Migaro Holdings: Q1 FY2027 Earnings Deep Dive Report

This deep-dive report summarizes the Q1 FY2027 financial results (announced on August 6, 2026) for Migaro Holdings Inc., covering performance trends, segment analysis, progress on business KPIs, financial structure, shareholder return policies, and mid-to-long-term growth strategies.

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1. Overview of Q1 FY2027 Consolidated Financial Results

In the first quarter, Migaro Holdings reported consolidated net sales of 14,840 million yen (+4.0% YoY) , marking a record high for a first quarter . Meanwhile, operating profit was 973 million yen (-0.2% YoY) , ordinary profit was 771 million yen (-1.2% YoY) , and profit attributable to owners of the parent was 537 million yen (+7.5% YoY) .

Sales growth was driven by both the high-growth "DX Promotion Business" and the "DX Real Estate Business," which benefits from a solid demand base. Regarding profitability, while there was an impact from increased fixed costs due to strengthening human resources for future expansion, the DX Promotion Business transitioned from an investment phase to a reliable monetization phase, contributing significantly to profits from the first quarter and maintaining overall operating profit at levels comparable to the previous year.

Slide Commentary (Slide: "Q1 FY2027 Earnings Highlights ②")

The slide above illustrates critical indicators for understanding the overall earnings picture. While sales grew by 4.0% YoY to reach a record high , operating profit remained largely flat (-0.2% YoY). This is underpinned by the significant expansion in sales of the DX Promotion Business shown in the graph on the right. Quarterly sales for the DX Promotion Business reached 1,169 million yen, continuing the rapid growth trend of the past few years. A notable structural change in these results is the establishment of profitability while simultaneously making upfront investments in fixed costs.

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2. In-depth Segment Analysis

The Group's business consists of two segments: the "DX Promotion Business" and the "DX Real Estate Business."

(1) DX Promotion Business: Significant Revenue Growth and Profitability Achieved in Q1

Sales in the DX Promotion Business were 1,169 million yen (+46.5% YoY) , and segment profit was 102 million yen (compared to an 83 million yen loss in the same period last year) , achieving substantial growth in both revenue and profit .

In addition to an increase in spot revenue from installations and recurring revenue (monthly fees, etc.) associated with the expansion of the facial recognition ID platform "FreeiD," the effects of new project acquisitions and aggressive M&A are becoming evident. Although the business was in an investment-heavy phase in previous years, it has evolved into a structure that generates clear operating profits as early as the first quarter, driven by increased sales scale and productivity improvements through AI-driven development.

Slide Commentary (Slide: "DX Promotion Business")

This slide visually confirms the structural transformation in the DX Promotion Business. The segment accounting figures on the left show a turnaround from an 83 million yen loss in the same period last year to a 102 million yen profit this term (+185 million yen improvement). Furthermore, the "Quarterly Sales Trend" on the right shows that sales reached 1,169 million yen in Q1 FY2027, following the progression from Q1 FY2025 (783 million yen) through FY2026 (798 million yen to 1,494 million yen), indicating that the base quarterly sales level is steadily rising, transcending seasonal fluctuations.

(2) DX Real Estate Business: Robust Demand Amid Rising Rents and Continued Investment

Sales in the DX Real Estate Business were 13,714 million yen (+1.5% YoY) , and segment profit was 1,206 million yen (-9.0% YoY) .

Reflecting the rise in apartment rents, particularly in urban centers, sales prices for new and used investment condominiums remain at high levels. The breakdown is as follows:

• Investment (New) : 5,359 million yen (154 units)
• Investment (Used) : 5,283 million yen (184 units)
• Residential (V-Clacia) : 1,064 million yen (27 units)
• Apartments (S-Clacia) : 594 million yen (2 buildings)
• Other : 1,412 million yen

Sales prices and gross margins for used investment properties remain high, and gross profit is on an upward trend. The primary reason for the slight year-on-year decline in segment profit is the increase in fixed costs associated with strengthening sales and development personnel in anticipation of long-term supply capacity expansion.

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3. Business KPI Trends and Expansion of Stock Base

Various KPIs indicating the expansion of the ecosystem (economic zone) that the Group is working on as a whole show steady growth.

1. Number of FreeiD-installed condominiums : 423 buildings (+195 YoY) Adoption of "all-facial-recognition" condominiums is accelerating, with the total number of partners, including major developers, reaching 111 companies.
2. Number of DX Real Estate members : 193,049 (+6,609 YoY) The customer base through the company's own platforms and services is expanding steadily.
3. Number of units under rental management : 7,483 (+791 YoY)
4. Number of units under building management : 6,240 (+467 YoY) The number of managed units, which forms the foundation of stock revenue, is accumulating solidly.
5. Number of DI (Digital Integration) projects in operation : 461 (+164 YoY) Orders for DX support for companies remain strong.
6. Number of IT personnel : 334 (out of 599 total group employees) With IT personnel accounting for more than half of the total, the company is promoting development efficiency and productivity per capita using AI-driven development.

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4. Financial Position (BS) and Capital Management

Total assets at the end of Q1 FY2027 were 57,235 million yen (-72 million yen from the end of the previous fiscal year) .

• Cash and deposits : 8,854 million yen (-1,114 million yen)
• Inventories : 44,178 million yen (+968 million yen)
• Interest-bearing debt : 37,027 million yen (+1,443 million yen)
• Net assets : 15,534 million yen (+177 million yen)

As a result of actively securing inventory for sale in line with intensified purchasing and development activities, interest-bearing debt increased slightly. However, the company maintains a capital adequacy ratio of 26.7% (benchmark: 25% or higher) and a net D/E ratio of 1.84x (benchmark: 2.0x or lower) , ensuring that financial soundness is well-controlled.

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5. Progress Against Full-Year Forecasts and Shareholder Returns

(1) Progress Against Earnings Forecasts

Migaro Holdings has not changed its full-year earnings forecast (Net sales: 65,000 million yen, Operating profit: 3,300 million yen, Ordinary profit: 2,450 million yen, Profit attributable to owners of the parent: 1,500 million yen). Progress rates for each profit stage at the end of the first quarter are tracking at a strong pace, exceeding the company's initial expectations.

Slide Commentary (Slide: "Q1 FY2027 Progress Against Earnings Forecasts")

This slide visually clarifies the progress of Q1 results against the full-year plan. While the Q1 progress rate for companies including real estate-related businesses is often around 20%, the company has reached 22.8% for net sales , 29.5% for operating profit , 31.5% for ordinary profit , and 35.8% for net profit . The higher-than-expected profit contribution from the DX Promotion Business is directly linked to these high profit progress rates.

(2) Shareholder Returns (Dividend Forecast)

Against the backdrop of solid earnings performance and future growth prospects, the annual dividend forecast for FY2027 is 9.0 yen per share (3.0 yen interim, 6.0 yen year-end) , an increase of 0.5 yen from the previous year's 8.5 yen. The planned dividend payout ratio is 38.6% , demonstrating a stance of strengthening shareholder returns in line with improved profitability.

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6. Future Growth Strategy and Mid-to-Long-Term Outlook

The Group is developing a unique ecosystem that fuses the real estate development and management know-how cultivated in the "DX Real Estate Business" with the cutting-edge facial recognition and AI technologies deployed in the "DX Promotion Business."

In particular, the facial recognition platform "FreeiD" provides a unique experience called "All-Facial-Recognition Condominiums," allowing residents to move from the entrance and elevators to delivery boxes and private unit doors without keys, earning a high resident satisfaction rating of 97%. Moving forward, the company plans to accelerate system integration with other platforms such as Mitsubishi Estate's "Machi Pass Face" and the Haseko Group's "LIM Cloud," expanding its use cases beyond residential areas to offices, nurseries, commercial facilities, and theme parks.

As for the revenue model, a structure is being built where "recurring models (stock revenue)" such as monthly fees and platform development contracts are layered on top of "spot revenue" at the time of installation, which is expected to serve as a pillar for improving the profit margin of the entire group in the future.