MFS, Inc. 2Q Earnings Call Flash Report

INVASE buy-sell model achieves profitability; MogeCheck prioritizes profit in ad spend, compressing losses to one-third of initial projections and targeting full-year profitability

February 13, 2026 at 21:20 GMT+9

Summary

For 1H FY06/2026 (cumulative through 2Q), the company posted an operating loss of JPY 48M, driven by the confluence of MogeCheck's billing-point change (from application submission to loan execution) and financial institutions' pullback in online advertising spend. That said, disciplined ad spend controls limited MogeCheck's 1H loss to approximately JPY 70M—roughly one-third of the initially projected JPY 200M. INVASE's buy-sell model gained traction, delivering its first-ever quarterly profit (JPY 32M) and posting JPY 28M in 1H operating income. Full-year budgets for both businesses remain unchanged, with management targeting full-year profitability through a 2H earnings recovery.

Key Points (Earnings Takeaways And Growth Actions)

Management Strategy And Market View
- CFO Hirayama explicitly stated at the briefing that achieving profitability is the top priority, even at the expense of top-line growth
- CMO Shiozawa assumes a terminal policy rate of 1.5% by 2027, with a risk scenario of above 2.0% depending on yen weakness
- Rate-cutting competition among online banks is easing; SBI Shinsei Bank raised rates from 0.59% to 0.64% during peak season
- Real estate prices expected to polarize: urban core has 1.5–2x upside over 10 years, supported by wage growth, dual-income pair loans, and the emergence of 50-year mortgages
Near-Term Business Progress And Drivers
- MogeCheck 2Q revenue of JPY 248M (▲47.8% YoY), primarily due to revenue deferral from the shift to execution-based billing
- On a management accounting basis (assuming a 12% loan execution rate), 1H would show JPY 173M in profit, indicating underlying earnings power is intact
- INVASE 2Q revenue of JPY 268M (net of gross-up, +121.6% YoY), with a record-high 220 contracts
- INVASE ad spend ratio declined to 8.9%, driven by revenue growth and improved marketing efficiency
Strategically Important Initiatives And Inflection Points
- MogeCheck AI Chat Phase 2 (AI-generated commentary on diagnostic results) launched in December, with confirmed CVR improvement
- Flat 35 ranking listings launched; from April, borrowing cap raised to JPY 120M to capture fixed-rate demand
- INVASE property management (PM) launched in December, establishing an end-to-end sourcing, sales, and management platform
- Ongoing collaboration under the capital and business alliance with Zenkoku Hosho (November 2025, 10% voting rights acquired), with further initiatives being advanced

Outlook And Strategy

Full-year guidance maintained (revenue JPY 3,779M, operating income JPY 195M), to be achieved via JPY 130M in 2H MogeCheck profit and over JPY 100M in 2H INVASE operating income
Mortgage applications during the January–March peak season will flow through as loan execution revenue 3–6 months later, making 3Q+ revenue recovery the key swing factor
Targeting full AI integration across all MogeCheck services (pre-diagnosis, results, post-diagnosis follow-up) by end of June 2026, laying the groundwork for external licensing of the AI engine
Vision 2030 unchanged (MogeCheck revenue JPY 20B / 10% market share; INVASE revenue JPY 5B on a gross profit basis)
CFO Hirayama noted at the briefing that revenue-contributing collaborations with Zenkoku Hosho and its ecosystem are progressing, with timely disclosure planned once details are finalized
Regarding approximately JPY 900M in real estate held for sale on the balance sheet, management explained a turnover period of 1.5–2 months and internal risk management rules including stop-loss and inventory cap limits

Positive Catalysts

INVASE's customer base centers on high-income earners with annual income of JPY 15M+; average property price of JPY 80M–100M supports strong unit economics
CAPM (AI pricing model)-driven arbitrage strategy for family-type units (30㎡+) is functioning, with 1.5–2 month turnover from sourcing to sale
MogeCheck cumulative registered users grew +143K YoY as of December 2025, with the user base continuing to expand
CMO Shiozawa's proactive media exposure is contributing to lower CPA; rising public attention to mortgages is boosting MogeCheck brand awareness
Enhanced Flat 35 incentives (Childcare Plus, refinance eligibility, JPY 120M cap) could expand fixed-rate demand (variable:fixed shifting from 9:1 toward 8:2)
Prolonged inflation driving real estate price appreciation is a tailwind for the INVASE business

Concerns / Risks

Financial institutions' ongoing pullback in online advertising spend remains a near-term headwind to MogeCheck's online mortgage shift thesis
The transition to execution-based billing defers revenue recognition by 3–6 months, introducing earnings volatility from fluctuations in loan execution rates
If policy rates rise above expectations (2%+), there is downside risk to overall mortgage demand and regional real estate prices
INVASE's approximately JPY 900M in real estate held for sale carries impairment risk in a market downturn
As online banks shift toward profitability-focused strategies, their appetite for online customer acquisition through MogeCheck's key partner channels could weaken further
Full-year profitability is heavily back-loaded (particularly 2H April–June loan execution revenue), creating credibility risk if targets are missed

Key Financial Highlights

For 1H FY06/2026 (cumulative through 2Q), the full-scale launch of INVASE's buy-sell model lifted revenue to JPY 3,250M (+187.4% YoY; ▲6.6% net of gross-up), while the billing-point change in MogeCheck resulted in an operating loss of JPY 48M. Full-year operating income of JPY 195M is planned.

Consolidated Earnings Summary
Segment Performance (1H Cumulative)

Item	1H Cumulative (2Q)	Prior Year 1H	YoY	2Q Quarterly	Prior Year 2Q	YoY (Quarterly)
Revenue	JPY 3,250M	JPY 1,131M	+187.4%	JPY 1,844M	JPY 597M	+208.7%
Operating Income	▲JPY 48M	JPY 52M	―	―	―	―
Net Income	▲JPY 54M	JPY 34M	―	―	―	―

MogeCheck Mortgage Applications (2Q): 14,763 (▲18.6% YoY, +10.5% QoQ)
MogeCheck Revenue per Application (2Q): JPY 16,853 (JPY 27,000 on management accounting basis)
MogeCheck CPA (2Q): JPY 12,276 (prior year 2Q: JPY 13,210)
MogeCheck Cumulative Registered Users (Dec 2025): +143K YoY
INVASE Contracts (2Q): 220 (prior year 2Q: 80, +175.0% YoY)
INVASE Ad Spend Ratio (2Q): 8.9% (prior year 2Q: 43.6%)
INVASE Cumulative Registered Users (Dec 2025): +9K YoY
Headcount (End of 2Q): 76 (engineers & designers: 21, ~28% of total)

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