Medical Net FY2026 Full-Year Earnings Deep Dive Report

Medical Net achieved significant increases in both revenue and operating profit in its full-year results for the fiscal year ended May 2026. Operating profit, in particular, grew by 94.0% year-on-year, and profit attributable to owners of parent turned profitable. This outcome can be attributed to the withdrawal from unprofitable businesses and the successful execution of growth strategies in core segments.

FY2026 Full-Year Performance Highlights

For the full fiscal year ended May 2026, Medical Net reported revenue of 6,732 million yen (up 10.8% year-on-year) and operating profit of 191 million yen (up 94.0% year-on-year) . Profit attributable to owners of parent reached 137 million yen, a turnaround from a loss of △68 million yen in the previous fiscal year. Against the full-year forecast, revenue achieved 105.2% and profit attributable to owners of parent achieved 113.6%, both exceeding targets.

This slide concisely summarizes the financial results for the current period, presenting specific figures for revenue, operating profit, and profit attributable to owners of parent, along with year-on-year comparisons and the main contributing factors. The significant improvement in operating profit and the return to profitability for net income clearly demonstrate the success of the business restructuring efforts.

Analysis of Performance Fluctuations

The substantial increase in operating profit was primarily driven by the following factors:

1. Strong performance of the domestic dental commerce business : This core revenue stream significantly contributed to overall sales growth.
2. Cost reduction due to the deconsolidation of Milutel Co., Ltd. : The withdrawal from Milutel Co., Ltd., which operated the unprofitable disease prevention platform business and had recorded losses for two consecutive periods, eliminated its associated losses, significantly boosting overall profit.
3. Turnaround to profitability in the Medical BtoB business : A strategic shift towards higher-margin services proved successful, leading to profitability.

Regarding selling, general, and administrative (SG&A) expenses, while personnel costs increased due to human capital investments for growth, reductions in advertising and R&D expenses led to a 3% decrease in total SG&A expenses year-on-year . This suggests that the withdrawal from unprofitable businesses and efficient cost allocation played a role.

Segmental Performance

In terms of revenue , the Medical Institution Management Support business expanded significantly to 5,199 million yen (up 17.6% year-on-year) , driving overall revenue growth. Conversely, the Media Platform business saw a decrease to 974 million yen (down 10.0% year-on-year). The Medical BtoB business grew steadily to 181 million yen (up 14.8% year-on-year), and the Cloud Integration business also showed solid performance at 379 million yen (up 1.1% year-on-year).

On the profit front, the withdrawal from the disease prevention platform business significantly contributed to profit improvement . The elimination of this segment, which recorded a loss of △154 million yen in the previous year, improved overall profitability. Furthermore, the Medical BtoB business turned profitable at 42 million yen, from a loss of △13 million yen in the prior year. The Medical Institution Management Support business, including the dental commerce business, saw increased revenue but a decrease in profit to 122 million yen (down 35.7% year-on-year). This could be attributed to upfront investments for growth and the impact of the newly consolidated Yoshimi Dental Instrument Store.

This slide illustrates the segmental profit situation, clearly showing how the withdrawal from the disease prevention platform business and the Medical BtoB business's return to profitability significantly contributed to overall profit improvement. The clarity of each segment's profitability is crucial for understanding the direction of future business strategies.

Strategies and Initiatives by Key Segments

In the Medical Institution Management Support business , the domestic dental commerce segment is focusing on maximizing synergy by establishing four bases in Tokyo, Osaka, Miyazaki, and Kagoshima . It is also enhancing product strength through improved procurement prices and strengthening proprietary products, alongside promoting DX in management infrastructure by integrating DX systems and BI tools.

For overseas expansion, the Thai dental commerce business plans to conduct dental tours for Japanese dentists four times a year, anticipating an increase in clinic opening support cases. The goal is to increase the EC app's sales ratio from 20% to 50%, promoting DX in the Thai dental industry and expanding sales resources. Additionally, in the planning and wholesale of over-the-counter drugs and quasi-drugs, a new product, "O-lact MN," supporting oral health, has been launched for sale in pharmacies and drugstores.

In the Medical BtoB business , a consulting function for dental clinics has been added to "Dentwave Prime," with partial provision to existing customers. The focus remains on consulting and research projects for dental-related companies, shifting towards higher-margin services.

For the Media Platform business , efforts to enhance added value continue through major media system refreshes, partial renewals of three media platforms to improve user experience, and the introduction of AI content and expansion of various article content.

The Cloud Integration business is growing in both revenue and profit following its integration into the Medical Net Group. It is actively participating in conventions targeting foreign companies and strengthening sales efforts for large projects. In Thailand, the company is conducting demand surveys with local dentists and doctor communities to prepare for the launch of dental clinic system sales, aiming for subscription sales to 6,000 clinics across Thailand .

Future Growth Strategy and Investment Plan

Looking ahead to the fiscal year ending May 2027, Medical Net plans to continue making aggressive investments for growth . In terms of human capital, in addition to three mid-career hires, seven new graduates are planned for recruitment in FY2027. Business investments include portal site system refreshes, business expansion through M&A, further expansion of the Medical BtoB business, overseas expansion of the dental business, expansion of the dental dealer business, synergy in the pharmaceutical and quasi-drug sales business, joint research with universities, promotion of the cloud integration business, and internal infrastructure development.

These investments are planned to total 249 million yen, comprising 42 million yen for human resource acquisition, 131 million yen for promotion expenses, and 75 million yen for system investments . The emphasis on promotion and system investments indicates a commitment to strengthening the business foundation and fostering future growth drivers.

This slide quantifies the specific investment plan for future growth. The clear breakdown of funds allocated to human resource acquisition, promotion, and system investments provides crucial insight into the company's concrete future growth strategy and its commitment to execution . {{PAGE_30}}

Summary

Medical Net's full-year results for FY2026 demonstrated robust performance with significant profit growth and a return to profitability , driven by the withdrawal from unprofitable businesses and the successful execution of growth strategies in core segments. The expansion of the Medical Institution Management Support business and the profitability of the Medical BtoB business were key drivers. For FY2027, the company plans to continue aggressive human and business investments, aiming for sustained growth through strengthening existing businesses and fostering new ones. Reinforcing its domestic market foundation and accelerating overseas expansion, particularly in Thailand, will be key to future growth.