Welby Inc. 2Q Earnings Preview

2Q to test progress toward full-year revenue plan of +130.5%, driven by expanding PHR service and PHR platform orders in new therapeutic areas

PublishedAugust 10, 2026 at 15:30 GMT+9

Summary

Welby has set an ambitious full-year plan targeting revenue of JPY 1,466M (+130.5% YoY) and an operating loss of JPY -30M, with breakeven clearly in sight. 1Q revenue came in at just JPY 133M (9.1% guidance achievement rate), meaning JPY 1,332M must be accumulated from 2Q onward to meet the full-year target. The company's revenue has historically been heavily skewed toward Q4 (averaging ~41% of full-year revenue over the past three fiscal years), so low 1Q progress is partly structural. That said, it will be critical in 2Q to confirm tangible buildup in the Disease Solutions order pipeline and early revenue contributions from the patient-facing medical information platform launching in April 2026. An additional focal point is whether the company can sustain upfront investment while simultaneously improving profitability, given its financial base of a 15.0% equity ratio and JPY 516M in cash and deposits.

Key Points for Next Quarter

Key Points & Focus	Implications
Revenue Progress2Q cumulative revenue achievement rate vs. full-year plan of JPY 1,466M	2Q cumulative revenue in the prior year was JPY 287M (45.2% achievement rate). With the plan 2.3x larger this fiscal year, reaching 2Q cumulative revenue above JPY 300M is the minimum threshold for plan attainment
Disease SolutionsNew order volume and revenue pipeline from pharmaceutical companies	1Q posted JPY 93M (+80.5%), a strong result. Key to the full-year plan is whether high growth can be sustained in 2Q, backed by demand for new drug adverse-event monitoring in oncology and ePRO evidence accumulation
My Karte ServiceRecovery of timing-deferred projects and large-deal order trends	1Q came in at JPY 40M (-41.7%) due to timing deferrals. Prior-year 2Q was a high JPY 167M; the question is whether extended order lead times from larger deal sizes begin to normalize
New Service MonetizationInitial revenue from patient-facing medical information platform	Services launching from April and July 2026 respectively. Early monetization of new services is essential to support +130.5% full-year growth
Financial SoundnessCash and deposits balance and equity ratio trends	Cash and deposits at 1Q-end were JPY 516M (down JPY 195M from prior FY-end), with equity ratio at 15.0%. If quarterly operating cash outflows continue at ~JPY 150M, the need for additional fundraising becomes a key discussion point
Capital PolicyConvertible bond conversion progress and dilution impact	JPY 60M of CBs were converted in 1Q, leaving a balance of JPY 317M. Monitoring the balance between additional dilution upon full conversion and equity base reinforcement
Alliance StrategyCommercialization progress of insurer-facing solutions	Whether partnerships with Chubu Electric Power, Suzuken, Nippon Life, NTT Docomo, and others are generating concrete revenue contributions from insurer and municipal government-facing businesses

Key Issues from Previous Results (FY12/2026 1Q Results)

1Q results showed revenue of JPY 133M (+10.7%) and an operating loss of JPY -157M, narrowing the loss by JPY 4M YoY. The full-year plan calls for revenue of JPY 1,466M (+130.5%), an unprecedented level of growth, yet the 1Q achievement rate was only 9.1%. While the company's business model structurally concentrates revenue in Q4, concrete evidence supporting rapid revenue accumulation from 2Q onward needs to be verified.

1. Sustainability of Disease Solutions Service Growth

Prior Quarter:
1Q revenue of JPY 93M (+80.5% YoY). Driven by new PHR service orders from pharmaceutical companies, with demand for new drug adverse-event monitoring in oncology also materializing
This Quarter — Key Checks:
Continuity of pharma DX demand and pipeline robustness. Specifically, whether ePRO clinical research achievements (publication in international academic journals) are translating into new deal wins
Key Metric:
Disease Solutions revenue YoY growth rate (prior-year 2Q was not disclosed on a standalone basis; whether growth of +80%+ can be sustained on a full-year basis)

2. Welby My Karte Service: Resolution of Timing Deferrals and Deal Size Expansion

Prior Quarter:
1Q revenue of JPY 40M (-41.7% YoY). Primarily attributable to extended order lead times from larger deal sizes and timing deferrals on select projects
This Quarter — Key Checks:
Whether deferred projects are booked as revenue in 2Q. Whether expansion of the user base — 33,376 affiliated primary care facilities and ~1.24M app downloads — is translating into monetization
Key Metric:
Comparison against prior-year 2Q revenue of JPY 167M (26.3% of full-year). Recovery of My Karte Service is a prerequisite for full-year plan attainment

3. Revenue Contribution from New Platform Services

Prior Quarter:
Patient-facing medical information platform launched in April 2026 (PMDA collaboration)
This Quarter — Key Checks:
Initial adoption volume and revenue scale of the new service. The extent to which new services contribute to the full-year revenue plan of +130.5% (an increase of JPY 831M vs. prior year)
Key Metric:
Revenue from new services (if the company does not disclose this, the presence or absence of revenue breakdown disclosure itself becomes a focal point)

4. Commercialization Progress of Insurer-Facing Solutions

Prior Quarter:
Subsidiary Welby Healthcare Solutions is advancing commercialization of solutions for insurers (health insurance associations and municipal governments). Participation of multiple health insurance associations and municipalities has been confirmed. A severe-disease prevention program leveraging Abbott Japan's FreeStyle Libre has also been launched
This Quarter — Key Checks:
Concrete revenue contributions from new partnerships, including the health screening DX collaboration with WEMEX (announced June 2026). Whether insurer-facing business is beginning to function as recurring revenue
Key Metric:
Growth pace in contracted insurer count and disclosure of insurer-facing revenue

5. Financial Base and Cash Runway Sustainability

Prior Quarter:
Cash and deposits of JPY 516M (down JPY 195M from prior FY-end), equity ratio of 15.0% (vs. 20.9% at prior FY-end). CB balance of JPY 317M (JPY 60M of CBs converted to equity in 1Q, with capital and capital surplus each increasing by JPY 30M). Upfront investment of JPY 35M
This Quarter — Key Checks:
Improvement trend in quarterly operating cash flow and pace of cash drawdown. Whether losses begin narrowing in 2Q toward achieving the full-year operating loss plan of JPY -30M
Key Metric:
2Q-end cash and deposits balance (per our estimate, if cash outflows continue at 1Q levels, balance could decline to approximately JPY 320M by 2Q-end); equity ratio trajectory

Timely Disclosure & Industry Trends

2026/06/03
Welby Group and WEMEX launch collaboration in health screening DX for insurers — Integrating Welby's "deemed health screening" into WEMEX's "health screening outsourcing" service (WEMEX is a subsidiary of PHC Holdings), targeting the hard-to-reach population of specific health screening non-participants. A strategic partnership directly reinforcing the revenue base of the insurer-facing business. Welby Group and WEMEX Launch New Collaboration in Insurer-Facing Business
2026/05/15
Clinical efficacy of cancer patient monitoring using ePRO from Welby My Karte ONC and other products published in an international academic journal — Statistically significant survival benefit demonstrated in the ePRO group, potentially contributing to order expansion for Disease Solutions as evidence supporting deployment to pharmaceutical companies and medical institutions in oncology. Clinical Efficacy of Cancer Patient Monitoring Using ePRO from Welby My Karte ONC Published in International Academic Journal

Previous Quarter Results (FY12/2026 1Q Actuals)

Welby operates a PHR (Personal Health Record) platform business under its mission to "Empower the Patients." The business consists of two pillars: Disease Solutions (PSP and ePRO) for pharmaceutical companies, and Welby My Karte Service for medical institutions and insurers. The company has a user base of 33,376 affiliated primary care facilities and ~1.24M app downloads. The full-year plan targets revenue of JPY 1,466M (+130.5%) and an operating loss of JPY -30M, an ambitious set of goals aimed at reaching breakeven through accelerated PHR platform monetization. In 1Q, Disease Solutions led with +80.5% growth, but timing deferrals in My Karte limited overall revenue growth to +10.7%.

Item	Amount	YoY	vs. Guidance	Notes
Revenue	JPY 133M	+10.7%	9.1% Achievement Rate	Disease Solutions +80.5%, My Karte -41.7%
Operating Income	JPY -157M	-	-	Includes JPY 35M of upfront investment
Recurring Profit	JPY -157M	-	-	Interest expense increased by JPY 0M
Net Income	JPY -153M	-	-	Improved from JPY -167M in prior-year period
EPS	JPY -18.41	-	-	Prior-year period: JPY -20.27

Guidance Achievement Rate vs. Full-Year Plan: Revenue at 9.1% (prior-year period: 18.9%). However, the average Q1 revenue share over the past three fiscal years was 18.9%, and the low progress must be viewed in the context of a full-year plan premised on +130.5% growth. Operating income stands at JPY -157M in 1Q against a full-year plan of JPY -30M, making rapid P&L improvement from 2Q onward essential.

Welby Inc.