Broadleaf Co., Ltd.

Business Details

A single segment providing cloud services (.c Series) and package systems mainly to businesses in the mobility industry (automobile maintenance, body repair, parts dealers, etc.), as well as to businesses handling machine tools, travel, and mobile phone sales agencies. Built on the Broadleaf Cloud Platform, the segment is expanding the value it provides from operational efficiency improvement to support for management and business reform. It is advancing the growth strategies of "cloud penetration" and "service expansion" under the medium-term management plan (2022-2028), progressing toward a full-scale shift to a subscription-based revenue model.

Recent Overview

In Q1 FY2026 (ending March 2026), revenue increased 15.9% and operating profit surged 141.8%

In the first quarter of FY2026 (ending March 2026) (January to March 2026), cloud service revenue served as the growth driver, increasing 36.5% year on year to ¥3,398 million, and revenue reached ¥5,516 million (up 15.9% year on year). In a business model with a high fixed-cost ratio, the effect of revenue growth flowed directly through to profit, with operating profit reaching ¥853 million (up 141.8% year on year) and the operating profit margin sharply improving to 15.5% (up 8.1 percentage points year on year). Cost optimization through the use of generative AI to improve operational efficiency also contributed. The full-year earnings forecast remains unchanged, maintaining revenue of ¥23,500 million and operating profit of ¥4,800 million.

Key Products

Growth Drivers

• Accumulation of subscription revenue through the planned switchover of existing package customers to the .c Series (revenue growth from this factor expected to continue through the planned completion in 2028)
• Expansion of cloud service revenue driven by an increase in the number of cloud software customers (up 36.5% year on year in Q1 FY2026, ending March 2026)
• Operating leverage effect from revenue growth in a business model with a high fixed-cost ratio (revenue-to-operating-profit margin rose 8.1 percentage points year on year to 15.5%)
• Cost optimization and profitability improvement through efficiency gains in sales, development, and administrative operations using generative AI
• Increase in other revenue by capturing demand for PC and other equipment renewal associated with the cloud software switchover (up 16.6% year on year in Q1 FY2026, ending March 2026)
• Maintaining and improving customer satisfaction and retention rates through the addition of features aimed at enhancing the added value of cloud software

Risks

• Continued decline in package system revenue (down 16.1% year on year in Q1 FY2026, ending March 2026, as the cloud switchover progresses)
• Cost increase pressure from rising depreciation expenses and IT infrastructure costs associated with the addition of features to cloud software (capital expenditure on intangible assets in Q1 FY2026, ending March 2026, was ¥1,111 million)
• Risk of changes in customers' business environment due to structural changes in the mobility industry (electrification, autonomous driving, etc.)
• Macroeconomic risks such as exchange rate fluctuations, price increases, and rising interest rates against the backdrop of U.S. trade policy trends and escalating tensions in the Middle East
• Internal risk factors such as system trouble, information management, intellectual property protection, and personnel recruitment and development