Escrow Agent Japan,Inc. Q2 FY2026 earnings call

• Business Model & Core Value

  • EAJ Group provides BPaaS (Business Process as a Service) that standardizes and automates specialized professional operations via cloud, addressing social challenges like labor force decline and increasingly complex transactions to improve client productivity, convenience and operational safety.
  • Approximately 80% of revenue comes from high-continuity stock-type BPaaS and cloud system services, creating a stable revenue structure with high switching barriers from accumulated industry expertise and end-to-end BPO+SaaS integrated service delivery.
  • Competitive advantage comes from combining deep industry expertise with strong digital transformation (DX) development capability, paired with large-scale, high-quality stable processing via centralized operation centers.

• 2Q 2026 Fiscal First Half Overall Performance

  • Consolidated revenue hit 2.368 billion yen, operating profit 159 million yen (0.159 billion yen), ordinary profit 158 million yen (0.158 billion yen), and net profit attributable to parent company shareholders 126 million yen (0.126 billion yen). While the period saw year-over-year lower revenue and profit, all profit metrics exceeded initial guidance: operating profit was 19.9% above forecast, and net profit was 41.5% above forecast; the year-over-year decline was within management expectations.
  • Progress against full-year guidance reached 43.6% for consolidated revenue and 33.3% for consolidated operating profit. Operating profit dipped from prior year end through Q1 due to upfront investment, but profit margin has improved on new customer gains and existing customer policy shifts in the Financial Solution segment.

• Mid-Term Management Plan 2027 Progress

  • The plan targets 6.2 billion yen in consolidated revenue and 1 billion yen in operating profit for the final 2028 February fiscal year, focused on improving productivity via business standardization and automation. As of first half 2026, total cumulative investment progress against the mid-term plan reached 20.2%, with total planned full-year 2026 investment of 182.8 million yen; first half investment included 53.7 million yen for human capital, 11 million yen for R&D, and 30.8 million yen for the Sampolonia Series product line.
  • External Strategy: Continued business inventory and analysis to identify candidate processes for systemization by year end, with work delayed by customer-specific process and security policy variations. The Financial Solution segment is consolidating inheritance/end-of-life service operations to enable one-stop service delivery, which will drive increased adoption of the AI inheritance system in the Legal Professional segment. The Real Estate Solution segment is consolidating operations ahead of a new operation center opening, focused on high-demand collateral eligibility assessment and H'OURS services. The Architectural Solution segment is scaling processing volumes while standardizing quality via AI-powered check services and a new PAD office opening.
  • Internal Strategy: Rolling out human capital development initiatives including a new personnel system and management training programs. Future plans include launching university partnership recruitment promotion for 2027 new graduate hiring, and expanding employee benefits to improve engagement.

1. Financial Solution Segment: Revenue of 910 million yen (0.91 billion yen), segment profit of 418 million yen (0.418 billion yen), reporting a year-over-year decrease in both revenue and profit. It accounts for approximately 38.4% of total consolidated first-half revenue. 2. Real Estate Solution Segment: Revenue of 292 million yen (0.292 billion yen), segment loss of 84 million yen (-0.084 billion yen), reporting a year-over-year decrease in both revenue and profit. It accounts for approximately 12.3% of total consolidated first-half revenue. 3. Architectural Solution Segment: Revenue of 665 million yen (0.665 billion yen), segment profit of 90 million yen (0.09 billion yen), reporting a year-over-year increase in both revenue and profit. It accounts for approximately 28.1% of total consolidated first-half revenue. 4. Legal Professional Solution Segment: Revenue of 495 million yen (0.495 billion yen), segment profit of 57 million yen (0.057 billion yen), reporting a year-over-year increase in revenue but decrease in profit. It accounts for approximately 20.9% of total consolidated first-half revenue. Total first-half consolidated revenue is 2.368 billion yen.

• Full-year 2026 February fiscal year guidance is maintained, with no changes made, as management will continue monitoring second-half market conditions closely.
  • In the Financial Solution segment, management expects service utilization to recover in the second half as partner financial institutions launch mortgage promotional campaigns.
  • In the Real Estate Solution segment, management expects transaction volumes to grow through Q4 as scheduled real estate auction transactions are completed and customer outreach and relationship rebuilding for the H'OURS new system progresses.
  • In the Architectural Solution segment, management will launch trial operation of an AI-powered drawing and on-site inspection check system in the second half to further improve operational efficiency and quality consistency.
  • In the Legal Professional Solution segment, management will complete a proof-of-concept test of the AI inheritance tool "AI Sōzoku Mitsurou-kun" with Koriyama City, Fukushima Prefecture in the second half, with plans to expand deployment to other local governments if the test delivers positive results.
  • Mid-term growth targets under Mid-Term Management Plan 2027 (6.2 billion yen consolidated revenue, 1 billion yen operating profit for fiscal 2028) remain unchanged.

• The Financial Solution segment has experienced year-over-year revenue and profit declines due to falling mortgage transaction volumes at internet-only banks, which pressured near-term performance in the first half.
  • The Real Estate Solution segment reported a segment loss in the first half driven by delayed real estate auction transaction settlements, higher system costs for the new H'OURS platform, and temporary declines in service utilization.
  • Business process inventory and systemization work aligned with the mid-term productivity improvement strategy has been slowed by customer-specific process variations and differing security requirements, potentially pushing timelines for planned automation gains.

No formal question and answer section is included in the provided transcript.