MFS,Inc.

Business Details

An online intermediary service that proposes optimal home loans to prospective home buyers via web and smartphone apps. Based on a patented analysis of users' creditworthiness, the service calculates the probability of loan approval and supports application for screening. The revenue model is a flow-based business that receives fees from financial institutions and advertising agencies either at the time of screening application (referral fee) or at the time of loan execution (execution fee). Backed by strong relationships with partner financial institutions, the company continues to offer exclusive special interest rates, maintaining product competitiveness.

Recent Overview

Revenue recognition delay from the transition to the execution fee model continued, but a recovery trend emerged in the third quarter

At major partner financial institutions, the revenue model was progressively transitioned from "referral fee" (revenue recognized at the time of screening application) to "execution fee" (revenue recognized at the time of loan execution), causing revenue to decline significantly in the first and second quarters. However, in the third quarter, fee generation began to materialize, showing a recovery trend. Although user registrations declined 7.9% year on year to 95,301 due to reduced advertising expenditure, the number of customer acquisitions expanded 9.7% year on year to 5,985,015. Owing to the expansion of generative AI-powered services and the effectiveness of the pre-screening feature, the number of loan executions at partner financial institutions has steadily increased.

Key Products

Growth Drivers

• Recovery and stabilization of revenue following completion of the transition to the execution fee model (supported by a steady increase in loan executions)
• Maintenance of product competitiveness through continued acquisition of exclusive special interest rates backed by strong relationships with partner financial institutions
• Increase in loan executions through the use of MogeCheck Pre-screening (Real-time Screening)
• Achieving both quality and quantity in customer acquisition through the expansion of services such as the generative AI-powered AI Advisor and home loan diagnostic comments
• Growing user interest in the home loan market amid the continued transition to a full-fledged rising interest rate phase
• Strengthened customer acquisition through diverse channels including online advertising, media exposure, and affiliates
• Increase in screening applications through the expansion of the partner network, including affiliated real estate companies and insurance agencies

Risks

• Short-term profit pressure due to a delay in revenue recognition timing associated with the transition to the "execution fee" model (segment profit for the 9 months cumulative period declined 96.2% year on year to ¥15 million)
• The impact on medium- to long-term screening application volumes from the decline in user registrations (down 7.9% year on year) due to reduced advertising expenditure
• Risk of declining fee income due to financial institutions curbing advertising expenditure amid rising interest rates
• Possibility that the rate of revenue growth becomes smaller relative to the rate of increase in screening applications (due to fluctuations in fee per application)
• Risk of rising customer acquisition costs due to intensifying competition with rivals such as home loan comparison sites
• Risk of leakage or improper handling of confidential information, including personal credit information

Business Details

A comprehensive platform service centered on the sale, purchase, and brokerage of investment properties as well as the intermediation of investment property loans. The transition from a brokerage model to a buy-and-resell model has gained full momentum, establishing a system that handles everything from property procurement to sales and rental management. Contract volume has increased substantially, driven by a procurement strategy focused on popular properties in high-demand areas and smoother fundraising and loan arrangement through collaboration with partner financial institutions. The company is also advancing the automation of the customer service process using a proprietary property valuation model and conversational AI.

Recent Overview

The transition to the buy-and-resell model bore fruit, with revenue approximately 12.9x higher year on year and segment performance turning from a loss to a profit

During the 9 months cumulative period of FY2026 (ending June 2026), the transition from the brokerage model to the buy-and-resell model largely bore fruit. Revenue reached ¥4,867 million (approximately 12.9x year on year), and segment profit turned positive at ¥49 million (versus a segment loss of ¥222 million in the same period of the prior year). The number of property contracts increased 93.6% year on year to 484. On the other hand, voucher customer acquisitions, applications, and member registrations have declined significantly with the shift to the buy-and-resell model. On the technology front, the company is also advancing the system integration of a proprietary property valuation model and the development of automation for the customer service process using conversational AI.

Key Products

Growth Drivers

• Substantial expansion in revenue scale driven by the full-fledged transition of the business model to buy-and-resell (revenue of ¥4,867 million for the 9 months cumulative period of FY2026 ending June 2026, approximately 12.9x year on year)
• Increase in contract volume through a procurement strategy focused on popular properties in high-demand areas and collaboration with partner financial institutions (484 contracts, up 93.6% year on year)
• Establishment of an integrated procurement-sales-management service system through the launch of the rental management service, and building of long-term relationships with users
• Improved buy-back appraisal accuracy through system integration of a proprietary property valuation model, and automation of the customer service process using conversational AI
• Expanding demand for investment properties, tailwinded by rising asset prices amid accelerating inflation

Risks

• Inventory risk related to real estate for sale associated with the transition to the buy-and-resell model (¥919 million in real estate for sale recorded as of the end of March 2026)
• Risk of declining demand for investment properties due to deterioration in the real estate market or rising interest rates
• Increased working capital needs and rising borrowings associated with the transition to the buy-and-resell model (short-term borrowings of ¥411 million, current portion of long-term borrowings of ¥107 million, and long-term borrowings of ¥230 million)
• Risk of a shrinking medium- to long-term customer pipeline due to the substantial decline in voucher customer acquisitions, applications, and member registrations (voucher customer acquisitions down 91.8% year on year)
• Risk of significant quarter-to-quarter performance volatility, since under the buy-and-resell model performance is affected by the timing of property sales