Global Kids Company Corp.

Business Details

The Global Kids Company Group operates licensed nursery schools, certified nursery schools, after-school clubs, children's centers, and similar facilities, primarily in the greater Tokyo metropolitan area. In July 2025, the company made Associe Academy and Associe International wholly owned subsidiaries, and their results have been reflected in consolidated earnings from the current interim period. Revenue consists of facility-based benefits (commissioned fees and subsidies) from national and local governments and childcare fees paid by parents. The company is composed of the single segment of "Childcare Support Business."

Recent Overview

Interim operating profit rose 142.8% year on year on the Associe consolidation effect and earnings improvements

In the interim period of FY2026 (ending September 2026) (October 2025 to March 2026), the newly consolidated contributions from Associe Academy and Associe International, combined with the accumulation of childcare service promotion business subsidies, reduced recruitment costs, improved personnel cost ratio, decreased ICT expenses (following the completion of the investment cycle), and improved profitability of the photo sales service, resulted in significant earnings growth: net sales of ¥16,868 million (up 20.7% year on year), operating profit of ¥724 million (up 142.8% year on year), and EBITDA of ¥1,197 million (up 67.8% year on year). There is no change to the full-year earnings forecast (net sales of ¥33,000 million, operating profit of ¥1,200 million). As a subsequent event, effective April 1, 2026, the company transferred two licensed nursery schools (in Funabashi City and Chiba Prefecture) free of charge and one small-scale nursery facility (in Yokohama City) for ¥24 million (excluding tax) to the social welfare corporation Sukusuku Doronko no Kai. On the financial side, short-term borrowings increased by a net ¥4,119 million, and the equity ratio declined from 38.4% to 33.1%.

Key Products

Growth Drivers

• Expansion of facility count and sales scale through the full consolidation of Associe Academy and Associe International as wholly owned subsidiaries (reflected in consolidated earnings from the interim period of FY2026 (ending September 2026))
• Earnings uplift from the accumulation of childcare service promotion business subsidies
• Improved profit margin through reduced recruitment costs and improved personnel cost ratio
• Improvement in the SG&A expense ratio following the completion of the ICT investment cycle, and improved profitability of the photo sales service
• Expansion of government childcare support policies, including the nationwide full-scale implementation of the "Childcare Access Program for All Children" (Kodomo Daredemo Tsuen Seido) in April 2026
• Boost to childcare demand from Tokyo's own free childcare fee policy for first children aged 0-2 (started September 2025)
• Demand advantage in the greater Tokyo metropolitan area, where Tokyo's birth rate rose for the first time in nine years (up 1.3% year on year to 88,518 births)
• Continuation of the scale-expansion strategy through M&A centered on Tokyo and Yokohama City
• Revenue diversification through ancillary childcare businesses such as extracurricular lesson classes (GlobalKids Plus+) and gymnastics programs

Risks

• Risk of a mid- to long-term decline in enrolled children due to the ongoing decline in the birth rate (preliminary 2025 national births of 705,809, down 2.1% year on year)
• Risk of declining enrollment rates associated with the decrease in the number of children on waiting lists (2,254 nationwide, down 313 year on year)
• Risk of recruitment difficulties and rising labor costs due to a shortage of nursery school teachers
• Risk of changes to national and local government subsidy and official pricing policies (since the majority of sales depend on public benefit payments)
• Risk of rising interest rates and liquidity pressure associated with the substantial increase in short-term borrowings (from ¥550 million to ¥4,669 million)
• Impact on financial soundness from the decline in the equity ratio (from 38.4% to 33.1%)
• Post-M&A integration risk (integration and monetization of Associe Academy and others)
• Impact on the future number of facilities and sales resulting from the facility transfers (three facilities in total) implemented as a subsequent event
• Risk of impairment of fixed assets (the company recorded an impairment loss of ¥605 million in the prior fiscal year)