Japan Living Warranty Inc.

Business Details

Targeting housing companies such as house builders and condominium developers as primary customers, the segment provides the SAaaS method, which combines long-term warranty services for housing equipment and building structures with inspection & repair, digital marketing, and electronic money (embedded finance). It supports housing companies in strengthening their flow business and creating stock business. For the cumulative nine months of FY2026 (ending March 2026, i.e. through Q3), sales were ¥3,100 million (up 15.8% year-on-year) and segment profit was ¥1,286 million (up 30.1% year-on-year), maintaining steady growth and continuing to drive overall group earnings.

Recent Overview

New contract acquisition value accelerated to up 29.0% year-on-year, while unearned revenue balance continued to build, up 22.6%

During the cumulative nine months of FY2026 (ending March 2026), the company focused on acquiring long-term warranty contracts for housing equipment and buildings, while also promoting acquisition in new warranty categories such as earthquake warranty and ground compensation. New contract acquisition value for the single quarter of Q3 rose sharply to ¥2,046 million (152.8% of the same period prior year). Warranty service sales accelerated, up 25.7% year-on-year to ¥1,014 million. The number of companies adopting electronic money expanded steadily to 167 (up 14.4% year-on-year), with an unused balance of ¥2,866 million (up 11.7%). Segment profit margin also improved to 41.5% from 36.9% in the same period prior year.

Key Products

Growth Drivers

• Continued acquisition of new long-term warranty contracts driving the buildup of unearned revenue balance (¥16,352 million at end of Q3 FY2026, up 22.6% year-on-year)
• Expansion of contract acquisition value through development of new warranty categories such as earthquake warranty and ground compensation (new contract acquisition value for the single Q3 quarter was 152.8% of the same period prior year)
• Expansion of embedded finance revenue driven by increase in the number of companies adopting electronic money (Ouchi Point) (167 companies, up 14.4% year-on-year)
• Rising demand for digital products (apps, chatbots, etc.) against the backdrop of delayed DX in the housing and real estate industry
• Expanding demand for stock business consulting amid growing interest among housing companies in the existing housing market
• Improved profitability (higher segment profit margin) driven by promotion of internal business DX

Risks

• Risk of flow business contraction due to the long-term declining trend in new housing starts in Japan
• Risk that deficiencies in IT general controls could affect financial figures, as calculations of warranty service sales and unearned revenue depend on IT systems
• Risk of rising cost ratio due to increased repair costs (higher insurance premiums and sales commissions) associated with housing equipment warranties
• Risk of warranty losses arising if repair costs during the warranty period exceed expectations (a similar case occurred in the same period prior year, when the ExtendTech Business recorded a warranty loss of ¥937 million)
• Risk of rising SG&A expenses due to increased hiring and training costs (accelerated hiring of digital planning and development personnel)
• Potential impact on revenue composition if the declining trend in inspection & repair service sales (83.1% of the same period prior year) continues