Wills Inc. FY2026 Q2 Earnings Analysis Report

This report provides a multi-faceted analysis of the FY2026 Q2 (period ending December 2026) financial results for Wills Inc. (Securities Code: 4482), covering performance highlights, service-specific trends, financial foundations, and the company's mid-to-long-term growth narrative.

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1. Top 10 Key Takeaways from the Earnings Report

The following 10 points summarize the key management indicators and strategic topics from this earnings report that are of particular importance to investors:

1. Double-Digit Growth in Both Revenue and Operating Profit : Revenue grew by 26.4% year-on-year to 3,060 million JPY , while operating profit rose by 27.4% to 670 million JPY , marking steady growth.
2. Accelerated Growth of Flagship "Premium Yutai Club" : Revenue reached 2,641 million JPY (up 35.9% YoY), serving as the primary driver of overall performance expansion.
3. Increase in Average Revenue Per User (ARPU) and Client Base : The number of companies adopting the Premium Yutai Club increased to 112 (up 2 from the end of the previous fiscal year), alongside a steady rise in transaction value per client.
4. Subsidiary Merger and Operational Efficiency : The company absorbed its wholly-owned subsidiary, NetMile, transitioning to non-consolidated reporting. This group reorganization balances management rationalization with human capital investment, such as base salary increases.
5. Strong Progress Against Full-Year Targets : Revenue progress reached 45.3% (109.1% of the Q2 plan), and operating profit progress reached 44.7% (107.8% of the Q2 plan), tracking ahead of initial projections.
6. Second-Half Weighted Performance Trend : The company maintains a structure where profits are heavily weighted toward the second half, partly due to the shift of integrated report production projects in the Sustainability Solutions segment.
7. Impairment Loss on Development Investment : An impairment loss of 152 million JPY on software assets was recorded, considering future usage prospects. However, this was already factored into the full-year earnings forecast, which remains unchanged.
8. Abundant Advances Received and Solid Financial Base : Contract liabilities (advances received) accumulated to 1,209 million JPY due to the expansion of the Premium Yutai Club, maintaining a cash ratio of over 57% .
9. Launch of New Product "IR-port" : The company launched an AI-powered automated integrated report generation service, targeting a SaaS model expansion for small-to-mid-sized listed companies.
10. Tailwinds from Capital Market Reforms : Structural demand for IR/SR (shareholder relations) is expanding due to the Tokyo Stock Exchange's request for PBR improvement, stricter listing maintenance criteria, and the establishment of the new NISA system.

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2. Detailed Analysis of Performance Trends and Profitability

Wills' performance has followed a long-term expansion trend, supported by the market penetration of its core shareholder management platform.

Slide Commentary: Importance of Performance Trends and Growth Speed

The slide above illustrates the Q2 trends in revenue, gross profit, and operating profit over the past six years. As highlighted by Wills, the average revenue growth rate over the last five years remains at a high level of 13.4% . Notably, the Q2 revenue of 3,060 million JPY is a record high, marking a significant jump from 2,421 million JPY in the same period last year. Gross profit reached 1,373 million JPY (up 12.8% YoY), and operating profit reached 670 million JPY (up 27.4% YoY). This confirms that revenue growth is driving gross profit, which, combined with fixed-cost efficiencies from the merger, has resulted in high profitability (Q2 operating margin of 21.9%) .

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3. Trends by Segment and Service

Wills' business is broadly divided into the "Shareholder Management Platform Business" and the "Advertising Business."

(1) Shareholder Management Platform Business

Revenue for this segment grew by 29.6% YoY to 2,970 million JPY , serving as the pillar of the company's performance.

• Premium Yutai Club : Revenue of 2,641 million JPY (up 35.9% YoY). Growth is driven by an increase in shareholder incentive points issued by existing clients and new adoptions by listed companies strengthening their shareholder return policies. The rise in ARPU is the primary factor for revenue growth.
• IR-navi : Revenue of 176 million JPY (down 0.8% YoY). This IR database service for institutional investors is currently awaiting a major system renewal, with the number of clients remaining flat at 367.
• Sustainability Solutions : Revenue of 111 million JPY (up 0.2% YoY). While integrated report production projects are becoming larger and more sophisticated, there is a growing trend for revenue recognition to shift to Q3 and Q4, depending on the disclosure schedules of client companies.

(2) Advertising Business

Revenue was 89 million JPY (down 33.0% YoY). The company is pursuing a strategy of selection and concentration regarding its web media and advertising agency business, reallocating resources to the growth-oriented Shareholder Management Platform Business.

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4. Q2 Progress and Second-Half Weighted Performance Model

Essential to evaluating the company's performance are its "seasonality (quarterly weighting)" and "progress pace against full-year plans."

Slide Commentary: Meaning of Progress Rates and Quarterly Performance Trends

The graph on the left shows the quarterly performance trend for the previous fiscal year (FY2025), while the graph on the right shows the progress rate as of Q2 against the FY2026 full-year plan. Wills' business model is structured such that revenue and profit are weighted toward the second half (Q3 and Q4) , as many companies issue incentive points following their March fiscal year-end and June general meetings, and integrated report deliveries are concentrated from autumn onwards. Looking at the FY2025 operating margin, it shows a characteristic increase toward the second half, rising from 11.5% in Q1 to 28.1% in Q2 and 25.3% in Q4. Given this second-half weighted structure, the Q2 progress rates of 45.3% for revenue (3,060 million JPY / 6,750 million JPY) and 44.7% for operating profit (670 million JPY / 1,500 million JPY) are at very healthy levels. Furthermore, the company exceeded its cumulative Q2 plan (2,804 million JPY in revenue, 621 million JPY in operating profit) with actual results of 109.1% and 107.8% respectively , demonstrating high certainty in achieving its full-year targets.

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5. Capital Market Reforms and External Tailwinds

Wills' suite of services directly captures the wave of structural changes occurring in the Japanese stock market.

Slide Commentary: Growth Opportunities from Capital Market Reforms

This slide systematizes the synergy between "capital market reforms," centered on the Tokyo Stock Exchange, and the solutions provided by Wills. Currently, listed companies are under strong pressure to address: (1) management focused on cost of capital and stock price to improve PBR below 1x , (2) compliance with listing maintenance criteria such as market capitalization of tradable shares , and (3) improvement of tradable share ratios in line with the new TOPIX review . Consequently, moving beyond conventional IR, it has become essential to cultivate a broad shareholder base including individual investors (Premium Yutai Club), strengthen institutional investor engagement (IR-navi), and ensure appropriate disclosure of ESG information (Sustainability Solutions). Wills' solutions are positioned to provide comprehensive support for the top priority of listed companies: "improving corporate value."

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6. Financial Condition, Cash Flow, and New Initiatives

Financial Soundness and Capital Capacity

• Asset Status : Total assets at the end of Q2 were 5,411 million JPY . "Cash and deposits" within current assets are high at 3,109 million JPY, with a cash ratio exceeding 57% .
• Accumulation of Contract Liabilities (Advances Received) : Contract liabilities in current liabilities increased to 1,209 million JPY . This signifies that funds for future revenue, such as point issuance for the Premium Yutai Club, have been received in advance, underpinning future revenue visibility and financial stability.
• Cash Flow : Cumulative Q2 operating cash flow secured a surplus of 372 million JPY . Investment cash flow was -1,147 million JPY due to deposits into time deposits (900 million JPY), but the company maintains a positive underlying free cash flow of 125 million JPY.

Evolution via AI Product "IR-port"

As a new initiative, the company has launched "IR-port," an AI-powered automated generation service to support the creation of integrated reports. By providing AI-assisted translation, manuscript generation, and design output at a low cost (starting from 7 million JPY), it addresses the massive workload and costs associated with report production. The company aims to tap into the market of small-to-mid-sized listed companies that previously could not afford such projects, with a view toward a future SaaS-based revenue model.

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7. Conclusion

In FY2026 Q2, Wills achieved double-digit growth in both revenue and operating profit year-on-year, primarily driven by the increase in ARPU and the expansion of the Premium Yutai Club.

Under favorable external conditions, such as TSE reforms and the establishment of the new NISA, the company is showing comfortable progress against its full-year plan, even when accounting for second-half seasonality. Furthermore, while pursuing management rationalization through group reorganization, the company continues to invest in new developments like the AI-powered "IR-port," unfolding a growth story backed by a solid financial foundation and high cash-generating capability.