Koukandekirukun,Inc. Q2 FY2026 earnings call

• Overall Consolidated Performance

  • Total consolidated revenue grew 14.8% year-over-year in the first half. Weak overall consumer sentiment suppressed industry search volume to ~90% of prior year levels, pressuring first half results, but August and September saw a recovery in consumer demand and order growth.
  • One-time M&A-related costs were incurred in the period, most M&A activity is done via personal connections without broker fees to keep costs low.
  • TV CM advertising investment continues, with customer survey data showing a gradual increase in brand awareness from mass media exposure.

• Strategic Updates and New Initiatives

  • Entered into a capital and business alliance with Cainz, a leading Japanese home center with 4 billion yen in annual home renovation revenue, aligned on shared quality-first priorities. Koukan Dekiru Kun will provide its Replaform platform (modeled after ZOZOTOWN's aggregated platform service) to Cainz, supporting end-to-end services from quoting to installation and after-sales maintenance under Cainz's brand to improve small project efficiency.
  • The Koukan Skill Academy, an in-house tradesman training program, has completed its second cohort with successful conversion of graduates to productive staff. The program combines classroom education and on-site OJT, and addresses industry-wide skilled labor shortages by offering a modern work model where tradesmen (called

1. 住設DX事業 (Jusetsu DX Business): Revenue increased 17.5% year-over-year, marking a record-high second quarter revenue. Gross profit increased 3% year-over-year, but gross margin decreased compared to the prior year, resulting in an operating loss of 0.134 billion yen for the first half. BtoB sub-segment (led by acquired Hamano Technical Works) is performing steadily with maintained profit margins, though revenue scale remains relatively small as it focuses on low-volume manufacturer repair services. 2. ソリューション事業 (Solution Business): This SE-related business grew steadily, achieved profitability in the period, with very smooth progress in engineer hiring. The segment continues working on profit margin improvement and higher productivity, with future revenue growth expected to follow expanding headcount.

• The company maintains its 3-year medium-term target to double total consolidated revenue from the base period, with this fiscal year being the first year of the plan. The company is already executing parallel preparation measures to hit sustainable profitability targets alongside revenue growth.
  • The company expects the lower BtoC average order value (driven by air conditioner expansion) to improve in the second half as higher-priced products typically see stronger seasonal demand.
  • The company targets sustainable 120%+ year-over-year growth (115% organic growth plus incremental growth from marketing and new initiatives), and does not pursue overly aggressive 150%+ growth that would strain operational capacity.
  • The company still plans to achieve full-year profitability, with no changes to existing plans as of the second quarter, and expects to cross the break-even point in the seasonally stronger second half.
  • Advertising investment will continue at planned levels in the second half, with no major cuts to support long-term brand building.

• Weak consumer sentiment in the first half suppressed industry demand, which hurt first half profitability and required a recovery effort in the second half.
  • Air conditioner sales have pushed down overall segment gross margin in the short term, and the profitability profile of this new category is still being adjusted.
  • Rapid surges in order volume can strain on-site installation capacity, even when total headcount is sufficient, due to the operational nature of on-site renovation work.
  • Overly aggressive rapid growth would compromise quality and operational stability, which creates a trade-off between growth speed and sustainable business quality.

Q: What is the revenue model for the Cainz alliance's site construction and training school? / A: For the on-site-less model, Cainz will use Replaform. Koukan Dekiru Kun handles quoting, product procurement, and installation as a white-label partner, so revenue comes from product sales, installation fees, and Replaform usage fees, with efficient growth from no incremental advertising spend needed.

Q: What drove the 20%+ year-over-year order growth in August and September for BtoC, and can this pace be sustained? / A: Growth has monthly volatility; the company prefers to track quarterly results. 10-15% organic growth is sustainable, built on a strong repeat customer base that makes up 25-30% of orders, as existing customers return to replace other home fixtures over time. Combined with marketing, the company can sustain 20%+ growth, but will not pursue rapid 50% growth that strains on-site capacity, balancing growth and operational quality.

Q: Air conditioner sales pulled down gross margin—what lessons were learned and what is the path forward? / A: The company tested full-scale air conditioner sales this year, learning that price dynamics are very different from core home fixture products, requiring timely price adjustments. After initial slower-than-expected growth, adjustments led to a late surge in orders. Profitability will remain under pressure in the near term, and the company will review strategy for next season, including a potential rebalancing to focus more on higher-margin core products.

Q: Do you plan to cut advertising to hit second half profitability, and can you achieve a full operating profit surplus? / A: There are no changes to current plans, and the company still targets second half profitability. Cutting advertising to hit short-term profit targets would hurt long-term growth, so the company will maintain planned advertising spend and relies on higher seasonal demand in the second half to cross the break-even point and generate profit.