Key Positives From The 1Q Results
SG&A fell 19.9% YoY, and operating income came in at JPY 72M, swinging from a loss in the year-ago quarter. Selective ad spending and SEO gains allowed MogeCheck to post a 31.3% margin despite lower revenue. INVASE doubled revenue on higher contract volumes. The division of roles between the two pillars is now clear.
- SG&A Discipline: SG&A fell to JPY 363M (-19.9% YoY). The JPY 90M cut in SG&A more than offset the JPY 7M decline in gross profit, driving the swing to an operating profit.
- MogeCheck Profitability: Segment profit reached JPY 83M (prior-year 1Q: JPY -7M), a 31.3% margin. SEO-driven gains in customer acquisition efficiency are shifting the business toward a revenue model less dependent on advertising.
- INVASE Top-Line Growth: Revenue reached JPY 2,224M (+102.7% YoY). Contracts rose to 187 (+61.2% YoY) and cumulative members to 69,430 (+28.0% YoY), broadening the business base.
- Inventory Reduction and Deleveraging: Real estate for sale fell JPY 347M vs. the prior FY-end. Cash and deposits rose JPY 296M and short-term borrowings fell JPY 192M, reflecting progress on both monetization and debt repayment.
- Share Buyback: The board approved a buyback of up to 400,000 shares / JPY 100M to fund stock-based compensation. The move signals attention to dilution from equity compensation.
Key Concerns From The 1Q Results
INVASE's share of revenue rose to 89.3% (our estimate), and gross profit margin fell 14.0pt YoY to 17.5%. INVASE's segment loss widened despite higher revenue. Profitability management in the property trading business therefore drives volatility in consolidated earnings. MogeCheck's profit growth came from cost cuts, with no sign yet of a top-line recovery.
- Wider INVASE Loss: The segment loss widened to JPY -10M from JPY -2M a year earlier. Price trends for high-end condominiums in certain areas eroded the profitability of properties held.
- Gross Margin Compression: Gross profit margin was 17.5% (prior-year 1Q: 31.5%). The higher mix of property trading makes it harder for revenue growth to translate into profit.
- MogeCheck User Decline: User registrations fell to 19,753 (-35.2% YoY). Financial institutions continued to curb online advertising, and segment revenue fell 14.2% YoY.
- Rising Interest Expense: Interest expense rose to JPY 4,693K from JPY 679K a year earlier. In a rising-rate environment, the cost of debt-funded property acquisitions is becoming heavier.
Focus Areas / Items To Monitor Going Forward
- INVASE Margin Recovery: Timing of a recovery in profitability on INVASE's property holdings. Also key is how high-end condominium prices affect inventory valuations and gains on sale. A return to segment profitability is a precondition for the full-year plan.
- MogeCheck Referral Revenue: How the drop in MogeCheck registrations will affect future referral revenue. Also key is when management decides to pivot back to growth reinvestment as financial institutions restore ad budgets.
- Earnings Trajectory: 1Q progress is 19.6% against the full-year operating income plan of JPY 371M. Investors need clarity on whether profits are again expected to be 2H-weighted, as in the prior year, and on the quarterly build-up path.
- Scale of the properties held with deteriorated profitability, and the sales outlook for the JPY 981M of real estate for sale
- Revisions to INVASE's property acquisition criteria, and policy on diversification by area and price band
- Initiatives to restore MogeCheck user registrations, and criteria for redeploying advertising spend
- Progress in realizing business synergies from the capital and business alliance with Zenkoku Hosho
- Purpose of the JPY 30M increase in long-term loans to directors, and its relationship to stock-based compensation and the employee stock purchase program
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 2,491M | +76.9% |
| Cost of Goods Sold | JPY 2,055M | +113.1% |
| Gross Profit | JPY 436M | -1.7% |
| └ Gross Profit Margin | 17.5% | -14.0pt |
| SG&A | JPY 363M | -19.9% |
| Operating Income | JPY 72M | Turned profitable (prior-year 1Q: JPY -9M) |
| └ Operating Income Margin | 2.9% | +3.6pt |
| Interest Expense | JPY 4,693K | +591.2% |
| Recurring Profit | JPY 70M | Turned profitable (prior-year 1Q: JPY -7M) |
| Quarterly Net Income Attributable to Owners of Parent Company | JPY 68M | Turned profitable (prior-year 1Q: JPY -16M) |
| EPS | JPY 6.74 | Turned profitable (prior-year 1Q: JPY -1.84) |
Margins and YoY figures are our estimates. The higher mix of property trading pushed cost of goods sold up faster than revenue, leaving gross profit roughly flat YoY. The swing to an operating profit came from lower SG&A. Average shares outstanding rose to 10,198,900 (prior-year 1Q: 9,120,550), but EPS still turned positive.
Performance By Business Segment
INVASE doubled revenue, lifting its share of sales to 89.3% from 77.9% a year earlier (our estimate). MogeCheck, however, remains the company's profit engine.
Segment Performance Table
| Segment | Revenue | YoY | Operating Income | YoY | Margin |
|---|---|---|---|---|---|
| MogeCheck Business | JPY 266M | -14.2% | JPY 83M | Turned Profitable | 31.3% |
| INVASE Business | JPY 2,224M | +102.7% | JPY -10M | Loss Widened | -0.5% |
| Total | JPY 2,491M | +76.9% | JPY 72M | Turned Profitable | 2.9% |
YoY figures and margins are our estimates. Segment profit/loss is on an operating income basis.
- INVASE (Property Trading): Revenue rose 102.7% YoY. The trading-centric business model at subsidiary Condominium Asset Management has stabilized, and contracts rose to 187 (+61.2% YoY).
- INVASE (Member Base): Expanded features in "INVASE" and "INVASE Pro," along with AI adoption, lifted cumulative members to 69,430 (+28.0% YoY). Members were acquired while ad spend stayed low.
- MogeCheck (Profit): Efficient ad deployment and SEO gains held down costs. Segment profit reached JPY 83M, a swing to profitability.
- MogeCheck (Revenue): Revenue fell 14.2% YoY as financial institutions continued to curb online advertising amid rising rates. Site traffic fell to 1,661,176 (-6.5% YoY), and user registrations fell to 19,753 (-35.2% YoY).
- INVASE (Profit): The segment loss widened to JPY -10M. Price trends for high-end condominiums in certain areas reduced the profitability of some properties held.
Progress Versus Full-Year Guidance
Revenue progress stands at 24.3%, ahead of 16.9% a year earlier (1Q actual of JPY 1,407M against the prior FY total of JPY 8,317M). Operating income progress, however, is only 19.6%. Last fiscal year, the company posted a 1H cumulative operating loss of JPY -48M before building to JPY 222M for the full year. A recovery in INVASE's property-level profitability is a prerequisite for meeting the full-year plan.
| Item | Value (1Q Cumulative) | Full-Year Forecast | Progress Rate |
|---|---|---|---|
| Revenue | JPY 2,491M | JPY 10,241M | 24.3% |
| Operating Income | JPY 72M | JPY 371M | 19.6% |
| Recurring Profit | JPY 70M | JPY 369M | 19.0% |
| Net Income | JPY 68M | JPY 368M | 18.7% |
Progress rates are our estimates.
- 2H-Weighted Profits: Prior-year cumulative operating income/loss was JPY -9M at 1Q, JPY -48M at 1H, JPY 64M at 3Q and JPY 222M for the full year, with profits concentrated in 2H.
Changes To Guidance
Full-year guidance announced on 2026/08/13 is unchanged: revenue of JPY 10,241M, operating income of JPY 371M and net income of JPY 368M. 1Q delivered both revenue growth and an operating profit. From 2Q onward, margins on INVASE inventory sales will be the key to meeting the plan.
Commentary On Shareholder Returns
The annual dividend forecast is unchanged at JPY 0.00. On 2026/11/12, the board approved a share buyback of up to 400,000 shares (3.88% of total shares outstanding) or JPY 100M. Shares will be bought on the open market from 2026/11/13 to 2026/12/30. The purpose is to fund stock-based compensation for directors and employees. As a subsequent event, payment was completed on 2026/10/23 for 119,600 new shares issued as restricted stock compensation (JPY 320 per share; JPY 38M in total).
Financial Position
The equity ratio rose 5.0pt from the prior FY-end to 75.6%, and the company remains in a net cash position. Proceeds from sales of real estate for sale were used to repay borrowings, strengthening the balance sheet.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Cash and Deposits | JPY 2,202M | +15.6% vs. prior FY-end |
| Real Estate for Sale | JPY 981M | -26.1% vs. prior FY-end |
| Total Assets | JPY 3,831M | -4.4% vs. prior FY-end |
| Shareholders' Equity | JPY 2,897M | +2.4% vs. prior FY-end |
| Interest-Bearing Debt | JPY 691M | -24.1% vs. prior FY-end (our estimate) |
| └ Short-Term Borrowings | JPY 407M | -32.1% vs. prior FY-end |
| └ Current Portion of Long-Term Borrowings | JPY 107M | Unchanged from prior FY-end |
| └ Long-Term Borrowings | JPY 176M | -13.2% vs. prior FY-end |
| Retained Earnings | JPY -930M | +JPY 68M vs. prior FY-end |
| EBITDA | JPY 79M | Operating income + depreciation of JPY 6,916K (our estimate) |
| Metric | Value | Notes |
|---|---|---|
| Net Debt/EBITDA | Net cash | Net debt of JPY -1,510M (our estimate) |
| Debt/Equity | 0.24x | 0.32x at prior FY-end (our estimate) |
| Interest Coverage Ratio | 15.5x | Operating income ÷ interest expense (our estimate) |
| Equity Ratio | 75.6% | +5.0pt vs. prior FY-end (company disclosure) |
Disclosures Released Alongside The Earnings Announcement
- 2026/11/12Released supplementary materials for 1Q results and held the earnings briefing the same day (FY6/27 1Q Earnings Presentation Materials)
- 2026/11/12Disclosed that directors and employees will buy company shares through the employee stock purchase program. The move signals alignment between management and shareholder interests (Purchase of Company Shares by Directors and Employees Through the Employee Stock Purchase Program)
- 2026/11/12Approved a share buyback of up to 400,000 shares / JPY 100M. The buyback runs from November 13 to December 30 and will fund stock-based compensation (Notice Regarding Determination of Matters Related to Acquisition of Treasury Shares)
Major Announcements During The Quarter
- 2026/08/14Advance disclosure on the corporate split of subsidiary Condominium Asset Management, which operates the INVASE business
- 2026/09/25Approved the issuance of 119,600 new shares as restricted stock compensation for directors, employees and subsidiary directors
- 2026/09/30Updated and released the growth potential document outlining the medium-term growth strategy and business plan
- 2026/10/01Post-transaction disclosure on the corporate split of Condominium Asset Management
- 2026/10/23Payment completed for new shares issued as restricted stock compensation; total issuance of JPY 38M
Large-Shareholding Filings / Material Proposals Over The Past Year
- Rakuten Securities: 6.3%→5.3% (2026/07/31) - Temporary holding related to securities operations
- Zenkoku Hosho: New→10.0% (2026/01/08) - Held for the purpose of a capital and business alliance with the issuer
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