ENVALITH
株式会社LIFULL logo

LIFULL Co., Ltd.

2120・Prime Market・Services

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株式会社LIFULL logo
LIFULL Co., Ltd.2120

Business

LIFULL Co., Ltd. was founded in 1997 and operates information services covering housing and related fields, centered on the real estate and housing information site "LIFULL HOME'S" and the real estate investment/income property information site "Kenbiya". In January 2025, the company classified its overseas business (LIFULL CONNECT, S.L.) as a discontinued operation, completing the concentration of management resources on its domestic business. Its reportable segment was changed to a single segment for the HOME'S-related business. Under the "Other" segment, the company operates "LIFULL Kaigo" (a search service for nursing homes and elderly care facilities), a regional revitalization business, and an accommodation business (Rakuten STAY VILLA). The company is also an equity-method affiliate in which Rakuten Group, Inc. holds an 18.57% stake. It consists of 16 consolidated subsidiaries (11 domestic, 5 overseas).

Business Model

LIFULL HOME'S employs a B2B2C model that receives listing fees and advertising fees from clients such as real estate companies and home builders. By providing free information to users, it maximizes traffic and inquiry volume, thereby enhancing the value of customer referrals to clients and improving listing unit prices and customer count (ARPA). The use of AI and generative AI to achieve high-conversion-probability referrals, along with UX/UI improvements to enhance user experience, are the main drivers of revenue growth.

Company Strengths

In FY2025 (ended September 2025), the HOME'S-related business recorded revenue of ¥25,538 million (up 6.3% year on year), segment profit of ¥4,322 million (up 61.7% year on year), and a segment profit margin of 16.9%. Optimization of advertising and operating expenses along with AI-driven operational efficiency improvements drove the substantial improvement in profit margin.

Thanks to the cumulative effect of site development initiatives continued since 2021, all indicators, including traffic and inquiry volumes, progressed steadily even amid a challenging market environment in which the number of people relocating nationwide was nearly flat (down 0.2% year on year). This demonstrates strengthened in-house competitiveness that is not dependent on the external environment.

In November 2024, the company decided on a restructuring of its overseas business, and in January 2025 it contributed all shares of LIFULL CONNECT, S.L. in kind to CONNECT NEXT PTE. LTD., classifying it as a discontinued operation. This cut off the loss risk associated with the overseas business, which had previously recorded substantial impairment losses (impairment losses of approximately ¥7,080 million or more in FY2024, ended September 2024), and completed the concentration of management resources on the domestic business.

ENVALITH's Perspective

Operating profit from continuing operations for the interim period of FY2026 (ending September 2026) was ¥2,344 million, up 28.5% year on year, progressing steadily. However, full-year operating profit guidance stands at ¥3,000 million (down 21.4% year on year), and given that ¥2,344 million has already been achieved in the interim period, this implies operating profit of only ¥656 million for the second half (April–September 2026). Compared with full-year operating profit of ¥3,815 million in the previous fiscal year, this represents a significant projected decline, and attention should be paid to the possibility that planned cost increases and expanded investment activity in the second half could weigh on earnings.

Cash flow from investing activities for the interim period was ¥-3,790 million (an improvement from ¥-9,370 million in the same period of the prior year). Property, plant and equipment increased substantially, from ¥3,184 million at the end of the previous fiscal year to ¥5,152 million, and expenditures for the settlement of asset retirement obligations (¥900 million) were also incurred. Non-current borrowings rose from ¥7,453 million to ¥8,979 million, continuing an upward trend in financial leverage. Cash and cash equivalents stood at ¥8,782 million (down from ¥10,702 million at the end of the previous fiscal year), and cash flow management amid continued growth investment is becoming a key challenge.

Dependence on external search engines remains an ongoing risk in terms of traffic volatility, and changes in real estate information search behavior driven by the rise of generative AI and AI-powered search could pose a medium- to long-term threat. Meanwhile, interim profit attributable to owners of the parent fell sharply to ¥1,544 million (down 58.5% from ¥3,723 million in the same period of the prior year), but this was due to a temporary factor: in the same period of the prior year, profit from discontinued operations (¥2,990 million), including gain on loss of control from the restructuring of overseas businesses, had been recorded. On a continuing operations basis, improvement has continued, and it is important to assess underlying performance excluding such one-off factors.

Growth Strategy

Expanding presence in the domestic housing sector through deepening of HOME'S-related businesses, utilization of AI, and promotion of M&A

Cumulative effects of site development initiatives continued since 2021 have led to steady progress across all metrics, including traffic and inquiry volumes. Through the development of new AI and generative AI-driven features, the company is achieving referrals with higher conversion probability, thereby enhancing value delivered to clients. Segment profit for the HOME'S-related business in the interim period was ¥2,591 million, a significant improvement year on year.

From the second quarter of FY2025 (ending September 2025), overseas operations were classified as discontinued operations, completing the shift of focus to core domestic businesses. As a result, profitability on a continuing-operations basis improved significantly, contributing to an improved operating margin. The interim loss from discontinued operations remained minor, at ¥(8) million.

The company acquired (¥216 million in expenditure) and sold (¥176 million in proceeds) shares of affiliated companies, recording a gain of ¥138 million on the sale of equity-method investments. The balance of equity-method investments increased to ¥362 million (from ¥197 million at the end of the previous fiscal year). Non-current assets such as investment real estate (¥5,455 million) and long-term financial assets (¥9,841 million) have also expanded, promoting revenue diversification through asset utilization.

The year-end dividend for FY2026 (ending September 2026) is planned to be calculated based on a 30% payout ratio standard (forecast of ¥5.21 per share). On February 12, 2026, the company announced the establishment of a new shareholder benefit program to enhance shareholder returns. The previous period's actual dividend (¥10.41 per share) included a temporary addition due to overseas business restructuring and a ¥1 commemorative dividend for the 30th anniversary of the company's founding; the current period's forecast of ¥5.21 per share represents the normalized dividend level going forward.

Last updated: July 17, 2026