7388.T

Core Business Model & Positioning

• FP Partner operates under the Money Doctor brand, positioning itself as a customer-focused "family doctor for personal finance", with 2,265 financial planners across 190 locations in all 47 Japanese prefectures.
• The company uses a split-operation model: corporate-led prospective customer acquisition, allowing sales staff to focus exclusively on financial planning, which has enabled rapid growth to over 199,000 total contracts in 16 years of operation.

1Q Operational Performance Trends

• The large 1Q decline stems from an administrative action that suspended partial lead distribution from a top partner in the prior year fourth quarter; due to the 2-3 month lag between lead distribution and revenue recognition, this reduced 1Q new contracts significantly. Increased selling, general and administrative expenses for business improvement initiatives also contributed to lower profits.
• Prospective insurance customer numbers recovered to 30,652 in 1Q, up 7,177 from the prior quarter, driven by resumption of lead distribution from some partners and strong in-house customer acquisition, which hit a near-record high of 7,237 customers.
• The new partnership with Yamada Denki launched in December 2025 has already grown to 2,000 monthly consultation reservations, up from 1,000 in the first month, with high customer affinity between Yamada Denki's national footprint and FP Partner's local-focused service.
• Sales staff headcount declined 68 from the prior quarter-end to 2,265, but monthly separations decreased 35 from the prior quarter, and job applications have recovered to their highest level in six months, pointing to improved hiring trends from 2Q onward.

Strategic Initiatives

• The company is expanding contract assumption business as a second core growth pillar: this business involves transferring customer policies from retiring agents to FP Partner, delivering immediate profitability from recurring commissions, with additional higher-margin revenue from additional contracts and cross-selling.
• The full-year target for contract assumption is a record high 150,000 transferred policies, targeting 1.5 billion yen in new contract revenue for the fiscal year. 1Q reached 43 candidate deals, near a record high, with only 3 agreements closed to date.
• Governance and business improvement progress: A business improvement committee was launched in December 2025, a company-wide employee survey was completed in February 2026, and a new executive meeting was established in March 2026 to separate execution from board oversight, strengthening governance.
• Long-term growth plans include doubling the number of locations and doubling the sales staff headcount to support expanded customer acquisition and contract assumption growth.

Capital Allocation & Shareholder Returns

• FP Partner will maintain progressive dividend policy, targeting a 45% payout ratio, with a planned full-year dividend of 94 yen per share for 2026. The shareholder benefit program has been converted to digital, offering 3,000 yen in digital gift vouchers to shareholders per half-year.
• The company targets maintaining ROE above its 11.33% cost of equity capital, prioritizing growth investment in contract assumption, DX systems, and human capital, alongside stable shareholder returns. It has implemented stock-based compensation and employee stock ownership plans to align staff and shareholder interests.

• Full year guidance is maintained, even though 1Q results missed the original forecast, with 21% full-year revenue progress, 12% operating profit progress, 11.5% recurring profit progress, and 11.6% net profit progress achieved in 1Q. Management sees sufficient room for full-year recovery from 2Q onward.
• Management expects the recovery in prospective customer volumes in 1Q will flow through to revenue and new contract growth starting in 2Q, targeting a full-year record high for total prospective customer numbers.
• The company targets achieving the full-year record 150,000 contract assumption transfer agreement target by the end of the fiscal year, positioning 2026 as the foundational year for this new core business.
• The Yamada Denki partnership is targeting 4,000 to 5,000 monthly prospective customer acquisitions by the end of the fiscal year, with revenue contribution from this partnership starting in 2Q.

FP Partner operates as a single insurance agency segment focused on life and non-life insurance broking. For the 1Q 2026 November period, the company reported total revenue of 7.615 billion yen, an 8.6% decrease year-over-year. Operating profit was 0.4 billion yen, down 49.8% YoY. Recurring profit was 0.397 billion yen, down 50.6% YoY. Quarterly net profit was 0.257 billion yen, down 51.3% YoY. The stock recurring commission revenue from existing in-force policies was 5.559 billion yen in the prior full fiscal year, which contributes stable recurring income to the business. Total in-force policies surpassed 2 million in 1Q, reaching 2,036,697 policies, a 239,683 increase YoY.

• A prior administrative action disrupted lead distribution from a major top partner in the prior quarter, resulting in a significant 1Q 2026 revenue and profit decline, with continued uncertainty around how quickly new partnership and in-house acquisition can offset lost volumes.
• Contract assumption growth relies on completing due diligence and negotiations with retiring agents, with a risk that deal closing could lag target, even though candidate inquiry volumes are currently strong.
• Continued net decline in sales staff headcount could slow recovery of new sales volumes, even though separation rates have improved and hiring applications are recovering.
• Industry-wide regulatory changes (including the 2026 Insurance Business Act revision) create operational uncertainty for the entire insurance agency sector, though FP Partner views this shift as an opportunity for increased contract assumption deal flow.

Q: What is the core driver of the 1Q performance downturn, and when will recovery occur? / A: The main cause is the suspension of lead distribution from a major partner in the prior quarter, which created a lagged negative impact on 1Q new contracts due to the 2-3 month gap between lead generation and revenue recognition. Prospective customer volumes have already recovered to over 30,000 in 1Q, so growth will resume starting in 2Q, with full-year performance expected to hit original targets.

Q: Is there a risk that the 150,000 full-year contract assumption target will be missed, and what is the current progress? / A: Only 3 transfer agreements have been signed in 1Q, but there are 43 active candidate deals, which is near a record high. Increased inquiry driven by upcoming Insurance Business Act revisions has lifted deal flow, and management still expects to hit the full-year target with steady deal closing through the remainder of the fiscal year.

Q: Why is the company maintaining its progressive dividend policy despite the 1Q miss? / A: The 1Q downturn is a temporary one-off impact from the prior administrative action, not a structural issue with the company's business model. The stable recurring stock revenue from existing in-force policies provides consistent cash flow to support continued progressive dividends, while management is confident full-year performance will recover to sustain the policy going forward.

Q: What is the long-term strategic role of the contract assumption business? / A: Contract assumption is being built as a second core growth pillar alongside the existing new customer acquisition business. It delivers immediate profitable recurring revenue, has higher margin than traditional partnered new acquisition from additional cross-selling, and is benefiting from industry consolidation driven by regulatory changes to become a major long-term growth driver for the firm.