e-Seikatsu Co.,Ltd. Q3 FY2025 earnings call

• Company positioning and competitive advantage

  • It is a vertical SaaS company focused exclusively on the real estate industry, offering a multi-product portfolio covering all core real estate business workflows with seamless cross-product integration.
  • Key competitive advantages include specialization in real estate, high LTV customer base centered on property management companies, and in-house expertise across sales to product development.
  • The company targets primarily enterprise customers with over 1,000 managed units, a segment it considers a core strength where it is the only provider of enterprise-scale SaaS-based property management systems.

• Business model synergy

  • The combined vertical SaaS + BPaaS model creates strong synergy: BPaaS (SaaS implementation and onboarding support) lowers the barrier to SaaS adoption for understaffed small-to-mid real estate companies, while growing SaaS usage drives incremental BPaaS demand.
  • Multi-product cross-selling creates natural ARPU growth: customers typically start with a single core product and add complementary products (e.g. owner/tenant apps after core management system adoption), increasing average revenue per customer over time.

• Operational and product updates

  • Paid customer count grew to 1,563 corporations (+56 YoY), with 4,754 service locations (+231 YoY). ARPU reached 137 thousand yen, up ~1 thousand yen YoY. Revenue-based churn was 0.48%, well controlled at a low level.
  • Combined installation for いい生活 Home and いい生活 Owner apps surpassed 300,000 units, with significant remaining penetration room.
  • A new sub-lease deposit transfer function was released for いい生活賃貸管理クラウド to meet new regulatory requirements.
  • The いい生活 Square inter-broker platform currently has 22,000 free client companies; the company has not yet started full monetization, but views it as a long-term high-growth opportunity.
  • The company established a formal Basic Policy for Human Capital Expansion, and added new hires to sales and implementation teams, who have completed training and joined field operations.
  • Two large enterprise customer projects initiated in the prior year are now largely completed.

The company reports two main revenue segments: 1. Subscription: 4.4% YoY growth, contributing 85.2% of total 3rd quarter revenue. Annual Recurring Revenue (ARR) reached 2.57 billion yen, up 4.2% YoY. 2. Solution (BPaaS): 38.9% YoY growth, contributing 14.8% of total 3rd quarter revenue. Total 3rd quarter revenue was 2.223 billion yen, up 8.4% YoY.

• The company downward revised full-year 2025 March fiscal year guidance: full-year revenue was revised from 3.119 billion yen to 3.011 billion yen, representing 7.2% YoY growth maintained. Operating profit was revised from 100 million yen to -36 million yen, ordinary profit from 99 million yen to -42 million yen, and net profit from 67 million yen to -28 million yen.
  • EBITDA is expected to decline year-over-year, but the company aims to maintain EBITDA in the 500 million yen range.
  • The core growth strategy remains unchanged: the company will continue to prioritize order acquisition centered on enterprise projects, and maintains confidence in sustained long-term revenue growth driven by ongoing industry SaaS shift.
  • Going forward, the company will focus on upskilling the newly added workforce rather than continuing rapid hiring expansion, and will control cost growth for the next fiscal year.

• Large enterprise projects took longer and required more man-hours than initially projected, leading to delayed revenue recognition and higher-than-planned cost recognition in the current fiscal year.
  • Reallocating sales and consulting resources to support large enterprise project implementation reduced capacity for new business development, leading to slower-than-expected top-line growth in the current period.
  • Upfront investment in human capital and product development led to higher operating costs that could not be fully offset by current revenue, resulting in an operating loss for the 3rd quarter and full-year expected loss.
  • The real estate industry is facing ongoing regulatory changes (including the new lease accounting standard coming in 2027) that require continuous product updates and investment.

Q: How does your customer base differ from competitors? / A: Most competing property management systems are primarily on-premise solutions, and competitors tend to focus on smaller-scale management companies. Ii Seikatsu specializes in customers with over 1,000 managed units, and has a higher concentration of customers in major metropolitan and urban regional areas across Japan.

Q: Why is your top-line growth slower than peers, and can growth accelerate? / A: The company focuses on larger enterprise-class customers, which requires months of data migration and onboarding work before revenue is recognized. While this longer sales cycle slows near-term growth, these customers have extremely high LTV and very low churn rates, leading to higher quality revenue. The company acknowledges growth needs to accelerate and is working to shorten the onboarding timeline, and notes its vertical, multi-product focused strategy differs from horizontal SaaS that grow via high-volume small customer acquisition.

Q: What is the size of the remaining untapped market of property management companies that haven't adopted SaaS, and why haven't they adopted yet? / A: Exact numbers are not available, but many smaller firms in regional areas still manage properties via Excel, even for ~1,000 unit portfolios. Common barriers are lack of in-house IT staff and familiarity with legacy manual processes. Some firms still use customized on-premise systems, but ongoing regulatory requirements force continuous costly updates that make custom on-premise less attractive, creating growing demand for SaaS solutions that the company is targeting.

Q: What is the switching cost for customers, and will intensified competition increase churn? / A: Switching costs are very high for enterprise customers, as moving to Ii Seikatsu requires months of work to clean and migrate tens of thousands of data entries, resulting in a fully cleaned, organized dataset that is costly to re-migrate to a new provider. Customers also face high psychological barriers to moving again after completing a full migration. Currently, there is market segmentation between SaaS and on-premise preferences, and demand for standardized SaaS is growing faster than demand for custom on-premise, so churn is expected to remain low.