STEP CO.,LTD.
9795・Prime Market・Services
Business
STEP Co., Ltd. was founded in 1975 and is a company specializing in cram schools (juku) focused exclusively on Kanagawa Prefecture. Its core offerings are high school and university entrance exam preparation courses for students from 5th grade through 3rd year of high school, alongside after-school childcare (STEP Kids) and childcare operations. As of the end of FY2024 (ending September 2024), the company operated a total of 166 schools (145 in the elementary/junior high school division, 15 in the high school division, etc.), with enrollment reaching 35,543 students. The company maintains in-house production of teaching materials and its own printing operations, thoroughly internalizing lesson quality control. By continuously maintaining the No.1 track record in admissions to Kanagawa Prefecture's top public high schools and prestigious universities, the company achieves student recruitment through word-of-mouth and reputation while keeping advertising expenses to just 0.77% of net sales.
Business Model
Revenue is composed mainly of tuition income from the elementary/junior-high school student segment (net sales of ¥11,975 million) and the high school student segment (net sales of ¥3,123 million). The company has a stock-type revenue structure in which increases in student numbers translate directly into sales. A virtuous cycle is functioning whereby improved exam pass results lead to increased enrollment through word of mouth, which raises class occupancy rates and drives the addition of classes and the opening of new schools; this has enabled the company to achieve an operating margin of 23.3% while keeping advertising expenses to an absolute minimum.
Company Strengths
In spring 2024, Step ranked No.1 by cram school in the number of successful examinees at 7 of the 8 designated Kanagawa Prefecture schools for enhancing academic achievement and university advancement. Of the 2,595 total successful examinees across the 8 designated schools, 50.9% were Step students. At Tokyo Gakugei University Senior High School, Step recorded the top number of successful examinees among all cram schools for 16 consecutive years, demonstrating its brand strength in concrete numbers.
The ratio of advertising expenses to sales is extremely low at 0.77%. In the high school division, the company conducts no recruitment advertising such as flyer inserts, and many schools reach full enrollment from first-year high school students who are promotions from the elementary and junior high school division. The reputation backed by its track record of successful examinees significantly reduces customer acquisition costs.
As of the end of FY2024 (ending September 2024), against total assets of ¥29,260 million, net assets stood at ¥26,236 million, for an equity ratio of 89.7%. The company has the financial strength to fund capital expenditures and school site acquisitions with its own funds, and increased net assets by ¥300 million year on year while simultaneously carrying out ¥1,000 million in treasury stock buybacks and ¥1,380 million in dividend payments.
ENVALITH's Perspective
Performance Trend
Revenue increased 21.6% over five periods, from ¥13,036 million in FY2021 to ¥15,847 million in FY2025. For the interim period of FY2026 (ending September 2026), revenue was ¥8,356 million (up 2.4% year on year), with both the elementary/junior-high segment at ¥6,581 million (up 2.4% year on year) and the high school segment at ¥1,775 million (up 2.6% year on year) performing steadily. Operating profit was ¥2,380 million (up 1.2% year on year), maintaining growth, though the rate of profit growth fell below the rate of revenue growth due to an increase in selling, general and administrative expenses. The full-year forecast remains unchanged at revenue of ¥16,494 million (up 4.1% year on year) and operating profit of ¥3,942 million (up 4.3% year on year). The average number of students during the period increased 2.6% year on year, indicating steady demand. On the external environment front, a decline in the birthrate has caused some stagnation in student numbers in the western and central areas of the prefecture, but this has been offset by strong performance in the Kawasaki and Yokohama areas.
Growth Strategy
The company is driving market share expansion amid the declining birthrate through two pillars: dominant-strategy expansion into the Kawasaki and eastern/southern Yokohama areas, and strengthening instructional capability.
Strategic focus on the Kawasaki City and eastern/southern Yokohama areas, where substantial room remains for new school openings. The Kawasaki School (the company's first location in Kawasaki Ward) opened in March 2026, and the Tomioka School (Kanazawa Ward, Yokohama City) is scheduled to open in July. Having achieved the No. 1 ranking among cram schools for two consecutive years in the number of students admitted to Tama High School, brand penetration in Kawasaki City is accelerating.
Leveraging the state of excess demand—where first-year high school students are at full capacity in 9 of the 15 high school division schools—the company relocated the university-entrance-prep Step Center Minami School (March 2026) and expanded the Hashimoto School (also March 2026). Rather than relying on new school openings, the company is building up student numbers and sales by expanding capacity at existing schools.
The company continues its policy of restraining new school expansion in favor of focusing on teacher development this period as well. Positioning the reinforcement of instructional capability as the top priority for continued growth amid an increasingly competitive environment driven by the declining birthrate, the company aims to further enhance teacher training to maintain and improve exam pass results and strengthen brand power.
The number of enrolled students reached a record high of 661 as of the end of March 2026, and the STEP Kids Fujisawa Station North Exit classroom became independent, expanding the network to a six-classroom structure. By 2027, the division is expected to cover students up through 4th grade. The company is accumulating, sharing, and standardizing operational know-how, building the foundation for future expansion across the prefecture.
Last updated: July 17, 2026