Smile Holdings Inc.
7084・Growth Market・Services
Early Childhood Education Business (Single Segment)
Single-segment business specializing in childcare and early childhood education, operating 83 facilities in the Greater Tokyo and Tokai areas
| Period | Current | Previous | Change |
|---|---|---|---|
| Revenue | ¥14,517 million | ¥13,656 million | ↑ |
| Operating income | ¥370 million | ¥410 million | ↓ |
| EBITDA | ¥1,108 million | ¥1,171 million | ↓ |
| Ordinary income | ¥350 million | ¥413 million | ↓ |
| Profit attributable to owners of parent | ¥220 million | ¥151 million | ↑ |
| Operating income excluding M&A-related expenses (adjusted) | ¥664 million | ¥410 million | ↑ |
| EBITDA excluding M&A-related expenses (adjusted) | ¥1,402 million | ¥1,171 million | ↑ |
| Number of facilities operated | 83 facilities | 80 facilities | ↑ |
| Total assets | ¥16,701 million | ¥15,222 million | ↑ |
| Equity ratio | 36.8% | 42.7% | ↓ |
| Earnings per share | ¥68.42 | ¥46.99 | ↑ |
| Annual dividend per share | ¥95.00 | ¥95.00 | — |
Business Details
The Smile Holdings Co., Ltd. group is a single-segment company operating 70 licensed childcare centers (Tokyo, Kanagawa Prefecture, and Aichi Prefecture) and 13 facilities including preschool-integrated childcare centers, early childhood classrooms, after-school programs, and swimming schools (Tokyo), for a total of 83 facilities. Licensed childcare centers derive their main revenue from facility-based benefit payments, while unlicensed facilities are operated on fees paid by guardians. The company has reorganized its business into four segments—Domestic Education, International Education, Postpartum Care, and Family Support—and is pursuing expansion into comprehensive personal care services.
Recent Overview
Acquisition of WITH Holdings Co., Ltd. as a subsidiary (acquisition cost of ¥12,141 million) significantly expanded the number of facilities; earnings forecast for FY2027 (ending March 2027) yet to be determined
On May 8, 2026, the company acquired all shares of WITH Holdings Co., Ltd. for an acquisition cost of ¥12,141 million, making it a wholly owned subsidiary. The WITH Holdings group operates 96 childcare-related facilities and 4 nursing care facilities in Tokyo, Saitama Prefecture, and Kanagawa Prefecture, and also provides related services such as meal provision, childcare staff placement, and educational programs. Due to the recording of ¥352 million in M&A-related expenses during the period, reported operating income declined 9.9% year on year to ¥370 million, but adjusted operating income excluding these expenses was ¥664 million (up 61.8% year on year). The company executed a borrowing of ¥16,765 million from MUFG Bank. As the share acquisition occurred only recently, the consolidated earnings forecast for FY2027 (ending March 2027) has not yet been determined.
Key Products
Growth Drivers
- Creation of scale merit and significant expansion of consolidated results through making WITH Holdings (96 childcare-related facilities and 4 nursing care facilities) a wholly owned subsidiary
- Stable facility-based benefit payment revenue through maintaining high occupancy rates at the Licensed Childcare Group (revenue of ¥12,468 million in FY2026 (ending March 2026), up 5.3% year on year)
- Steady buildup of enrolled child numbers following the new opening of the Premium Education Group's Azabudai Hills facility (December 2025)
- Rapid growth in the International Education Segment (revenue of ¥269 million in FY2026 (ending March 2026), up 103.7% year on year) and improved occupancy rates at the three Global School facilities
- Geographic expansion of overseas study support (UK, Switzerland, Hawaii, Australia, and Malaysia) and expansion to the general public through travel agency registration
- Establishment of a new revenue source through the June 2026 opening of the postpartum care hotel "Villa Mom Tokyo Ariake"
- Diversification of the revenue base through expansion of the Architectural Design Business (Family Support Segment)
- Expansion of the business portfolio into new areas including nursing care, public after-school programs, and therapeutic education businesses (via WITH Holdings)
Risks
- Risk of increased financial leverage due to the large-scale borrowing of ¥16,765 million associated with the acquisition of WITH Holdings (equity ratio declined from 42.7% to 36.8%, with further decline expected)
- As the amount of goodwill has not yet been finalized, the scale of potential future impairment risk is currently unknown
- Risk of market saturation for licensed childcare centers due to declining birthrate (no new licensed childcare center openings currently planned)
- Risk of changes in national and local government subsidy policies and systems (the majority of licensed childcare center revenue depends on facility-based benefit payments)
- Risk of difficulty securing specialized personnel such as childcare workers and rising labor costs (personnel scale will expand significantly following integration with WITH Holdings)
- Risk of short-term profit pressure from upfront investment in new businesses such as postpartum care facilities
- Risk of delays in sharing operational know-how and realizing synergies in the integration process with WITH Holdings
- Risk of delay in providing earnings outlook to investors due to the earnings forecast for FY2027 (ending March 2027) being undetermined
Last updated: June 26, 2026