ENVALITH
株式会社Smile Holdings logo

Smile Holdings Inc.

7084・Growth Market・Services

Official website
株式会社Smile Holdings logo
Smile Holdings Inc.7084

Business

Smile Holdings, Inc. is a childcare and early childhood education company that, since commencing operations in 2009, has operated a total of 83 facilities—70 licensed childcare centers and 13 unlicensed childcare facilities—primarily in Tokyo, Kanagawa Prefecture, and Aichi Prefecture. Centered on the cultivation of non-cognitive skills through its proprietary educational program "KID'S PREP. PROGRAM" combined with globally recognized educational methods such as Montessori and Reggio Emilia, the company has expanded its operations into four segments: domestic education, international education, postpartum care, and family support. Its main customers are dual-income households and affluent families in the greater Tokyo metropolitan area. In May 2026, the company made WITH Holdings (96 childcare-related facilities and 4 elderly care facilities) a wholly owned subsidiary, substantially expanding the scale of the group.

Business Model

The core of revenue consists of facility-based benefit payments (statutory proxy receipt) from national and local governments for 70 licensed daycare facilities, with high occupancy exceeding 4,100 enrolled children underpinning stable earnings. In addition, unlicensed pre-schools, Global School, and after-school programs collect high-unit-price usage fees through direct contracts with guardians. The structure aims to diversify revenue while reducing reliance on subsidies through new segments such as postpartum care hotels, architectural design, and overseas study support.

Company Strengths

As of the end of March 2026, the company operated 70 licensed childcare facilities (63 in Tokyo, 5 in Kanagawa Prefecture, and 2 in Aichi Prefecture), with 4,100 enrolled children. The licensed childcare business, whose main revenue source is facility-based benefit payments, has institutionally guaranteed income, and the continuous improvement in occupancy rate—up 14% over four years from 3,596 children at the end of March 2022—underpins revenue stability.

With the new opening at Azabudai Hills (December 2025) and the expansion of three Global School & Overseas Study Support (International Education Segment) schools in Kinshicho, Kichijoji, and Center Kita, revenue in the International Education Segment reached ¥269 million, up 103.7% year on year. The company has maintained high occupancy rates through distinctive events such as facility tours with tasting sessions and kabuki theater outings, establishing its position as a premium education brand targeting affluent households.

In May 2026, the company made WITH Holdings, which operates 96 childcare-related facilities and 4 elderly care facilities, a wholly owned subsidiary (funding the acquisition of ¥16,765 million through borrowing from MUFG Bank). Through this transaction, the company acquired previously untapped areas at once, including school meal services, childcare staffing placement, therapeutic education, and public after-school programs, simultaneously achieving scale benefits and diversification of its business portfolio.

ENVALITH's Perspective

For FY2026 (ending March 2026), operating profit was ¥370 million (down 9.9% year on year) and ordinary profit was ¥350 million (down 15.1% year on year), representing a decline on the surface. However, excluding one-time expenses of ¥352 million associated with the acquisition of WITH Holdings shares, adjusted operating profit was ¥664 million (up 61.8% year on year) and adjusted ordinary profit was ¥703 million (up 70.1% year on year), showing a substantial increase. The recognition of deferred tax assets (income tax adjustment of ¥56 million) also contributed, and net income for the period was ¥220 million (up 45.6% year on year), securing an increase in profit. The underlying strength of existing businesses is steadily improving, making it important to evaluate profitability excluding one-time expenses.

In connection with the acquisition of WITH Holdings, the company borrowed ¥16,765 million from MUFG Bank (executed on May 8, 2026, one-year term, variable interest rate). Short-term borrowings surged from ¥2,600 million in the previous period to ¥4,837 million, and the equity ratio declined from 42.7% to 36.8%. The amount of goodwill has not yet been finalized. The consolidated earnings forecast for FY2027 (ending March 2027) is stated as "undetermined," with the timing and scale of integration effects and the goodwill amortization burden constituting the main sources of uncertainty regarding the earnings outlook. As an external factor, attention should also be paid to the risk of increased borrowing costs amid rising interest rates.

The Global School & Overseas Study Support (International Education Segment) achieved rapid growth, with sales of ¥269 million in FY2026 (ending March 2026) (up 103.7% year on year), but this remains only 1.9% of consolidated sales. The postpartum care hotel "Villa Mom Tokyo Ariake" is scheduled to open in June 2026, with zero revenue recognized in the current period. The Architectural Design Business (Family Support Segment), which began in August 2025, recorded sales of ¥92 million. As an external factor, the ongoing decline in the birthrate poses a structural headwind for securing enrollment at the Licensed Childcare Group (Domestic Education Segment) over the medium to long term, while the increase in dual-income households and policy support for addressing childcare waiting lists continue to provide a tailwind. Whether new businesses can offset the structural risks of existing businesses will be a key criterion for medium- to long-term evaluation.

Growth Strategy

Pursuing scale expansion through the integration of WITH Holdings while concurrently driving monetization of new segments such as international education and postpartum care

Completed full consolidation as a wholly-owned subsidiary on May 8, 2026, at an acquisition cost of ¥12,141 million. Incorporating 96 childcare-related facilities, 4 nursing care facilities, catering operations, and other businesses to stabilize existing operations and strengthen the earnings base through scale benefits and shared operational know-how. The consolidated earnings forecast for FY2027 (ending March 2027) is undetermined at this time.

Opened "Kids Garden Prep School Azabudai Hills" and "Kids Garden Education Lab Azabudai Hills" at Azabudai Hills on December 1, 2025. The number of enrolled children is tracking in line with initial expectations, confirming a smooth start. The company aims to continue maintaining and improving high occupancy rates.

Achieved net sales of ¥269 million (up 103.7% year on year) in FY2026 (ending March 2026) in the International Education Segment, supported by bilingual education demand at the three Global School locations (Kinshicho, Kichijoji, and Center Kita). Through a business alliance with Hawaii Palms English School and acquisition of a Type 1 Travel Agency registration (Registration No. 2182), the company has expanded overseas study support services to the general public.

"Villa Mom Tokyo Ariake" is scheduled to open in June 2026 as a stay-in postpartum care service. Leveraging experience from operating more than 80 childcare facilities, the company aims to establish it as a new revenue source providing physical and mental care as well as childcare support for postpartum mothers. There was no revenue contribution in the current fiscal year, FY2026 (ending March 2026).

The Architectural Design Business, launched in August 2025, recorded net sales of ¥92 million in FY2026 (ending March 2026). Building on 16 years and more than 80 childcare facilities' worth of design and operational experience, the company continues to expand the business by providing design and construction solutions for "spaces where families gather," such as clinics, dental clinics, airports, and restaurants.

Last updated: July 19, 2026