e-Seikatsu Co.,Ltd. Q2 FY2026 earnings call

• Core Business & Competitive Positioning

  • いい生活 is a vertical SaaS company focused on real estate industry digital transformation (DX), with over 80% of revenue coming from recurring subscription services.
  • Operates a multi-product strategy, offering combined SaaS + BPaaS (Business Process as a Service) which generates strong synergies: BPaaS lowers SaaS adoption barriers for customers and creates natural incremental demand from existing SaaS users.
  • Key differentiated strength: Handles full end-to-end customer support, from initial sales consulting and data migration (data modernization) to post-launch customer success, addressing the real estate industry's severe labor shortage that slows IT adoption.
  • Currently has 1,570 paying client companies (up 53 year-over-year) across 4,848 locations (up 130 year-over-year).
  • Recent regulatory changes (rental management business regulation, e-signature legalization, invoice system) have driven increased demand for compliant SaaS solutions.

• Financial & Operational Performance

  • Achieved return to positive operating profit: Q2 2025 operating profit reached 66 million yen, a 93 million yen improvement from the year-ago operating loss; net profit was 39 million yen.
  • EBITDA hit an all-time quarterly high of 216 million yen, up 54% year-over-year, with EBITDA margin improving significantly.
  • Negative churn (negative 0.26%) achieved for MRR: revenue expansion from existing clients exceeds lost revenue from churn. ARPU is 145,000 yen, on a gradual upward trend.
  • Gross margin recovered to 60% for the first time in recent periods, with both cost of goods sold ratio and SG&A ratio improving year-over-year due to cost efficiency efforts.
  • Shifting development from outsourced to in-house, reducing external contracting costs year-over-year; less investment required to deliver required development while maintaining overall investment levels.
  • Free cash flow turned positive in H1, as the company works to restore balance between operating and investing cash flow after a prior year of heavy investment. Took on ~200 million yen in new borrowing to secure liquidity for larger, longer-term implementation projects, while maintaining strong equity capital levels.

• New Product Launches & Updates

  • Launched a new office tenant management app for office buildings in collaboration with Sun Frontier Fudousan, marking the company's first entry into the office real estate market.
  • Released the new いい生活 Building Management Cloud, an extension product for いい生活 Rental Management Cloud to streamline property maintenance and repair work, expanding the addressable market for existing rental management clients.
  • いい生活 Square, the inter-broker property information distribution platform, has grown to 25,000 registered companies, with more core regional real estate firms starting to list their property inventory. The company is focused on growing transaction volume to increase platform fee revenue.
  • Generative AI adoption: 90% of internal employee roles use generative AI for work efficiency, and AI features are already being rolled out into customer products (including AI message generation and image classification), with broader rollout planned.
  • Continued multi-phase version updates for いい生活 Sales Trading Cloud.

1. Subscription segment: Revenue grew 5.4% year-over-year, accounting for 84.8% of total revenue (1.325 billion yen of the 1.562 billion yen total H1 revenue). Annual Recurring Revenue (ARR) reached 2.733 billion yen, up 6.6% year-over-year. 2. Solution segment (including BPaaS/data modernization services): Revenue grew 24.8% year-over-year, accounting for the remaining 15.2% of total revenue. The Q2 2025 total company revenue was 1.562 billion yen, up 7.9% year-over-year, marking a new all-time high for quarterly revenue.

• Management maintained the full-year 2026 March fiscal year guidance with no revisions: full-year revenue is guided at 3.196 billion yen, and full-year operating profit is guided at 107 million yen.
  • H1 revenue reached 48.9% of the full-year guidance, and H1 operating profit reached 62.2% of the full-year guidance. Management notes that it is typical for SaaS revenue to accelerate in the second half, so the current progress is on track and the full-year target is fully achievable.
  • Full-year EBITDA is guided at 681 million yen, up 36.1% year-over-year, which remains on track based on H1 results.
  • The company continues its existing growth strategy unchanged: focus on supporting enterprise-class clients' shift to cloud SaaS, strengthen its multi-product offering, grow transaction volume and fee revenue on いい生活 Square, and expand data modernization service capacity.

• The real estate industry's ongoing severe labor shortage could slow SaaS adoption if not addressed via the company's BPaaS offering, though this risk is mitigated by the company's end-to-end implementation support.
  • Revenue from the solution segment has quarterly volatility, though the underlying growth trend remains stable.
  • Increased competition for property management client services could pressure growth, which the company is addressing via expanded product offerings (like the new Building Management Cloud) to increase ARPU and customer retention.
  • Cybersecurity risks are growing industry-wide, which the company is mitigating via holding three relevant ISO international certifications for information and cloud security to maintain a robust security posture.

No transcribed Q&A section was included in the provided earnings call transcript.