SYLA Holdings (8887) FY2026 May Full-Year Financial Results Deep Dive Report

SYLA Holdings achieved strong financial results for the full year ended May 2026, significantly exceeding both initial and revised forecasts across revenue and all profit stages . The Comprehensive Real Estate business and Property Management business primarily drove performance, with the Renewable Energy business also showing steady growth.

1. FY2026 May Full-Year Financial Highlights and Detailed Consolidated Income Statement

For the full year ended May 2026, consolidated results showed net sales of 39,331 million yen (up 625.8% year-on-year), operating profit of 3,186 million yen (up 1,486.2% year-on-year), ordinary profit of 2,067 million yen (up 827.4% year-on-year), and profit attributable to owners of parent of 6,684 million yen (up 7,342 million yen year-on-year) . These figures surpassed the revised forecasts announced on May 20, 2026, with achievement rates of 100.9% for net sales, 104.5% for operating profit, 103.4% for ordinary profit, and 102.6% for profit attributable to owners of parent, exceeding targets in all categories.

Notably, the operating profit margin was 8.1% (up 4.4 percentage points year-on-year), the ordinary profit margin was 5.3% (up 1.1 percentage points year-on-year), and the net profit margin was 17.0% , indicating significant improvements in profitability. This strong performance is attributed to the solid progress in each business segment, as highlighted by the supply of 377 new properties, management of 113 buildings, and management of 4,121 rental units.

The slide below illustrates the consolidated income statement, showing actual results versus plans, providing a concrete view of the company's revenue growth momentum.

From this income statement, it is clear that net sales increased more than sixfold year-on-year, and operating profit surged nearly fifteenfold . This was primarily due to the smooth handover of properties in the Comprehensive Real Estate business and the expansion of the revenue base in the Property Management business. The fact that the company exceeded its upwardly revised forecasts during the fiscal year suggests that business activities progressed even more favorably than initially anticipated.

2. Balance Sheet Expansion and Trends in Key Financial Indicators

Due to business integration, the balance sheet expanded significantly. Total assets increased to 70,482 million yen (up 320.8% year-on-year) , with inventories notably rising to 36,445 million yen (up 920.3% year-on-year), reflecting aggressive project sourcing. Liabilities also increased to 51,651 million yen (up 809.0% year-on-year), with interest-bearing debt reaching 44,983 million yen (up 1,189.3% year-on-year), primarily due to active borrowing of project funds from financial institutions. Net assets increased to 18,831 million yen (up 70.2% year-on-year).

Key financial indicators showed ROE at 37.2% (up 2.0 percentage points quarter-on-quarter), ROA at 9.5% (down 0.3 percentage points quarter-on-quarter), and ROIC at 3.7% (up 0.8 percentage points quarter-on-quarter) . The net D/E ratio was 1.8x (up 0.1x quarter-on-quarter), reflecting active investment. The dividend yield was 3.5%.

3. Factors Behind Changes in Operating and Ordinary Profit and Segment Performance

Operating profit saw a significant contribution from the Comprehensive Real Estate and Property Management businesses , leading to a 15.8-fold increase year-on-year. Ordinary profit also grew 9.2-fold year-on-year, despite an increase in financial expenses due to smooth project sourcing and expanded borrowing from financial institutions.

By segment, the Comprehensive Real Estate business accounted for the majority of consolidated results, with net sales of 34,374 million yen and profit of 5,593 million yen . The Property Management business recorded stable earnings with net sales of 2,843 million yen and profit of 894 million yen. The Construction business had net sales of 236 million yen and a loss of 603 million yen, driven by the completion of in-house construction projects and orders for construction contracts from external developers. The Renewable Energy business steadily grew with net sales of 1,712 million yen and profit of 39 million yen.

4. Comprehensive Real Estate Business KPIs and Project Sourcing

In the Comprehensive Real Estate business, the fourth quarter saw the sale of new properties such as SYFORME KAWASAKI-IKEDA and two land sales , exceeding the initial sales plan by approximately 4 billion yen. Furthermore, six new projects were sourced in the fourth quarter , demonstrating continued agile sourcing with an emphasis on profitability. The average period from land acquisition to completion for past projects was approximately 1 year and 8 months, with a gross profit margin of about 18%.

The slide below illustrates the project sourcing status in the Comprehensive Real Estate business, showing steady progress in building a pipeline for future sales.

This KPI summary visually demonstrates the active project sourcing, which is a key growth engine for the Comprehensive Real Estate business . The trend of increasing sourcing projects quarter-on-quarter indicates that the company is seizing market opportunities and actively securing future revenue streams. In particular, focusing on sourcing in high-demand areas such as central Tokyo and Kanagawa Prefecture enhances expectations for business stability and profitability.

5. Property Management Business KPIs and Recurring Revenue

In the Property Management business, the number of managed buildings increased to 113 (up 3.7% quarter-on-quarter), and the number of managed rental units increased to 4,121 (up 1.4% quarter-on-quarter) . The rent increase rate upon contract renewal was 7.70% (up 0.9 percentage points quarter-on-quarter), indicating smooth rent increases against a backdrop of imbalanced supply and demand. This has led to an expansion of recurring revenue (MRR: 183 million yen, ARR: 2,196 million yen) , with rental income from long-term owned properties serving as a crucial management foundation supporting the company's growth. From the second quarter of FY2027 May, the recurring revenue base is expected to further expand with the entry into the battery storage business.

The slide below shows the trends in key KPIs for the Property Management business, supporting the growth of a stable revenue base.

This slide demonstrates that the Property Management business is steadily expanding its scale and building a stable revenue stream . The continuous increase in the number of managed buildings and rental units directly leads to higher management fee income. Furthermore, the high rent increase rate of 7.70% upon contract renewal reflects the competitiveness of the company's managed properties and favorable market supply-demand conditions, making it a critical factor contributing to improved profitability .

6. Progress and Strategy in Renewable Energy Business

In the Renewable Energy business, sales have been accumulated through power generation and maintenance management, and the company is progressing with its entry into the grid-connected battery storage business . Specifically, there has been a strategic shift from selling to holding battery storage facilities , which is expected to contribute to the expansion of recurring revenue. Grid-connected battery storage plays a role in absorbing fluctuations in renewable energy output and maintaining the balance of electricity supply and demand by storing and discharging electricity as needed. This business is supported by tailwinds from external factors such as GX policies, decarbonization targets, and increased demand from AI and data centers, making it a sector with promising long-term growth potential.

7. FY2027 May Earnings Forecast

The earnings forecast for FY2027 May was disclosed as a range, considering the potential impact of the Hormuz Strait crisis on properties to be completed in the second half . The company anticipates net sales of 38,000 million yen to 40,000 million yen (down 3.4% to up 1.7% year-on-year), operating profit of 3,700 million yen to 3,900 million yen (up 16.1% to up 22.4% year-on-year), and ordinary profit of 2,375 million yen to 2,500 million yen (up 14.9% to up 20.9% year-on-year). An operating profit margin of 9.7% to 9.8% (up 1.6 to 1.7 percentage points year-on-year) indicates a continued focus on improving profitability.

Summary

SYLA Holdings achieved strong financial results in FY2026 May, significantly exceeding plans, primarily driven by its Comprehensive Real Estate and Property Management businesses . Aggressive project sourcing, an increase in managed properties, and rent increases fueled revenue growth. Furthermore, the entry into the Renewable Energy business, particularly grid-connected battery storage, is positioned as a critical strategic turning point for new revenue streams and the expansion of recurring revenue . For FY2027 May, the company aims for continued profit growth and improved profitability, while taking into account external environmental risks. These initiatives are expected to contribute to strengthening the company's sustainable growth foundation.