eWeLL FY2026 Q2 Earnings Deep Dive: Deepening a High-Profit Stock Model Driven by AI and BPaaS

eWeLL, Inc. (Securities Code: 5038) achieved significant year-on-year growth in both revenue and operating profit for the second quarter of the fiscal year ending December 2026. This performance was driven by the expansion of the stable customer base for its flagship cloud SaaS for home nursing, "iBow," alongside increased adoption of AI-related services and BPaaS (Business Process as a Service).

This report extracts 10 key topics from the company's earnings disclosures, providing a detailed analysis of performance highlights, trends in growth-driving KPIs, shifts in the revenue structure, and the mid-to-long-term growth narrative.

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1. H1 Performance Highlights and Progress Against Full-Year Forecasts

For the first half of the fiscal year ending December 2026, the company reported revenue of 1,991 million yen (+24.2% YoY) and operating profit of 946 million yen (+20.1% YoY) . Disciplined business operations, with a focus on cost-effectiveness in SG&A expenses, proved successful, resulting in an operating profit that exceeded the initial H1 forecast of 911 million yen by 35 million yen .

The earnings summary slide above provides critical data symbolizing the company's solid business growth and high profitability. The operating profit margin stands at 47.5% , maintaining an exceptionally high level within the SaaS industry. Progress against the full-year plan is 46.6% for revenue (full-year target: 4,277 million yen) and 49.1% for operating profit (full-year target: 1,927 million yen). Considering that the monetization of major AI features (such as AI-optimized visit routing) will ramp up in the second half (starting July), the company is well-positioned to achieve its full-year targets .

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2. Disclosure of NRR: A New Metric for Per-Customer Growth

Starting this quarter, the company began disclosing its Cloud Service NRR (Net Retention Rate) to measure revenue growth from existing customers. The overall NRR is 108.0% , demonstrating a virtuous cycle where revenue expansion from upsells and cross-sells significantly outweighs revenue loss from churn.

This slide is a key graph showing that the company's customer base is not merely growing through new acquisitions, but possesses a structure where revenue automatically expands alongside the growth of existing customers (negative churn) . Analyzing by customer growth phase, corporate clients in the "expansion phase"—those operating multiple home nursing stations—saw their monthly revenue per client increase from 332,000 yen in June 2025 to 401,000 yen in June 2026 (120.7% YoY) . This highlights how post-implementation compliance strengthening and the adoption of additional AI features are directly boosting average revenue per user (ARPU).

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3. Revenue Trends by Service: The Dual Engine of Cloud and BPaaS

Looking at the revenue breakdown by segment, the core Cloud Service revenue grew to 1,706 million yen (+23.1% YoY) . This was supported by basic iBow subscription fees, the expansion of paid AI-based nursing plan and reporting features, and the continued high utilization of the "iBow e-Campus" statutory training service for home nursing (reaching record levels) .

Meanwhile, BPaaS revenue , which handles medical billing and administrative management, reached 277 million yen (+37.2% YoY) , showing a higher growth rate than the cloud segment. The company is successfully capturing back-office outsourcing demand from home nursing stations struggling with labor shortages, establishing this as a high-growth stock-based business.

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4. Key KPI Analysis: Number of Contracted Stations, ARPU, and Churn Rate

The fundamental KPIs measuring the company's growth velocity remain robust:

• Number of Contracted Stations : Expanded to 3,736 (+13.7% YoY) , with 3,583 stations currently in operation. Growth was driven by switches from competitor systems following medical fee revisions and the acquisition of large-scale corporate clients.
• Monthly ARPU : Increased to 90.9 thousand yen (+5.2% YoY) , accelerated by higher adoption rates of iBow billing, BPaaS, and AI services.
• Revenue Churn Rate : Maintained at an impressively low 0.20% , reflecting high customer engagement and strong switching costs within the industry.

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5. Analysis of Operating Profit Drivers and Cost Structure

The 158 million yen increase in operating profit compared to the same period last year is the result of an ideal scenario where the increase in gross profit from revenue growth successfully absorbed rising costs.

The slide above objectively illustrates the company's profit generation process and disciplined investment stance. The primary drivers of profit growth were the increase in gross profit from cloud services ( +197 million yen ) and BPaaS/other services ( +47 million yen ). While actively investing in the future—including increased personnel costs due to business expansion ( -48 million yen : 8 new hires in sales/corporate, 2% base pay increase), lead acquisition costs focused on web advertising ( -7 million yen ), and system usage/recruitment/training expenses ( -27 million yen )—the company has continued to grow without sacrificing its high operating profit margin (47.5%) .

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6. AI Technology Penetration and Quantitative Effects on Visit Frequency

The company is promoting customer revenue improvement (DX) through AI , going beyond simple operational efficiency. According to the data, users utilizing iBow's AI features saw an average 5.7pt higher increase in annual visit frequency compared to non-users. Currently, 12.9% (23,670 individuals) of home nursing professionals nationwide utilize iBow's AI, establishing the platform as essential infrastructure in the medical field.

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7. New Product Deployment: "AI Visit Routing" and "Management Scoring"

The following initiatives are underway to drive further growth in the second half and beyond:

1. AI Visit Routing : Full-scale monetization began in July 2026 (expected at 15,000 yen/month). It has already secured 273 contracts (with 246 already monetized) , marking a start that exceeds expectations.
2. AI Home Nursing Scoring (Tentative) : Currently under development with a target for launch and monetization within 2026. This feature will automatically analyze management metrics for home nursing stations and provide improvement suggestions (AI insights) based on data from over 3,500 stations, representing a promising new revenue stream.

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8. Long-term Tailwinds in the Home Nursing Market

As of April 2026, the number of home nursing stations nationwide reached 20,051 , surpassing the 20,000 mark for the first time. A net increase of over 1,000 stations per year has continued for six consecutive years (CAGR 8.6%) , supported by national policy (Community-based Integrated Care System) aimed at the peak of the aging population in 2040. The company's national market share (penetration rate) has reached 18.6% , laying the foundation to reach a 20% share by the end of December 2026.

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9. Financial Position and Shareholder Return Policy

The balance sheet summary shows total assets of 4,345 million yen and an equity ratio of 81.4% (+2.6pt from the previous fiscal year-end) , boasting an extremely sound financial structure. Cash and deposits stand at 2,811 million yen. In the first half, in addition to dividend payments, the company executed approximately 300 million yen in share buybacks , demonstrating a commitment to enhancing corporate value through flexible shareholder returns while prioritizing growth investments.

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10. Mid-term Management Plan (3-Year) Targets and Growth Scenario

Under its three-year mid-term management plan, the company aims for high-paced growth with a revenue CAGR of +21.9% through data-driven service development and increased ARPU. Specific targets include growing from 4,277 million yen in revenue and 1,927 million yen in operating profit in FY2026 to 6,149 million yen in revenue and 2,785 million yen in operating profit by FY2028 . During this period, the company expects to maintain a high operating profit margin of around 45% , outlining a clear growth roadmap that balances scale expansion with high profitability.