ENVALITH
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Broadleaf Co., Ltd.

3673・Prime Market・Information & Communication

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株式会社ブロードリーフ logo
Broadleaf Co., Ltd.3673

Business

Broadleaf Co., Ltd. is an IT services company that provides cloud services (.c Series) and package systems on the Broadleaf Cloud Platform, primarily serving mobility industry customers such as auto repair shops, sheet metal shops, parts dealers, and glass dealers. The company traces its origins to a package software business for the automotive industry started by Tsubasa System in 1983, and possesses over 40 years of industry-specialized data and customer base. Currently, under its medium-term management plan (2022-2028), the company is systematically promoting the migration of existing package customers to the cloud while also expanding into new industries such as machine tools, travel, and mobile phone sales agencies. Revenue for FY2025 (ending December 2025) was ¥20,815 million, and the company operates under the IT Services Business (Single Segment).

Business Model

The company builds up monthly recurring revenue by systematically migrating existing Package System customers to the .c Series cloud service. Revenue is composed of three categories: Cloud Service (Software Service + Marketplace), Package System (software sales + operation/support), and Other (hardware/supplies). In FY2025 (ending December 2025), Cloud Service revenue was ¥11,832 million (up 44.1% year on year), accounting for 56.8% of total revenue, as the shift toward a subscription-based model gains momentum.

Company Strengths

The proprietary data on vehicles, parts, repairs, and inspections accumulated since 1983 corresponds to approximately one-quarter of domestic vehicle maintenance data, forming a barrier to entry that competitors cannot easily replicate. This data asset serves as the foundation for AI-driven services and new platform development.

In the fiscal year ended December 2025, the user retention rate for the .c Series remained in the upper 99% range. High switching costs as a core operational system, combined with a support structure featuring a 365-day call center and specialized staff at nationwide locations, underpin this customer retention.

In the fiscal year ended December 2025, revenue reached ¥20,815 million (103.6% of target), operating profit reached ¥2,063 million (137.5% of target), and profit for the period reached ¥1,240 million (124.0% of target), surpassing the plan across all KPIs. Operating profit increased significantly, up 206.0% year on year.

ENVALITH's Perspective

Operating profit of ¥853 million in Q1 FY2026 (ending December 2026) corresponds to 17.8% of the full-year forecast of ¥4,800 million. While the company maintains its full-year and interim forecasts, the rapid improvement in revenue operating margin to 15.5% (+8.1pt year-on-year) suggests that fixed-cost leverage may be working better than expected. Whether the 36.5% year-on-year growth rate in cloud service revenue can be sustained will be key to achieving the full-year forecast.

Cash flow from investing activities in Q1 FY2026 (ending December 2026) was negative ¥1,120 million, the majority of which (¥1,111 million) was for the acquisition of intangible assets (such as cloud software feature additions). Operating CF improved significantly to ¥1,242 million, up 268.3% year-on-year, but after deducting investment expenditures, free cash flow remained at around ¥122 million. Development investment aimed at completing the cloud transition is expected to continue for the time being, and the full-scale realization of FCF generation capability may not occur until 2028 or later.

In terms of market environment, the expansion of corporate DX promotion and AI utilization demand is boosting growth in the domestic IT services market, working favorably for the company's cloud transition strategy. On the other hand, as the company itself notes, concerns over exchange rate fluctuations, price increases, and rising interest rates stemming from US trade policy trends and Middle East tensions are heightening uncertainty about the economic outlook, and this warrants close attention as a risk that could affect customer companies' IT investment decisions. Achieving the full-year forecast for FY2026 (ending December 2026) (revenue of ¥23,500 million, up 12.9% year-on-year) is premised on stability in the external environment.

Growth Strategy

Aiming for revenue of ¥32,000 million and operating profit of ¥13,000 million in 2028 through 'cloud penetration' and 'service expansion'

By systematically migrating customers using package software to the cloud software '.c Series', the company aims to build up subscription revenue. This migration acts as a factor increasing overall revenue while shifting the composition ratio between cloud service revenue and package system revenue, and cloud service revenue in Q1 of FY2026 (ending December 2026) achieved a year-on-year increase of 36.5%.

Continuously improving the functionality and convenience of the ordering platform, which serves as the foundation of the inter-company network, to strengthen its position as infrastructure for the mobility industry. By expanding seamless integration with various operational systems and social infrastructure systems, the company aims to increase the added value of the platform and expand fee revenue.

Actively incorporating generative AI into sales activities, development, and administrative operations to promote cost optimization. The company aims to accelerate improvement in operating margin while absorbing increases in depreciation expenses and IT infrastructure costs associated with adding functions to cloud software. In Q1 of FY2026 (ending December 2026), the operating margin on revenue reached 15.5% (up 8.1pt year-on-year).

Last updated: July 17, 2026