Mid-term plan targets within reach one year ahead of schedule; JPY 300–400M in upfront investment for full year to launch full-scale PDG cycle and overhaul data infrastructure

Summary

ENVALITH had the opportunity to attend the company's earnings briefing held on April 28 at 17:00. H1 cumulative revenue reached JPY 2,812M (+37.2% YoY), with operating income of JPY 568M (+117.2% YoY), surpassing the full-year plan on profit metrics in just the first half. Large-scale projects in the home appliance and gadget category drove monthly project unit price up to JPY 1.63M (+17.8% YoY). Management explicitly stated that mid-term plan targets (revenue JPY 5.2B / operating income JPY 700M) are now largely achievable this fiscal year, and accordingly revised full-year guidance upward. To accelerate growth from FY09/2027 onward, the company plans to fully execute JPY 300–400M in upfront investment over the full year, centered on data infrastructure reconstruction, new feature development, PDG cycle expansion, and organizational development.

Key Points (Earnings Takeaways and Growth Initiatives)

• Management Strategy And Market Assessment
  • Prolonged yen weakness and elevated raw material costs are accelerating demand among SMEs for higher value-added products, sustaining strong listing demand on Makuake
  • Despite inflationary pressure, consumers are increasingly selective in spending, with robust appetite for products that deliver genuine satisfaction
  • Management explicitly stated the ambition to become the primary distribution player in the AI home appliance and AI gadget space; total crowdfunding purchases for AI-related products grew 3.5x vs. 2024
• Near-Term Business Progress And Drivers
  • Monthly active project count swung from negative YoY in Q1 to +2.8% YoY in Q2, driven by strong new acquisition
  • Growth in ad placement agency revenue contributed to maintaining the 29.1% take rate, while the company continued to restrain its own advertising spend
  • The CEO clarified that Q1's monthly unit price of JPY 1.77M partly reflected a temporary spike from large-scale projects; Q2's JPY 1.63M is closer to a normalized run-rate
• Strategic Initiatives And Inflection Points
  • Systematic reconstruction of data infrastructure underway, aimed at accelerating development velocity for AI personalization and related capabilities
  • Partnered with Nojima to open Makuake corners at two stores in the Tokyo metro area, developing physical retail experience and sales channels
  • Nishikawa's "punitoro" marks a realized P-D collaboration between Makuake Insight and the core Makuake platform, building a track record of PDG cycle case studies
  • Starting with this session, earnings briefings shifted to a fully open format, reinforcing the company's fair disclosure commitment

Outlook And Strategy

• Full-year guidance revised upward: revenue JPY 5,400M (+13.4% vs. initial forecast), operating income JPY 670–800M (+67.5% to +100.0% vs. initial), both projected to be all-time highs since founding
• Revenue forecast is based on underlying organic run-rate excluding unpredictable upside from mega-projects; profit is disclosed as a range to account for upside optionality and flexible execution of upfront investment
• Mid-term plan through FY09/2027 has largely reached achievable levels; the plan will be revised based on this fiscal year's full-year results, with a new mid-term plan to be disclosed at the FY09/2026 earnings announcement
• Investment in development, headcount, and promotional activities to accelerate toward full-scale rollout of the PDG cycle (Plan: Insight, Debut: Makuake, Growth: STORE)
• The core Makuake platform is over 10 years old; new feature additions had been deprioritized in favor of operational stability, but strong earnings performance is now enabling a transition to a feature expansion phase
• Security enhancement investment to be implemented on an ongoing basis rather than as one-off expenditures

Positive Factors

• Operating income at 142.1% of full-year guidance achievement rate; profit levels already exceeded full-year targets in just the first half
• Total crowdfunding purchases for AI-related products surged 3.5x vs. 2024, with cumulative home appliance and gadget supporters surpassing 430K, demonstrating pronounced demand expansion
• Take rate maintained at a high 29.1%, with ad placement agency growth forming a positive revenue cycle across the platform
• Access UU reached 10,198,495 (+28.4% YoY), and registered members hit 3,448,294 (+12.1% YoY), expanding the user base
• Headcount increased to 158 at Q2-end (from 150 at Q1-end), with hiring focused on curators and senior-level talent, strengthening organizational capabilities
• Despite elevated geopolitical risk, business impact in Q2 remained limited, confirming operational resilience

Concerns And Risks

• Gross profit margin at 73.3% (down from 82.0% in Q1 FY09/2023, trending lower); the CEO indicated further potential declines during the Makuake STORE expansion phase
• Repeat crowdfunding purchase rate declined to 70.7% (down 2.6pp YoY from 73.3%), and project creator repeat rate also fell to 59.3% (down 2.4pp YoY from 61.8%); the impact of retention-strengthening initiatives is not expected until next fiscal year onward
• JPY 300–400M in upfront investment for the full year is expected to compress quarterly operating income from Q3 onward, pressuring margins in the near term
• Continued uncertainty from tariffs, FX, and the broader international environment; gadget-related products have high dependency on globally sourced components
• New project listings at 1,224 (−0.8% YoY), essentially flat; scaling project volume remains a challenge
• Dividend policy remains undetermined for the time being, with continued prioritization of retained earnings

Performance Highlights

H1 cumulative revenue reached JPY 2,812M (+37.2% YoY), with operating income of JPY 568M (+117.2% YoY), achieving both top- and bottom-line growth. On a standalone Q2 basis, revenue grew +26.1% and operating income +45.3%, sustaining strong momentum and prompting an upward revision to full-year guidance.

Consolidated Earnings Summary

Segment Breakdown

Single-segment company; no segment-level disclosure provided.

• GMV (Q2 standalone): JPY 5,107M (+22.5% YoY)
• Monthly Active Project Count: 1,005 (+2.8% YoY)
• Monthly Project Unit Price: JPY 1.63M (+17.8% YoY)
• Take Rate: 29.1% (vs. 28.2% prior year)
• Access UU: 10,198,495 (+28.4% YoY)
• Registered Members: 3,448,294 (+12.1% YoY)
• Crowdfunding Purchase Transactions: 299,206 (+9.2% YoY)