eWeLL Co.,Ltd. Q3 FY2025 earnings call

• Corporate Strategy & Recognition

  • eWeLL won the 2025 Porter Prize, recognized for its focused strategy on the home healthcare visiting nursing space, unique win-win business model aligned with customer growth, and strong moat built from product and operational excellence, alongside two large Japanese companies with market cap over 1 trillion yen.
  • The company maintains a focused "selection and concentration" strategy, concentrating all resources on the visiting nursing segment rather than diversifying into adjacent larger healthcare markets.

• New Product Development (AI訪問予定・ルート)

  • As of end of October 2025, free trial sign-ups reached 1,130 stations, covering 34% of existing iBow customers. Sign-up rates hit 62% for large stations and 56% for medium stations (the company's core target), with 4x growth in sign-ups from multi-station operators and small stations.
  • Customer survey found 70% of stations have high/very high interest in the product; top pain points addressed are complex scheduling (cited by 53% of respondents), emergency response challenges, and eliminating task siloing/ownership (cited by 60% of respondents), which aligns with industry-wide needs to improve productivity ahead of 2040 peak visiting nursing demand.

• Operational KPIs

  • Total contracted stations grew 17.1% year-over-year, with 150 new acquisitions in Q3 (a record high for the quarter, which typically sees slower new growth) and net additions flat with the prior quarter. Churn is contained at 6% of contracted growth, down from prior levels.
  • Monthly average customer per-station revenue hit 88,100 yen, up 11% year-over-year, with double-digit growth maintained through 2025, driven by upselling to AI services and BPaaS. iBow base revenue also grows steadily as existing customers increase visit volume.
  • Revenue churn rate was 0.18% in Q3, down from 0.2% year-over-year, driven by proactive churn prevention outreach and unique value from proprietary AI services and trusted security.
  • Market share (penetration of all Japanese visiting nursing stations) increased 1.4pp year-over-year to 18.1%.
  • Total headcount reached 103 at end of Q3, up 6 from Q2, with hires concentrated in support, BPaaS, sales and development to support growth.

• Capital Return & ESG

  • The company approved a 1 yen dividend increase based on strong performance and healthy cash flow, to balance growth investment and shareholder returns, and attract long-term investors. Over 70% of employees participate in the employee stock ownership plan, well above the TSE average of 38%.
  • The company expanded sustainability disclosure, adding 22 social ESG metrics and 13 governance ESG metrics in Excel format, plus a SASB alignment table, with plans to add GRI disclosures in the future. The company views its business growth as directly aligned with sustainability goals, as it helps build a sustainable at-home healthcare system for Japan.

1. Cloud Service: achieved 30% year-over-year revenue growth in Q3. The AI訪問看護計画書・報告書 product recorded 29 million yen in Q3 revenue, and cumulative revenue for the first three quarters exceeded 72 million yen, beating budget. The法定研修サービ grew 3x year-over-year, driven by seasonal demand. The segment's cumulative gross profit margin is 81%, with Q3 single-quarter gross profit margin at 80.0% (down slightly due to increased maintenance and outsourcing costs). This segment contributes approximately 75% of total company revenue. 2. BPaaS: Q3 revenue was 115 million yen, up 60.2% year-over-year, with cumulative 9M revenue of 317 million yen, up 69.4% year-over-year. Cumulative gross profit margin is 64.4%, with Q3 single-quarter gross profit margin at 68.1%, up on rising scale, and the company targets a long-term gross margin of ~60% for this segment. This segment contributes approximately 25% of total company revenue.

• Full year 2025 revenue and operating profit guidance is maintained at the initial announced level, with Q3 progress of 73.8% for revenue and 80% for operating profit versus full year guidance, an improvement over the 72.3% and prior year's lower operating profit progress. The company expects full year results to land slightly above initial guidance, after planned Q4 investments are realized.
  • Full year gross profit margin is expected to land around initial guidance, despite Q3 coming in above forecast, as increased investment spending in Q4 will bring the full year in line with plans. The company targets a long-term operating profit margin of ~45%.
  • The company maintains its current medium-term target of 25-30% annual revenue and profit growth through 2027, and views this growth rate as sustainable. The updated next medium-term plan will be released in February 2026.
  • The 15% penetration target for paid AI訪問予定・ルート among iBow customers by 2026+ is maintained, with the company working toward this target ahead of paid launch in January 2026.

• The visiting nursing industry has a structurally high closure rate, which drives inherent customer churn despite the company's proactive churn prevention efforts.
  • There is a persistent industry-wide shortage of experienced administrative staff for BPaaS, which could limit the segment's growth if hiring does not meet targets.
  • As market growth accelerates due to policy tailwinds, competition could intensify, and security and system integration requirements could become more stringent, creating new operational challenges.
  • The 2026 revision of medical service fees is still under discussion, so final impacts cannot be fully forecast, even though the company expects it to be a net positive.

Q: What is the competitive advantage of AI訪問予定・ルート compared to rival products? / A: eWeLL's product has three core advantages. First, it integrates automatically and continuously with the company's core iBow electronic medical record system, so changes to patient status or emergency visits update automatically without manual re-entry that causes errors or duplicate work. Second, the AI scheduling accounts for nurse workload and nursing quality needs, using historical data from iBow to balance workload across the team and avoid overburdening individual nurses. Third, it shares the same intuitive user interface and design as iBow, so existing users can adopt it quickly without significant retraining.

Q: What factors drove the stronger than expected new customer acquisition in Q3, a seasonally slow quarter, and how is Q4 tracking? / A: Two key factors drove the result. First, the 2024 regulatory change pushed ICT adoption in visiting nursing, leading to increased switching from legacy systems, plus more new station openings from large corporate players that increased demand. Second, two operational changes worked: the company held 7 industry seminars monthly to solve industry problems and expand access to new customer segments, and strengthened customer success activities that increased word-of-mouth referrals from existing customers. The company expects this strong trend to continue into Q4.

Q: What will be the impact of the 2040 regional healthcare restructuring plan on eWeLL's business? / A: The plan's core focus on shifting care from hospitals to home care is a large structural tailwind for eWeLL, as it increases the size of the addressable market for iBow and elevates the social importance of visiting nursing. The policy also prioritizes productivity improvement via digital transformation to address labor shortages, which increases demand for eWeLL's AI and efficiency tools. Longer term, it will also drive demand for the company's inter-provider information collaboration platform けあログっと. While increased competition and higher regulatory requirements are possible challenges, eWeLL's deep industry expertise puts it in a strong position to capture this growth.

Q: What is the company's top priority for growth drivers going forward? / A: Priorities differ by time horizon. In the short term (next few years), the top focus is expanding the AI business and driving upselling/cross-selling of new and existing services to the existing customer base to maintain high growth. In the medium to long term, the focus will shift to developing new services to solve remaining inefficiency problems in the visiting nursing and home healthcare space. The company is also monitoring overseas market opportunities but has no immediate plans for expansion.