforts on growing its internal team and completing development of its core digital systems. After this period, M&A may be considered once the firm grows its equity base, but there are no specific M&A plans at present.

Q: What is the current progress of the LSEED crowdfunding business? / A: The firm has already hit cumulative fundraising of 1 billion yen, and is increasing activity from one to two campaigns per month. Current runs are already hitting ~100 million yen per month, with targets of 1.2 billion yen annual fundraising in the near term and 2.4 billion yen long-term. The firm is actively refining the platform based on user feedback.

Q: What is Landnet's strategy for growing its single-family home business? / A: Management sees strong untapped demand for well-located 10-15 year old single-family homes in Tokyo suburbs, which are often more attractive than high-priced pre-owned condominiums. The firm aims to increase流通 of existing single-family homes by focusing on renovation and reuse rather than bulldozing for new development, matching current market demand.

Q: How does the recent Bank of Japan interest rate hike impact Landnet's business? / A: Management notes that the prior 0.5% rate increase caused some temporary slowing in Tokyo suburban markets, but the latest hike to 2% has not had a large visible impact to date. Overall, macroeconomic conditions of improving corporate profits and mild inflation are seen as a tailwind for Landnet's business, and the firm will continue to monitor market conditions closely.