Koukandekirukun Q1 FY2027 Earnings Analysis: Significant Revenue and Profit Growth with Return to Operating Profitability; A Strong Start Toward Mid-Term Goals Driven by Group Synergies and DX

Koukandekirukun Inc.'s financial results for the first quarter of the fiscal year ending March 2027 (April 2026 – June 2026) demonstrated substantial growth in both revenue and profit . This performance was driven by robust demand in its core "Koukandekirukun (BtoC)" business, complemented by the synergistic contributions of group companies acquired through proactive M&A.

This report categorizes key topics from the disclosed financial materials into 10 sections, providing a detailed analysis of the earnings overview, contributing factors, segment progress, and mid-to-long-term growth scenarios.

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1. Consolidated Earnings Highlights: A Dramatic Turnaround from Last Year's Loss

In Q1 FY2027, consolidated results showed remarkable growth, with net sales reaching 3,753 million yen (+47.2% YoY) and gross profit hitting 810 million yen (+55.4% YoY) . Regarding profitability, the company achieved a dramatic turnaround from the operating loss recorded in the same period last year (△131 million yen), posting an operating profit of 121 million yen , ordinary profit of 119 million yen , and net profit of 65 million yen , marking a strong return to profitability across all profit stages.

Slide Commentary (Overview of Consolidated Results)

The income statement above (P.5) is the most critical slide illustrating the strength of this quarter. The 1,204 million yen increase in net sales (+47.2% YoY) is attributed to increased orders in the core housing equipment installation e-commerce business, alongside revenue contributions from newly integrated group companies. The gross profit margin also improved by 1.1 percentage points, rising from 20.5% to 21.6% , supported by effective cost management and increased sales prices.

2. Seasonality and Improvement in Quarterly Revenue Structure

The housing equipment replacement and renovation industry typically experiences seasonality, with performance skewed toward the third and fourth quarters due to concentrated demand from moving and year-end needs. Consequently, the first quarter has historically tended to show lower operating profit levels or losses. However, by securing an operating profit of 121 million yen in Q1 this fiscal year, the company has built a solid foundation for achieving its full-year targets.

3. Asset and Financial Position and Inventory Strategy

On the balance sheet, merchandise inventory within current assets increased to 623 million yen (+100 million yen from the end of the previous fiscal year) . This is a strategic risk hedge, intentionally prioritizing the securing of key housing equipment inventory in light of global supply chain uncertainties caused by escalating tensions in the Middle East . While cash and deposits decreased to 1,434 million yen (△127 million yen) due to corporate and consumption tax payments, the equity ratio rose to 37.4% (+1.5 pt improvement) , maintaining stable financial health.

4. Progress Scenario for the Mid-Term 3-Year Consolidated Business Plan

The company has set a mid-term management plan aiming for 20,000 million yen in net sales and 1,000 million yen in operating profit by the final year, FY2028 .

Slide Commentary (Mid-Term 3-Year Plan and Profit Scenario)

The conceptual diagram of the mid-term plan above (P.7) illustrates the company's intended mid-to-long-term growth trajectory. Although the previous fiscal year (FY2026/3) fell short of the operating profit target (176 million yen against a 200 million yen plan) due to M&A-related expenses, business sales progressed as planned. The current fiscal year (FY2027/3) targets 15,300 million yen in net sales and 450 million yen in operating profit , serving as a pivotal period to demonstrate the transition into a full-scale profit-generation phase through optimized branding investment and group synergies.

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5. Progress in Housing Equipment DX Business: Strong Growth in Core Operations

The core "Housing Equipment DX Business" achieved net sales of 3,278 million yen (+40.7% YoY) and an operating profit of 136 million yen (a significant turnaround from the △106 million yen loss in the same period last year) , marking a record high for quarterly sales.

【Trends by Constituent Company of the Housing Equipment DX Business】

1. Koukandekirukun (BtoC) : Net sales of 2,770 million yen (+31.4% YoY) and operating profit of 137 million yen (vs. △87 million yen last year) . In addition to steady order flow, the adjustment of timing for branding advertising expenses, such as TV commercials that were deployed in the same period last year, contributed to the significant profit increase.
2. KD Service (BtoB) : Net sales of 268 million yen (+18.6% YoY) and operating profit of 13 million yen (vs. △10 million yen last year) . Stability in the customer base, including condominium management companies, and thorough cost management have yielded results.
3. Kitchen Works (Water-related Renovation) : Newly consolidated, reporting net sales of 233 million yen and an operating profit of 0.2 million yen , primarily operating in the Sapporo area.

6. SG&A Expense Control and Improvement in Operating Profit Margin

A notable aspect of the quarterly profitability improvement is the efficient management of SG&A expenses .

Slide Commentary (Quarterly Trend of Operating Profit in Housing Equipment DX Business)

The slide above (P.18) shows the quarterly transition of operating profit for the Housing Equipment DX business. As a result of keeping SG&A expenses at 618 million yen , the same level as the previous year, despite sales growth, the SG&A expense ratio decreased significantly to 18.9% . The optimization of branding ad spend timing offset the increase in personnel costs associated with staff expansion, achieving very high profitability efficiency.

7. Expansion of Construction Volume and Unit Prices in Both BtoC and BtoB

Operational indicators (KPIs) also show favorable trends:

• BtoC (Koukandekirukun) Completed Construction Projects : 16,521 cases (+21.4% YoY) . Driven by external factors such as inflation, concerns over product shortages, and the "2027 Problem" for air conditioners, the average sales unit price has trended upward to 167,000 yen .
• BtoB (KD Service) Completed Construction Projects : 10,271 cases (+13.3% YoY) . The order base from condominium management companies has strengthened, and the construction execution system is being reinforced.

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8. Alliance Strategy: Major Business Partnership with Kyushu Electric Power

As a key measure for new customer acquisition and service expansion, a business partnership with Kyushu Electric Power Co., Inc. was announced (announced May–June 2026). As part of Kyushu Electric Power's new energy solution brand "Enebee," the housing equipment replacement e-commerce site "Enebee Store by Kyushu Electric Power" was launched. By providing and operating the "Replaform" platform developed by Koukandekirukun, the company expects to expand orders by leveraging the customer base of a major infrastructure firm.

9. Growth of the Solutions Business (IPS) and Engineering Foundation

The "Solutions Business (IPS Inc.)," which provides IT solutions outside the renovation and housing equipment sector, is also showing strong growth:

• Net Sales : 483 million yen (+85.8% YoY)
• Gross Profit : 65 million yen (+87.5% YoY)
• Number of Engineers : Rapid expansion from 62 in the previous year to 139 (including 30 from M&A and 46 immediate-hire professionals) . Although operating profit was △15 million yen due to upfront investment in organizational strengthening, the company is aggressively enhancing its development structure and shifting toward AI-readiness and quality-focused operations, laying the foundation for future system development contributions to the entire group and expansion of external sales.

10. Transition to a Holding Company Structure and Strengthening Group Governance

At the General Meeting of Shareholders on June 29, 2026, the incorporation-type company split plan for the transition to a holding company structure , amendments to the Articles of Incorporation, and the new board of directors structure were approved. The company plans to promote rapid decision-making and strengthened governance to adapt to the business structure as it continues to diversify and grow through group integration, including the name change to "Reform Technology Co., Ltd."

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Summary

The Q1 FY2027 financial results were a successful combination of revenue growth in the core BtoC business, optimization of advertising operations, stabilization of the BtoB business, and expansion of business scale through M&A and alliances . Recording a solid operating profit (121 million yen) in the seasonally slow first quarter is a steady step toward the current fiscal year's plan (450 million yen operating profit) and the mid-term goal (1,000 million yen operating profit). Future segment synergies will be a key point to watch.