e-Seikatsu Co.,Ltd. Q4 FY2025 earnings call

• Business Model and Strategic Positioning

• Ii Life is a vertical SaaS provider focused on supporting digital transformation (DX) for the real estate industry, with a multi-product strategy covering rental brokerage, rental management, sales brokerage, and consumer-facing platforms.
• The combined vertical SaaS + BPaaS (Business Process as a Service) model creates synergies: BPaaS lowers the barrier to SaaS adoption by providing implementation and data migration support, while SaaS adoption drives demand for BPaaS services.
• The multi-product strategy drives ARPU growth through a natural customer journey: customers start with one core product, then expand to additional products over time, increasing per-customer revenue. This is a core pillar of the firm's long-term growth strategy.
• Competitive advantages include pure-play SaaS delivery, deep real estate industry expertise across all customer-facing teams (engineering, sales, consulting, customer success), and accumulated know-how in large-scale data modernization projects.

• Recent Operational Highlights

• Full FY2025 saw successful SaaS adoption by large enterprise real estate customers, including Village House Management, Keio Real Estate, and Anabuki Kosan.
• Q4 FY2025 added multiple regional core real estate customers across Japan, including Nishida Corporation (Kanagawa) and Panahome Shizuoka.
• New product updates launched in Q4: Ii Life Square now enables automatic creation of lease contract data directly from tenant application submissions, and bulk listing service for Ii Life Sales Cloud has been updated.
• The firm has maintained a stable, healthy balance sheet, while continuing proactive growth investment, and holds multiple international information security certifications (ISO27001, ISO27017, ISO20000), having been named a Certified Excellent Health Management Corporation for 6 consecutive years.
• The firm has established a formal basic policy for human capital expansion, and has successfully secured required talent even amid a challenging hiring environment.

Ii Life divides its revenue into two core segments: 1. Subscription: Revenue grew 4.6% year-over-year, accounting for 84.4% of total revenue, the core recurring revenue base of the firm. Annual Recurring Revenue (ARR) grew 9.4% YoY to 2.78 billion yen, with average revenue per user (ARPU) reaching 153 thousand yen, continuing a steady upward trend. Net negative churn of -0.44% means expansion revenue from existing customers outweighs total churn, a healthy dynamic. Paid corporate customers increased by 44 to 1,549, with service-enabled store locations reaching 4,762. 2. Solution (BPaaS): Revenue grew 29.3% year-over-year, driven by strong underlying demand for data modernization and implementation support tied to new SaaS customer onboarding. Total company revenue for the full year was 3.028 billion yen, up 7.8% YoY. EBITDA was 500 million yen, down 24% YoY due to upfront investment, with Q4 EBITDA of 157 million yen (down YoY). Gross profit was 1.597 billion yen (slight decline YoY), with operating loss of 37 million yen, net loss of 39 million yen for the full year. Q4 turned positive on operating profit, following the firm's typical seasonal trend of rising profits through the fiscal year.

• For FY2026 March term, management expects total revenue to grow 5.5% YoY to 3.196 billion yen, with operating profit returning to positive 107 million yen. EBITDA is forecast to grow 36% YoY to 681 million yen, and net profit is forecast at 72 million yen.
• The core strategic direction has no major changes from prior periods: management will continue to focus on winning enterprise and regional core real estate customers, support full onboarding for new customers, and leverage growing demand for more secure SaaS-based data management among mid-sized customers amid rising cyberattack risks.
• Management will maintain the planned 5 yen per share dividend, unchanged from prior expectations.
• Key growth priorities for FY2026 include: launching a major version update for sales brokerage SaaS, releasing new property management functionality for rental management customers, growing transaction volume and usage-based revenue for Ii Life Square, and strengthening data modernization service offerings as a key differentiation factor.

• Upfront investment in human capital (accelerated engineer hiring and workforce expansion) has pushed up cost of goods sold and SG&A, leading to higher cost ratios YoY and a full-year operating loss in FY2025, with continued pressure on costs expected in the near term.
• Yen depreciation has increased AWS IaaS costs, adding further pressure to COGS.
• Free cash flow was negative for full FY2025 due to elevated investment spending, though management expects to rebalance cash flow in FY2026 while continuing required product investment.
• Solution (BPaaS) revenue is recognized on a delivery basis, leading to natural quarterly revenue volatility.

No substantive question-and-answer content is included in the provided transcript.