Nihon Joho Create FY2026 Earnings Deep Dive: Scaling Recurring Revenue Post-Investment and Growth Strategies in the AI Era

The fiscal year 2026 earnings for Nihon Joho Create (Ticker: 4054) , a provider of real estate IT platforms, showed continued year-on-year revenue growth. However, profitability fell short of targets due to the lingering impact of integration delays from the previous fiscal year and upfront investments in new product development. Nevertheless, the company maintains a recurring revenue ratio of 79% and demonstrates exceptional customer stickiness with an average monthly churn rate of 0.5% , with the fourth quarter showing a significant V-shaped recovery in both revenue and profit.

This report provides a detailed analysis of the earnings highlights, quarterly trends, key KPIs, product strategies, future outlook, and shareholder return policies based on 10 critical topics.

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1. Full-Year Earnings Summary: Steady Revenue Growth, but Profit Missed Targets Due to Upfront Investments and Past Factors

For the fiscal year ended June 2026, consolidated results were: Revenue of 5,472 million JPY (+7.8% YoY) , Operating Profit of 867 million JPY (-13.6% YoY) , Ordinary Profit of 942 million JPY (-6.1% YoY) , and Net Income Attributable to Owners of the Parent of 578 million JPY (-7.9% YoY) .

The summary page above highlights both the "expansion" of the business and "temporary pressure factors." While revenue reached a record high of 5,472 million JPY , it achieved 94.4% of the initial full-year target (5,800 million JPY). This was primarily due to the delayed business expansion speed resulting from the integration postponement of "Reapro BB" in the previous fiscal year.

Regarding profit and loss, costs were driven up by organizational strengthening, including increased headcount, and the amortization of intangible assets associated with the release of the flagship product, "Chintai Kakumei 11." Although operating profit reached 72.3% of the full-year target (1,200 million JPY), the company maintained an operating margin of 15.8% , demonstrating the underlying strength of the business to sustain double-digit margins even during an investment phase.

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2. Quarterly Trend Analysis: Signs of a V-Shaped Recovery in Q4

Despite the full-year profit decline, a detailed look at quarterly trends reveals a strong recovery toward the end of the fiscal year.

This slide presents critical data on quarterly performance over the past three years. While revenue and profit growth were sluggish from Q1 to Q3, the Q4 standalone performance showed a sharp recovery: Revenue of 1,654 million JPY (+21.6% YoY) and Operating Profit of 434 million JPY (+56.4% YoY).

The Q4 operating margin reached 26.3% , a 5.9 percentage point increase from 20.4% in the same period last year. Both brokerage and management solutions reached record-high quarterly revenue levels, indicating that the launch of new products and the expansion of the customer base began to contribute significantly to the figures starting in Q4.

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3. Recurring Revenue Foundation: Rising MRR and 79% Recurring Revenue Ratio

The greatest strength of the company's business model lies in its stable recurring revenue.

This slide illustrates the trends in recurring vs. initial revenue (left) and the trend in MRR (Monthly Recurring Revenue) (right). Full-year recurring revenue for FY2026 reached 4,324 million JPY (+8.2% YoY) , accounting for 79% of total revenue .

Furthermore, MRR, a leading indicator of recurring revenue, continued its upward trajectory, reaching 369,239 thousand JPY (+11.5% YoY) at the end of Q4 FY2026. A breakdown shows that management solution MRR grew strongly by 198,553 thousand JPY (+16.6% YoY) , proving the success of cross-selling and up-selling initiatives to existing customers.

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4. Customer Stickiness and Churn Rate: Industry-Leading "Low Churn Rate of 0.5%"

In terms of churn rate, one of the most important indicators of SaaS business health, the company maintains an excellent track record. The average monthly churn rate for FY2026 was 0.5% (also 0.5% in Q4 alone), remaining at the same low level as the previous fiscal year (0.4%).

Extensive operational support provided by a sales and customer success structure spanning 28 locations nationwide serves as a powerful barrier to entry, preventing customer attrition. Additionally, the number of employees has increased to 348 (up 33 from 315 at the end of the previous fiscal year) , steadily strengthening the organizational foundation for future growth.

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5. Expanding Customer Base: Growth of Free and Paid Users via Freemium Model

The company's growth mechanism is based on a freemium structure that acquires a vast customer base through free services and converts them to paid management and contract systems.

• Number of B2B property distribution service customers (Free "Reapro BB," etc.) : Increased by 10,513 companies this fiscal year, reaching a cumulative total of 67,230 companies .
• Number of monthly paid service customers : Increased by 283 companies this fiscal year, reaching a cumulative total of 7,073 companies .

This overwhelming base of free users (over 67,000 companies) represents the company's potential up-sell target (TAM/SAM) and serves as a solid foundation for future conversion to paid customers.

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6. Penetration of Real Estate DX: Adoption of Electronic Applications and Contracts

Capitalizing on legal reforms and the digital transformation (DX) of the real estate industry, the company's online contract products continue to grow.

• Number of offices adopting electronic application services : Cumulative 3,958 offices (steady increase from 3,381 at the end of the previous fiscal year).
• Number of offices adopting electronic contract services : Cumulative 773 offices (growing steadily since the amendment of the Real Estate Brokerage Act).

In a real estate industry where paper and fax were once the norm, these online-only services are at the core of operational efficiency, contributing to higher average revenue per user (ARPU) through integration with the "Chintai Kakumei" rental management system.

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7. New Product Launches: "Chintai Kakumei 11," "AI Kamigakari," and "Reapro BB+"

From FY2026 to FY2027, the company is executing a continuous rollout of major product renewals and new offerings.

1. Release of "Chintai Kakumei 11" (August 1, 2025) : The first major version upgrade in eight years. Dramatically improves operability by standardizing automated workflow functions and refreshing the UI/UX.
2. Launch of "AI Kamigakari" (Pre-release August 2026 / Official release September 2026) : An AI-OCR, storage, and Chintai Kakumei integration solution. It completes automatic analysis, classification, and storage simply by uploading PDF documents, significantly reducing manual data entry.
3. Release of "Reapro BB+" (Scheduled for September 1, 2026) : An evolved version of the B2B property distribution service. It strengthens the secondary use of other companies' property advertisements and portal site integration, aiming to expand market share in the brokerage sector.

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8. Strengthening Alliances and External Integration of Proprietary Data Asset "CRIX"

The company is actively promoting seamless system integration with third-party services (WealthPark, Moneytree LINK, lifeline procedure integration, etc.) to enhance its platform utility.

Also noteworthy is the utilization of "CRIX," the vast rental management big data held by the company. Data provision has begun for the "Rental Management Map" on "Rakumachi," one of Japan's largest real estate investment platforms. By providing rent trends and market analysis closer to reality rather than estimates, the company is accelerating efforts to monetize and brand its unique data assets.

Furthermore, as an advanced initiative, the company has begun trial provision of a local MCP server for "Chintai Kakumei 11." This allows AI tools like Claude Desktop to safely reference and analyze database information using natural language, presenting a new vision for real estate management in the AI era.

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9. FY2027 Earnings Forecast: A Period of Continued Upfront Investment Aiming for 6 Billion JPY in Revenue

For the FY2027 earnings forecast, the company announced Revenue of 6,000 million JPY (+9.6% YoY) , Operating Profit of 600 million JPY (-30.8% YoY) , and EBITDA of 1,230 million JPY (-5.9% YoY) .

While revenue is expected to reach the 6 billion JPY milestone with near double-digit growth, operating profit is expected to decline. This is due to the full-scale impact of amortization of intangible assets associated with new service releases like "Reapro BB+," as well as aggressive business expansion investments (development costs and personnel expenses) under the new management structure. However, the company plans to maintain a high level of 1.23 billion JPY in EBITDA, which indicates cash-generating power.

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10. Change in Shareholder Return Policy: Introduction of Interim Dividends and Dividend Increase to 13 JPY

While prioritizing upfront investments for business expansion, the company has clearly demonstrated its commitment to enhancing shareholder returns.

Starting in FY2027, the company will introduce an interim dividend system , planning an annual dividend of 13 JPY (6 JPY interim, 7 JPY year-end), which is a 1 JPY increase from the 12 JPY annual dividend in FY2026. Backed by cash flow generated from stable recurring revenue, the company has established a clear policy of balancing growth investment with shareholder returns.

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Conclusion

In FY2026, Nihon Joho Create experienced a temporary dip in profit due to the impact of past project delays and amortization burdens from new product development. However, the business fundamentals remain extremely robust, as evidenced by the V-shaped recovery in Q4, a recurring revenue ratio reaching 79% , a low churn rate of 0.5% , and a free customer base exceeding 67,000 companies .

Although FY2027 will see upfront amortization costs for new products, the key to mid-to-long-term growth will be how effectively the company can increase ARPU and capture brokerage market share through the penetration of high-value-added AI-powered solutions such as "Chintai Kakumei 11" and "AI Kamigakari."